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Jun 10, 2024

Charting a profitable future: Process mining in finance

Sanjana Yarram

Charting a profitable future: Process mining in finance

In today’s digital age, where clients expect superior customer experiences and continuous innovation in products and services, it is critical for banks and financial service institutions to stay on top of their game. And yet there is always room for improvement. Consider this: A McKinsey study revealed that consumers in the United States have to wait at least a month to get approval for a mortgage1. Another study discovered that the average onboarding process for a bank’s new corporate client can take up to 100 days.While many rely on sophisticated technology to streamline and optimize their operations, there are new ways in which they can use tech to further transform their processes, to achieve the desired level of excellence. Process mining is one such technique being employed by banks and other financial institutions as part of their transformation journey.Process mining is a data-driven analytical approach that visualizes and analyzes the actual processes within an organization.

It extracts and examines data from various sources such as logs and databases to gain insights into how processes are executed. It therefore uncovers bottlenecks and inefficiencies in workflows, allowing organizations to take the steps needed to deliver better customer outcomes, optimize costs, and differentiate themselves from their peers. Process mining enables:

Automatic discovery of processes by analyzing event logs

Detailed examination of operational processes, process patterns, and case journeys to identify and implement process improvements

Monitoring real-time activities by analyzing digital footprints

Comparison of actual processes with existing reference models to identify deviations, irregularities, and process issues

Use of mechanisms to run and test automation scenarios

How can process mining drive excellence in financial services?

Through process mining, institutions providing financial services are able to visualize and therefore better understand and compare processes and systems against established best practices. They can then take steps to optimize operations, enabling quicker decision-making and improved productivity.Process mining can be used in systems where data flows between teams, customers, and third parties. It can be used to improve processes across a wide range of applications, such as

Loan & Mortgage Processes

Loan and mortgage processes are complex. Process mining analyzes the end-to-end loan and mortgage process, from application submission to approval and disbursement, and helps discover repetitive tasks and rework. It also helps identify the root cause of process delays and uncovers variations and bottlenecks in the processes. Process mining also allows the simulation of proposed changes and recommendations that can lead to process enhancement.

Fraud Management

Financial institutions can monitor external transactions and internal processes using conformance checking, which is an integral part of process mining. They can check process compliance by comparing event logs for a process with the existing reference model.The financial services sector can use it to detect points that require a compliance response and deploy solutions to mitigate them. They can also collate data on how existing processes work in real time, variability in cases, transaction velocity, etc., that can facilitate the discovery of suspicious behavior and fraudulent transactions. With this information, banks can take preventive measures, install anti-money laundering (AML) checks, and have an audit trail for investigations.

Account management and transaction processing

Process mining enables new customers (corporate and retail) to open an account and subscribe to products or buy products in just minutes with automated KYC checking and digitized workflows. Lending specialists, investment firms, etc., can leverage process mining and process AI to streamline document and business workflows.

Customer Service

Financial firms can deploy process mining to find patterns in customer service data to determine overall customer service performance. By analyzing customer data and event logs, banks and other financial institutions can gain insights into customer behavior and preferences. This information can be utilized to offer 1:1 personalized customer experiences by providing offers relevant to them and tailored to their preferences and needs.

Want to take your business to the next level?

Process mining is critical for the banking and financial sector to increase efficiency, compliance, and transparency, and reduce costs.

At Areteans, we specialize in providing process mining and process AI solutions. We leverage our domain experience and expertise in cutting-edge technologies such as AI, ML, and big data to transform your workflows and drive continuous optimization.

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