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Unformatted text preview: les-based decisions in banking – Cost reduction
The largest savings in cost come from the ability to automate operational decision-making rather than have to
rely on personnel to make the right decisions based on a selection of inputs from other employees,
documentation and personal experience. The cost of change is reduced also, because the decision-making
procedures embedded in the rules and events can be changed more quickly and easily, with no need to alter
applications. However the examples focus more on the benefits from automation.
A number of consumer-based banking services can be automated and offered on a self-service basis to
customers through internet banking. For example, most internet banking services offer the ability to open an
account, request a quote for a loan and even ask for an insurance quote for a car or other purchase. By putting
all the required decision-making into rules, these services can be offered without requiring bank personnel to be
involved, with the risk being mitigated by the personalization aspects of the rules. A customer requesting a
quote for a loan who has a bad record at the bank for making payments on time might be charged a higher
rate, for instance.
Payment authorization is another area where savings can be made. Instead of bank personnel needing to be
employed to authorize payments in order to manage risk and liquidity appropriately, these decisions can be
turned into algorithmic rules that can take payment authorization decisions automatically. Not only does this
reduce costs, but it ensures repeatable and accurate decisions. Similarly, the settlement step can also be
automated with rules to handle the complexities introduced by multi-currency, multi-bank, multi-country
These are simple examples, but there is little point in producing any more, since automating decision-making
will reduce costs across just about any banking operation, freeing staff up from mechanical but time-consuming
activities to deliver value in more pro...
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This note was uploaded on 01/29/2014 for the course ACC 230 taught by Professor Xia during the Winter '13 term at Bloomsburg.
- Winter '13