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  • Writer's pictureRoy Urrico

SMA Provides ‘State of Automation in Financial Services’

By Roy Urrico

Finopotamus aims to highlight white papers, surveys, analyses and reports that provide a glimpse as to what is taking place and/or impacting credit unions and other organizations in the financial services industry.

Though financial services organizations (FSOs) are not historically known as early technology implementers, they are adopting the latest automation solutions, according to SMA Technologies’ State of Automation in Financial Services Report. All financial institutions and insurance companies surveyed by SMA revealed they employed automation in their operations in 2023.

Todd Dauchy, CEO, SMA Technologies.

“The State of Automation Report displays widespread adoption rates and significant investments in further automation, underscoring its crucial role in driving strategic objectives for financial services executives – including enhanced customer experience, revenue growth, and more time for higher-level initiatives,” Todd Dauchy, CEO of SMA Technologies told Finopotamus. “However, there is a disconnect between desired outcomes and current deployment strategies. As financial services leaders prioritize digital transformation, end-to-end automation emerges as increasingly indispensable."

For the study, Houston-based SMA Technologies, which develops automation platforms for credit unions, banks, insurance companies and other FSOs, collaborated with research and advisory firm Ted Goldwyn Communications, LLC, to survey 580 U.S.-based credit union, banking, and insurance executives. 

Ryan Dimick, chief product officer, SMA Technologies.

“One hundred percent of financial institutions are adopting automation. However, there is a significant disparity in how automation is used across organizations, with pronounced misalignment between current and desired levels of automation,” Ryan Dimick, chief product officer, SMA Technologies explained to Finopotamus. “While satisfaction rates are generally high, the lowest satisfaction is seen with integrated platform as a service (iPaaS) solution, possibly due to their novelty or a lack of tailored solutions for financial services. Despite this, the substantial investment in iPaaS conveys its increasing significance in driving digital transformation initiatives.”

Key Insights and Takeaways

Key insights from the report include:

  • Adoption rates and future trends: A significant majority of respondents have already integrated some form of automation, with many planning substantial investments in the near future. This trend underlines the growing recognition of automation as critical in driving strategic objectives like better customer service and revenue growth.

  • Impact on efficiency and productivity: The report details how automation technologies are streamlining processes, reducing manual errors, and enhancing operational efficiencies— resulting in substantial cost savings and return on investment (ROI).

  • Enhancing the customer and employee experience: Automation is also playing a key role in improving customer engagement and satisfaction. From personalized services to faster response times, automation is reshaping the customer experience in finance, while enabling staff and management to get time back to focus on higher-level, more strategic initiatives.

Other top takeaways:

  • On a scale of 1 out of 10, financial services organizations are largely happy with their current level of automation at 7.5; and automation’s importance to the organization’s future success ranked at 8.5.

  • Workload automation is the top-used automation technology in financial services, with  56% of respondents indicating they use it in their operations currently.

  • The median percentage of operations automated is between 41-50%. But, the median desired level of automation is between 61-70%. This 20-point gap reflects a strong desire to implement comprehensive, end-to-end automation

  • More than half (52%) of respondents save at least $100,000 from automation each year. FSOs plan to increase their use of business process automation (BPA), intelligent process automation (IPA), IT process automation (ITPA), and workload automation (WLA) more than other automation types in the next year

iPaaS: Too New or Lack of Financial Application?

Though respondents were generally satisfied with all the automation types currently in use, they reserved their lowest level of satisfaction for iPaaS, which SMA defines as “an event-driven form of automation for workflows across dissimilar systems.”

The study suggested this may be due to the iPaaS’s relative newness, or it may highlight a lack of iPaaS solutions purpose-built for financial services.

Despite lower rates of satisfaction, iPaaS spending highlights the growing importance of this technology in digital transformation initiatives—among the 38% of respondents who reported using iPaaS, 58% spent over $50,000 on this type of technology.

FSOs Almost on the Same Automation Page

Insurance companies, banks, and credit unions mostly reported the same automation usage, goals, results, and priorities. However, there were a few key areas where nuances between insurance companies and financial institutions became apparent.

Among insurance respondents, overall satisfaction with automation was meaningfully lower than for credit unions and banks. Insurers rated their satisfaction at 7.23 on a scale of 1 to 10, compared with 7.71 for financial institutions.

Insurance respondents indicated a lower level of confidence than financial institutions, reporting that they largely felt they were on par with their peers, with the median response (36% of respondents) stating “about the same,” as compared with 43% claiming to be slightly or far ahead, and 21% stating they were slightly or far behind.

For comparison, 53% of banks and credit unions felt they were slightly or far ahead of their peers, while 30% felt they were about the same. Only 17% reported feeling slightly or far behind.

Automation Spending

Credit unions, banks, and insurance companies have not shied away from investing their technology dollars in automation solutions. Ninety-one percent of respondents across the three sectors spent at least $100,000 on automation in the past 12 months. And 55% spent more than $250,000. Nearly 2 in 10 (18%) spent $500,000 or more. Notably, automation leaders—organizations that reported over 80% of their operations were automated—spent even more.

Seventy-nine percent of leaders spent $250,000 or more in the past year. On the other end of the spectrum, just 44% of slow adopters—organizations that reported less than 40% of their operations were automated—spent $250,000 or more.

The survey revealed FSOs are dedicating the largest amount to emerging technologies. This fact, coupled with many organizations’ ongoing investments in aging tools like basic job schedulers, suggests that financial services leaders may not be ready to abandon the status quo entirely, but they are looking to get more out of their automation solutions as they target an increasingly strategic set of goals.

Cost Savings

Respondents to the State of Automation in Financial Services survey reported benefitting from large cost savings due to automation: 52% of respondents save at least $100,000 per year; and 19% save $250,000 or more each year.

Among financial institutions (i.e., credit unions and banks) that hold $1 billion in assets or greater: 76% saved at least $100,000 per year from automation; and 35% saved at least $250,000


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