How to Make Banking and Financial Operations Efficient (with Automation)

Luke Walker
March 2, 2023
March 19, 2024

Banking and fintech have been thrown on their heads – from being the lowest-valued sector in the world in 2021, to having over 300 fintech startups with unicorns valuations (over $1 billion) in 2024, compared to only 25 in 2017.

So, what does that mean for the future of the banking and financial industry?

Banks that don’t start radically adapting and improving their operations processes can be left behind in a dramatic market shift. Startups that don't ensure that their operational processes are as efficient as possible before expanding will accumulate a large operational debt.

But there's more: this article will walk you through the current state of fintech and banking, and how their processes can be automated for a higher efficiency.

In this article:

An introduction to fintech

While banking has been suffering, fintech has been set on a course of hypergrowth with a market value sitting at around $5 trillion, with estimates above 23% growth for the next 5 years, as Harvard Business Review reports.

The growing revenue of the fintech industry (Source: Exploding Topics)

So, with financial services organizations falling at both extremes of no growth and hypergrowth, it might be worth taking a closer look at different sectors of the financial services and technology industry to understand why this might be the case. 

Traditional banking

28-year-old Bill Gates at an NBC interview

In May 1994 Bill Gates gave an interview where he stated that retail banks were dinosaurs that would be bypassed by a world slowly adapting to major technological shifts.

His vision came a bit early, but today we see it turned into a reality with shifting values and mentalities toward financial services. 

These new values include:

  • Excellent customer service
  • Faster transaction times
  • Climate-friendly fund options
  • Mobile-focused experience
  • Greater focus on individuals and small businesses

Today, companies that can offer small investors and businesses access to the financial world are the ones coming out on top. In 2015, 20% of small business loans were denied by banks while only 45% were granted in full (most of them being from early-stage fintech companies). 

One assumption that can be made is that traditional banks are still lagging behind in technological advancements to make lending to small businesses and individuals easier in terms of operational efficiency. 

We can see this switch currently towards more personal and tech-based transactions for smaller businesses and individuals with banks like JP Morgan Chase, Bank of America, Wells Fargo, and others. Much of the language they’re using in the videos linked above is quite similar. They primarily are trying to address these new values that are a determining factor in market growth.


Neobanks emerged after tech giants (like Gates) began to think about digital transactions for money. One of the first, and most famous examples of a neobank is PayPal when it was launched back in 1998 as Confinity by Max Levchin and Peter Thiel (if you’re wondering where Elon Musk went, he was about to launch which would later merge with Confinity to become PayPal).

There was a short boom of financial technology services at that time before the second explosion of newly founded neobanks appeared around the 2010s: companies like Chime in 2012, N26 in 2013, Revolut in 2015, Varo in 2015, Monzo in 2015, and many others. 

When asked why customers started using a neobank compared to a traditional bank, 32% of survey respondents listed price and easy access as reasons, while 30% said the speed of service. 

Neobanks have accomplished this with relative ease, but still carry operational debt from inefficient processes that have been scaled — like large operations teams for processes like customer support, customer complaints, sending new cards, reactivating locked accounts, and other processes. 

Wondering how we help some of the world’s most popular fintech start-ups scale down on operational debt? We’ll show you!

Investment banking

Investment banking is one function that can happen in a traditional or a neobank. JP Morgan Chase is an example of a traditional bank that also does investment banking. Some fintech organizations that specialize in investment banking are Robinhood, Slingshot, and eToro

The industry of investment banking has also been rocked by recent shifts in public opinion.  One new proposal that has passed in the United States is for investment bankers to list the carbon emissions their investments make (even if the company they have invested in doesn’t publicly disclose this). This isn’t just another shift in legal requirements for the financial services industry but signals a market trend too as green bonds doubled to $620 billion from 2020 to 2021 with growth expected to continue with a new sector of “sustainable financing” emerging amidst growing climate concerns. 

If you were wondering where neobanks are in all of this, you might be surprised to hear that they tend to expand in the insurtech space with N26 offering things like electronics insurance, Revolut offering pet insurance, Chime having announced its own insurance plans in 2021, and others following suit. This means that there is a separation between neobanks and fintech investment apps. 

Investing, banking, and more, right from your smartphone. Are you aware of the automation behind your mobile financial services?

What exactly are banking operations?

Now that we’ve understood the foundation of the financial services industry, let’s look at how these changing market conditions are taken into consideration when looking to automate their banking operations processes with new software solutions. 

So, which operations and processes does banking use?

1. Loan processing

Loan processing takes a lot of manual work, and many traditional banks are missing out on automation opportunities for this process and are allowing neobanks to take control of the small and medium business loan market.

Let’s take a standard workflow to understand to see where the missed opportunity for automation is exactly: 

  1. Receiving and reviewing the loan application: This normally involves verifying that all necessary documentation has been provided and that the application is complete.
  2. Checking credit history: In order to determine the applicant’s creditworthiness, the financial institution will check the credit history. This includes obtaining a credit report from a credit bureau and reviewing it for any problems, such as late payments or high levels of debt.
  3. Evaluating income and assets: The financial institution will also need to evaluate the applicant’s income and assets to determine whether they have the financial stability to repay the loan. This involves reviewing payslips, tax returns, and other documentation.
  4. Determining debt-to-income ratio: The financial institution will also need to calculate the applicant’s debt-to-income ratio, which measures the borrower's ability to repay the loan based on income and current debt obligations.
  5. Deciding on the terms: Once the financial institution has gathered all of the necessary information and evaluated the applicant’s creditworthiness (typically called KYC processes), the financial institution will need to decide on the terms of the loan, including the interest rate, repayment period, and any fees that will be charged.
  6. Communicating the decision to the applicant: Finally, the financial institution will need to communicate its decision, whether the loan is approved or denied.

Opportunity for automation: Each step listed above is just one of the standard set of steps a financial institution would need to go through to approve a loan, which is why many traditional banks had a minimum loan requirement before spending time to go through this process.

Neobanks have made it possible for these processes to be semi-automated, but they still scale large teams to take care of some steps in a process. 

‍Want to see how? Check out this video to see how it works.

2. General banking operations

The biggest changes from traditional banking to neobanks have been seen in the standard banking operations and the shift to move these into an entirely digital, front-facing experience for customers. 

What are some of the standard workflows both traditional banks and neobanks go through regularly?

  1. Opening new accounts: When a customer wants to open a new bank account, the bank will need to process the application and set up the new account. This involves verifying the customer's identity, obtaining necessary documentation, and completing paperwork.
  2. Processing transactions: Both banks and neobanks handle a variety of transactions on a daily basis, including deposits, withdrawals, and transfers. These transactions are processed manually by bank employees or through automated systems such as ATMs or online banking platforms.
  3. Managing accounts and loans: Banks are also responsible for managing accounts and loans for their customers, including tracking account balances, processing loan applications, and collecting payments.
  4. Maintaining security and compliance: Banks are also responsible for maintaining security and compliance with laws and regulations, which involves implementing and enforcing security measures, conducting audits, and reporting to regulatory agencies.

Opportunity for automation: In traditional banks, we might be familiar with how manual some of these processes were — just imagine a decade or two back in the early 2000s or 2010s when we could walk into the physical location of a bank and speak to someone in person. 

Today, many banks are shifting to completely digital concepts with on-call bank tellers who can facetime with customers. 

Neobanks started with already digital processes for this, but only for their website and some internal processes. In reality, there are teams of people working behind the scenes to make sure things are completed efficiently and on time. 

Payments processing is more that just customer to vendor transaction.

3. Customer service

The last aspect that we’ll discuss in this article for automation opportunities for banking processes in both traditional and neobanks is customer service. In a 2022 study done by Intercom, they found that 3 out of 4 people look toward a company’s customer service before making purchasing decisions. 

They also found that over 90% of millennials and gen z prefer the use of chatbots for easier and faster access to problems and information. 

These are huge behavioral changes that point to transformative digital changes coming to us in the future for the following banking processes:

  1. Responding to customers: Customer service departments or representatives are responsible for receiving and responding to customer inquiries and requests. This involves answering questions, resolving issues, and providing information.
  2. Handling customer complaints: When customers have complaints or concerns, financial institutions need to investigate and resolve these issues quickly and accurately. This involves identifying the cause of the problem and finding a solution, as well as communicating with the customer to keep them informed.
  3. Assisting with questions or concerns about products and services: Financial institutions also have customer service representatives who are responsible for providing assistance with products and services, such as helping customers to open new accounts or apply for loans.
  4. Maintaining customer records: Financial institutions also need to maintain records of customer interactions and requests in order to track customer service performance and identify areas for improvement.

Opportunity for automation: Traditional banks had a few bank tellers who would be able to handle all of these customer service requests in the physical location they were in. Over time, however, more and more people would like to have customer service online instead of having to go all the way to the bank’s physical location, which might be a far distance as banks begin moving back to big cities. 

Neobanks, on the other hand, are starting to see the playing field leveled as traditional banks switch to digital banking models, like Ally Financial, which is over 100 years old and did a complete strategic turnaround over a decade ago to become a neobank. 

Want to see more? Check out our ultimate guide to financial services automation

Process automation in banking and financial services

Automation opportunities are sitting right within reach of both traditional and neobanks, but adoption is difficult because it means a major shift in mentality for business leaders, who traditionally relied on large teams to get things done. 

This is a huge missed opportunity to restructure processes to gain a strategic market advantage since 75% of tasks in financial services operations can be automated along with an additional 40% of the strategy as well. 

Financial service startups are working hard to survive a volatile market climate.

Surviving volatile market and regulations

The benefits aren’t the only thing that will eventually push the financial services industry to adopt new automation technology, but also increasingly more unstable marketplaces that have emerged in the past years. 

This includes consumer behavior like shopping online, which led to Amazon’s 220% growth during the pandemic, or the surprising growth of the luxury goods industry during high inflation and high unemployment rates at the end of 2023. 

This also comes off the back of the Great Resignation that has shifted to mass layoffs right before the 2023 holidays. With such unprecedented fluctuations, having a stable team to still offer the same level of quality and service is a huge strategic advantage in the long run. 

Through strategic automation, organizations can keep their teams lean from the beginning to avoid layoffs and make sure tasks aren’t repetitive or mind-numbing. Automation takes away the most boring aspects of work like transferring user data from one tool to another, sending out the same email 100 times, or notifying customers when there are changes in regulations. 

A centralized, workflows dashboard in Next Matter, showing all currently running workflows and their respective prioritization and status.

Another reason that automation is important isn’t just to keep up with changes in the market, but also to keep up with changing laws and regulations for the financial services industry. Moving into the digital space has also brought unexpected changes in security risks, so these laws are still catching up to the hundreds of start-ups developing groundbreaking innovations that are changing the way we handle money. 

Automation can help standardize processes and workflows while allowing COOs and heads of operations access to these workflows and quickly adapting them when needed without having to train their teams on new processes. 

All of the workflows in Next Matter are also built specifically for auditors as each process has a dashboard where the times of completion can be seen for each workflow. That includes how long it took and who was involved. 

Automating banking and fintech operations with Next Matter

We’ve created Next Matter as a software solution to all of these problems. Our goal is to build a low- and no-code tool for organizations to automate all of their operational needs, regardless of the department. You can think of it as a workflow management and automation tool, but one that takes former features to the next level of software development. 

After making the decision to automate your organization’s operations with Next Matter, you'll start by nominating a few people who would like to be trained as builders, which means these team members will be the ones creating and updating the workflows within your Next Matter workspace. 

This will include fun exercises for a day to help understand and learn how our software works (because something that’s this customizable takes a moment to get a grasp of). 

Empowering builders to unlock success

Your builders will be the key to unlocking your organization’s full automation potential as they begin to create workflows and weave them into internal processes. You’ll see your team spend less time switching between tools as well since Next Matter can integrate with both external and internal tools. 

Why wait to automate when you can improve employee satisfaction, create lasting customer trust, and build a more resilient organization today? Try Next Matter


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About the author
Luke Walker is the Product Marketing Manager at Next Matter. He is a longtime process hacker, and writes about marketing, business digitization, leadership, and work-life balance. When he's not at work, you can find him listening to records or climbing rocks.

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