Listen: How automation can help alleviate the ennui causing the ‘Great Resignation’

When the pandemic hit, it became increasingly difficult for lenders to know how many applications for loans might come through the door. That led to volatility in the system that became even more pronounced when the “Great Resignation” hit, Sam Bobley, founder and CEO of intelligent document automation company Ocrolus, tells Bank Automation News in this episode of “The Buzz.” “The Great Resignation” is what pundits are calling the high resignation rates and labor shortages that businesses have been facing since 2021. “Lenders had more difficulty determining how many applications might come in the next month. When you couple that with the problem of people working from home, people resigning or leaving their job security issues, all these other issues that came about, it became really clear to lenders that they don't want to be in the supply-and-demand game,” Bobley tells BAN . “If there's a better way for them [lenders] to manage their workforce by using automation to more effectively flex up and flex down resources, they are interested in doing that.” In this podcast, Bobley discusses the factors behind the Great Resignation and how automation can take over more mundane tasks to provide employees at lenders and other financial institutions with more time for meaningful work. Subscribe to The Buzz Podcast on iTunes , Spotify , Google podcast , or download the episode .

Bank Automation Summit, taking place March 1-2 in Charlotte, is the first and only event to focus solely on automation in banking. The event will feature the brightest minds from across financial services on intelligent automation strategies and deployment. Learn more and register here for Bank Automation Summit 2022 . The following is a transcript generated by AI technology that has been lightly edited but still contains errors. Loraine Lawson Good day. Welcome to the Buzz, a Bank Automation News podcast. I’m Deputy Editor Loraine Lawson and recently I spoke with Sam Bobley, founder and CEO of intelligent document automation company Ocrolus. I asked him to explain the Great Resignation and how automation can help address the problems it creates. Sam Bobley So look, the the great resignation? I mean, I think you know, COVID has been a COVID has caused a crazy impact on the way of working. And I think one, one effect that we've seen of COVID is, I think two things. One is companies reevaluating how they do their own business. And the second piece is workers evaluating, you know, how they want to spend their lives and if they want to go into an office every day, have more flexibility, or perhaps even have a change in career entirely. So, you know, given the the pandemic and just the craziness that we all have dealt with over the last two years, I think we've seen a lot of change in behavior, both on the company side as well as on the employee side. Loraine Lawson You do work with a lot of financial institutions, correct? Sam Bobley We do our primary customers, our lenders, and specifically small business lenders and mortgage lenders, our two biggest customer base. Loraine Lawson So are there ways in which this is particularly affecting them or differently affecting them? Sam Bobley I'd say yes, I mean, take let's take them one at a time. So in small business lending, small business lending was profoundly impacted by the pandemic, when the pandemic first hit, businesses were forced to shut down. And thus lenders were more timid about, you know, continuing with ongoing loans, because the business was shut down, the business couldn't generate revenue, and thus the business was at risk and paying back loans. So what happened in small businesses, the government stepped in and initiated a stimulus package called the paycheck Protection Program, PPP. And the government basically created a vehicle for lenders and banks to disburse funds to small businesses in need to help them keep their lights on and power through so that they could make it to you know, the end of the closures and thus to the other end of the pandemic, where they could resume recurring loans if they were in need of additional capital. So we can talk more about, you know, small business lenders and lean operations etc. But the the major takeaway is, small businesses were really trying to preserve cost, more so than any time in you know, in history, and, you know, needed capital keep going and needed lien operations to keep running their business through these trying times. On the mortgage side, there was a little bit of a different situation going on. During 2020, you know, mortgage rates became very favorable. And there was a big rush for additional volume on mortgage applications and refinances. And lenders were dealing with this increase in volume while simultaneously having their workers in a work from home setting. And it caused a lot of issues, you know, incoming incoming loan applications that normally would be reviewed by underwriters or credit analysts sitting in house at an office. Were now in some cases being sent to personal homes. Where PII personally identifiable information was at risk of being accessed on laptops, personal computers in different environments, then, you know, then banks or lenders, banks and lenders are typically comfortable with. And there was a big rush to set up VPNs and other types of secure ways of accessing this information in a work from home setting. You know, I think mortgage lenders and banks powered through and did the best that they could, given the circumstances. However, I do think one big takeaway is reflecting on what happened in 2020 2021, brought about this stage of kind of like what I described as calculated post pandemic planning, where folks could realize and understand, hey, these are the different things that happen to our business in 2020. How are we going to create a world where over the next 5-10 15-20 years, we are able to use technology and other types of adaptive measures to prevent similar circumstances from happening in the future? Loraine Lawson That certainly aligns with what we've heard, especially coming up the PPP loans. So what are you seeing in terms of automation related to specifically to the Great Resignation? Are there particular areas, people are automating it or looking to automate or types of tests? Sam Bobley Yeah, I think one, one huge area that's, you know, very relevant to our business. Ocrolus is back office automation, and specifically, managing the supply and demand problem. lenders have a supply and demand problem in the sense that they don't know exactly how many applications will come through their doors. And they were trying to process a variable number of applications. Typically, with a fixed number of resources, right, you have X number of underwriters or X number of credit analysts sitting in your back office, and you're dealing with this variable number of applications. Historically, they were, you know, lenders were able to manage that supply and demand. However, customers always want a faster process, right. In mortgage, I think the average application process is something like 40 to 50 days. And of course, if you ask any customer, Hey, would you rather have that done in 30, or 20, or 15, or 10, they're all going to say yes, and in small business and consumer and other types of lending products, that that same concept applies, but the window is smaller, right, they might be used to days or weeks, and they love to get it in hours or instantly. When the pandemic struck, the the process of evaluating how many applications might come in the door became more difficult than ever, there was a lot more volatility in the system. And let lenders had more difficulty determining how many applications might come in the next month, when you couple that with the problem of people working from home, people resigning or leaving their job security issues, all these other issues that came about, it became really clear to lenders that they don't want to be in the supply and demand game. And if there's a better way for them to manage their workforce by using automation to more effectively flex up and flex down resources. They are interested in doing that. And the analogy is it's it's kind of like, you know, cloud computing was maybe a decade ago, right? Where if you can hit a button and flex up or flex down your computing resources, that is very, very desirable. And lenders are now realizing that technologies like Ocrolus and plaid and other infrastructure providers offer inability to similarly flex up your flex up or down your processing capacity based on the incoming amount of applications rather than the old fashioned way, which is, hey, we need to go hire X amount of additional people or we need to go let go X amount of people because we don't have that incoming value. Loraine Lawson Okay, so can you give me some we talked about back office automation a lot. But can you give me some specific examples of how banks automate the back office like what you've seen, I know, obviously, you do document on an intake automation. But beyond that, what do you see? Sam Bobley For sure, I think the biggest trend is robotic process automation. So there were a slew of companies that popped up fairly recently, the leaders of which are UiPath, Automation Anywhere, Blue Prism. And there are there are several of these folks now. And in recent years, the value of robotic process automation has has really taken off. And banks and lenders are starting to think about kind of an orchestration layer, right? If you can picture all of the different tasks that are done in the back office. What are the low hanging fruit the most simple tasks that instead of a human performing, we can allow the human to focus on more cerebral tasks and allow a robot to handle those mundane routine tasks. So the first wave of enterprise automation horizontal automation companies primarily in the RPA space popped up and a good amount of back office tasks started to be offered Immediate. However, robots are not able to automate every task in a back office. And you know, at Ocrolus, we are targeting one specific task that historically robots have not been able to successfully automate. And that that task is document analysis. When a lender is tasked with processing a financial document, it can be it can be quite complex. financial documents can come in many different formats. Some of them are structured and relatively easy to process. Others are semi structured like bank statements and pay stubs, or invoices where they can appear in a different format, a wide variety of different formats depending on you know, where, where the document originated from. And then some documents are completely unstructured, where, you know, there is no sense to where the information appears. And it's more about free text and trying to process the language and you know, understand what's going on in the context of that Ocrolus list this, we created a solution to handle documents that were historically difficult for machines to read. And it fosters this broader theme of automation, where, you know, I'm making up numbers, but let's say that a bank was able to successfully automate 30% of their workflow prior to Ocrolus, adding Ocrolus into the equation, they might be able to get to 50 or 60% of their workflow. And then over time, they will continuously chip away to automate more and more of their workflow, which allows them more scalability, and also allows them to redeploy human resources to the most cerebral tasks that are directly relevant to their business, rather than just, you know, checking boxes on on process. Loraine Lawson you've talked a little bit about how banks are automating and that that sort of as an example of fintechs I wonder, are there different ways in which fintechs do typically automate versus banks? Sam Bobley I think the methods are pretty similar. And I think one of the trends that we're seeing now is, I think a couple trends. One is like the line between banks and fintechs is is slightly being blurred, right? There are some fintechs, who are applying for banking charters and becoming banks, there are banks who are acquiring fintechs are offering FinTech II type products. So I think in general, that that line is being blurred. And then the second piece is I think banks are really learning from fintechs. I mean, some of the largest fintechs, folks like PayPal and square, they have now reached a size and scale where they are direct competitors of the bank, right there, you know, similar if not bigger than many of these banks. And banks are looking at their roadmaps and trying to, you know, determine how they can implement similar automation technologies that Pay Pal and Square implemented, so that they can create as smooth and user friendly experiences, digital experiences, as these fintechs have that have proven to the world to be successful. And, you know, the last decade or so, and I think that that trend was already taking place in 2017, 18, 19. And then the when the pandemic it, it was just greatly accelerated. And the conversation changed from, hey, what can we do to automate over the next five to 10 years to pay? What can we do to automate over the next several quarters, because this is now a major priority for our for our bank, and for our back office. Loraine Lawson You’ve talked about how the banks will automate over the next five or 10 years — has the great resignation changed their focus in any way? Sam Bobley More urgency, I think, you know, as you have less people to rely on to, to do these types of tasks, I think it just increases urgency on both internal builds, you know, product product builds to implement technologies and to figure out ways to, you know, to automate work that used to be done manually, as well as on the partner side. So, you know, there are now several fintechs, who have a nice collection of banking customers as partners of theirs. So I'm thinking more about companies like blend or amount, or Encino, where, you know, a lot of their business is driven by partnerships with banks. And I think the great resignation has, you know, caused banks to think about those partnerships more seriously, and to invest in, you know, kind of extending a hand over to their FinTech partners and working together. Loraine Lawson Suddenly, I wonder, how does automation help the great resignation? You've talked a little bit about But are there other ways in which it helps address the problem? Sam Bobley I think the, you know, one of the big items associated with great resignation is just having folks do what they want to do. Having folks do work that is enjoyable to them that gets them out of the bed every morning. And that is what they signed up for. And I think we are coming from a world where certain employees at banks and lenders who may have signed up for an underwriting function, end up spending a significant amount of their time sifting through documents page by page, line by line. And that is not the job that they got excited to do. It's a necessary evil, it's part of the job in order to get to the credit assessment. But if there's an opportunity to either augment that, that piece of it, or outsource that piece of it to teams of people who is who it is their core expertise to process documents, that allows the worker to focus on what they want to do. And I think that that's one of the greatest benefits of automation is, you know, reducing the amount of unwanted and unnecessary work and allowing folks to really focus on their core competencies and make the most of, you know, applying their their cerebral skills to their work. Loraine Lawson: You’ve been listening to the Buzz, a Bank Automation News podcast. Thank you for your time, and be sure to visit us at Bank automation news.com for more automation news. You can also follow us on Twitter and LinkedIn. Please don’t hesitate to rate this podcast on your podcast platform of choice.

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Listen: How automation can help alleviate the ennui causing the ‘Great Resignation’

Tech lets lender employees focus on meaningful work, says automation leader

U.S. Bancorp partners with Microsoft to integrate payments, apps

Radha Suvarna, Citizens’ head of enterprise payment strategy and innovation, joins Bank Automation Summit

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