Role of RPA in the Banking Industry

What is Robotic Process Automation (RPA) in Banking?

At its core, Robotic Process Automation (RPA) is used by banks and other financial institutions to automate manual business operations so the banks can stay competitive in today’s market. If executed properly, banks can begin to notice a positive ROI from RPA in as little as 4 weeks.

We can explain RPA in banking like the use of a variety of robots and Artificial Intelligence (AI) to replace and augment human processes in banking. According to Forrester, the RPA market is expected to surpass $2.9 billion by 2021.

The advancement of digital banking solutions, cryptocurrency, mobile payments, and other new companies have pushed major banks to execute new technologies to offer better benefits to their consumers and retain a competitive edge. Digital transformation projects are a major focus for many banks and RPA is just one part of the digital transformation strategy.

Banks use RPA to perform repetitive tasks like data entry and to automate client service and back-office workflows. Financial institutions that utilize RPA allow their staff to concentrate on more complicated tasks, while the RPA bots take care of everyday activities. RPA can also be supplemented with AI and Machine Learning (ML) to manage sophisticated processes with higher accuracy and efficiency.

Benefits of Robotics in Banking

Banks that execute RPA can elevate their consumer experience while enhancing quality and shortening costs. It’s not uncommon for a bank to start seeing positive ROI in as little as four weeks. Here are just a few samples of how banks profit from RPA:

No New IT Infrastructure

With conventional IT projects, new infrastructure is often required before the project can start. However, executing RPA in banking needs almost no new infrastructure.

Banks can leverage existing IT infrastructure to start reaping the advantages. One special feature of RPA is that it can take benefit of the native user interfaces of living legacy systems to achieve its automated tasks, which makes it a “minimally invasive” solution that creates nicely upon existing infrastructure.

Save Time and Money

Due to COVID-19, cost savings initiatives are the main priority for banks to be competitive and deliver better services. How does the performance of RPA enable banks to save time and money? Executing RPA within different functions and departments makes banks execute procedures faster. Research shows banks can save up to 75% on certain operating procedures while also enhancing productivity and quality. While some RPA projects lead to less headcount, many top banks see an option to use RPA to help their current employees become more effective.

Improve Operations

The digitization of data has permitted banks to decrease paperwork. RPA can fast scan through appropriate knowledge and glean strategic analytical data. Various RPA tools provide drag-and-drop technology to automate operations with little to no development. Likewise, bots resume working 24/7 to take care of data entry, payroll, and other mundane tasks, allowing humans to concentrate on more strategic or innovative work.

Augment Human Workers with a Digital Workforce

The concept of a “digital workforce” is occurring these days due to the rise of digital technologies. Robots take care of data entry, payroll, and other data processing tasks, while humans research reports for gathering useful insights. On top of that, the human workforce can have their banking robots help them gather data and function data fast so humans can complete their work with higher efficiency.

Installing and updating banking procedures can take as little as a week. Furthermore, robots can be pushed in short cycle iterations, making it easy for banks to “test and learn” about how humans and robots can function together.

Better Regulatory Compliance

Banks and other economic institutions need to comply with many legal and financial regulations. According to a recent report, over 70% of compliance officials believe automation tools like RPA could seriously enhance the use of compliance resources. RPA is available 24/7 and has shown high accuracy in increasing the quality of compliance procedures.

Staff can use RPA tools to gather data and explore different transactions against clear validation rules through Natural Language Processing (NLP). If RPA bots find any suspicious transactions, they can fast flag them and reach out to compliance officers to take the case. This type of automated proactive vigilance can help prevent financial institutions from facing financial losses and legal issues.

Improve Client Experience

RPA can help banks enhance their client experience. There is no longer a requirement for clients to reach out to staff for getting answers to many familiar situations. RPA robots can fast analyze the challenges of customers and deliver answers to their queries. The banking staff is then able to concentrate on taking the more complicated buyer problems. Moreover, robots are available 24/7 to manage customer problems, which significantly improves customer happiness.

Likewise, other time-consuming processes can be expedited. For instance, RPA can decrease loan processing times, leading to more satisfied clients who want to conduct more business with the bank.

Use Cases of RPA in Banking and Finance

In the BFSI part, RPA can be used in numerous methods to relieve human resources and mistakes. For instance, chatbots can take customer service executives' places to solve customer queries, complete KYC, credit card or account closure processes, mortgage processing, fraud detection, collection, and much more.

One can easily guess how much time and resources could be saved through Robotic Procedure Automation in banking. Let us examine the most common use cases for more useful understanding:

Better Client Experience and Service

Banks obtain multiple questions every single day. Some questions are regarding loans or accounts; others include bank fraud, debit cards, or transaction-related queries. A customer service team might find it very challenging to address these questions in a short turnaround time.

However, by integrating RPA, the bots can address generalized queries, and the customer service team can take complex questions.

More rapid Processing of Credit Cards

Until a few years ago, the processing of credit cards was a long procedure that took weeks for only verification and approval. Thanks to robotic process automation in finance, it takes just a few hours to gather the needed documents, run credit and background checks, and make the decision to approve or dislike the request.

The whole procedure from confirmation to dispatch has become much quicker, leading to a surge in the number of credit card users.

Compliance Reporting

There is a plethora of compliance rules for banks, and banks have to manage a lot of data for reporting. By implementing RPA in banking and finance, complying with the rules becomes easier. Many complicated methods applied in the collection of data can be automated to improve banking processes and threat management capabilities.

Faster KYC (Know Your Customer) Procedures

According to Thomson Reuters, 'several banks pay around $384 million every year on KYC compliance'. Due to such massive costs associated with KYC procedures, this becomes a perfect use point of RPA. Through automation in banking and financial services, banks can aggregate client data, evaluate, and validate it quickly with fewer mistakes and manpower.

Fraud Detection

With the advancement in technology, the numbers of fraudulent transactions are also increasing, and observing all the transactions manually to determine fraud practices is almost impossible for the banks. To reduce such incidents, the RPA's role in banking and finance is crucial as it automatically inspects suspicious trades flagged by the AML (Anti-Money Laundering) systems.

Mortgage Loan

According to ComTec, it brings more than 50 days, on average, to process Mortgage Loans. With multiple parameters to check, a slight error delays the procedure considerably. Due to considerable scrutiny checks and a limited set of rules, this becomes one of the ideal use cases of RPA in finance.

By incorporating RPA, banks can run up mortgage processing and also avert any problems that might cause a delay.

Report Automation

The manual procedure of making reports is time-consuming, boring, and prone to mistakes. However, RPA systems hold all the data and can fast fill up the needed areas in the report without any error. This will help the decision-makers to come up with plans quickly to achieve a competitive edge.

Account Closure Procedure

The banks might accept many accounts closure requests in a month. This could be due to any cause. RPA can track the clients, send automated notifications, and schedule calls to find out the 'why' so client managers can offer a solution. After this, relying on the course of action, RPA can trigger further action.

Wrapping Up!

To overcome the workflow bottlenecks, and potential human mistakes, get created with AI, ML-enabled robotic process automation in finance and accounting. This will also assist in eliminating the inefficiencies that direct to poor consumer service. Duplicated and boring jobs keep the employees disengaged. With the performance of robotic process automation, a notable difference can be observed in the following areas of business:

• Analyze consumer behavior regularly with the help of data and reports produced by RPA bots to drive sustainable development.
• Enhance/boost the working efficiency of the team by eliminating the monotonous jobs and leaving the same to RPA bots and get real-time data analysis
• Keep your consumers notified about various required and new parts of your products and services and improve the customer experience.
• Automation will also guide to a reduction in financial fraud and proactively flag examples of potential fraud.
• Ensure data subordination throughout the procedure.
• If you have any confusion, Get in touch with our experts.