Robotic Process Automation in Banks

Ashish M. Shaji

22 Jul, 2020

The world is moving at a fast pace today, and your enterprise also needs to keep up with this pace. In today’s world, where there are fast-paced innovation and evolution, many businesses are in a race against time to elevate their businesses. Strategies like cost management and time-saving mechanism with precision and accuracy are required. Here the concept of Robotic Process Automation in Banking is required.

What is Robotic Process Automation (RPA)?     

RPA is an automatic software that enables you to create a software robot that helps in automating any business process. It can perform the tasks you assign and control. RPA in the banking industry can provide a cost-effective substitute for human resources, whether in the house or outsourced HR.

How has Robotic Process Automation impacted the banking industry?

If you are to remain competitive in a saturated market and considering the widespread adoption of virtual banking, banking firms must find a way to provide the best user experience in banking. RPA has streamlined a variety of back-office processes that are otherwise difficult to manage.

This process has allowed a lot of manual work to be shifted from humans to machines. It has significantly reduced the need for humans in the process, thereby impacting on performance and efficiency levels. Banks around the world are employing RPA as it minimizes the manual processing of huge data with banks.

The main features of RPA like 24*7 execution, lower costs, reduction of time to market, etc. have impacted the banks all around the world. Therefore more and more banks are now adopting this process into their system. Several processes within a bank have benefitted from banking automation through RPA technology.

What are the benefits of Robotic Process Automation in Banking?

Various institutions in the financial service sector are looking to adopt a more effective automated technology that makes them a cut above their competitors. Especially in these times where there is increasing market pressure and lower interest rates, businesses are seeking to meet the needs of their customers by providing them a great user experience.

In this segment, we shall look at how the RPA process is benefiting the banking industry.

• Cost Reduction

Banks or any other organization is in constant pursuit of improving quality and performance, and this can be achieved through an experienced and efficient staff who can bring satisfaction to their customers. However, achieving this is often expensive, and experienced professionals come at a price. Here RPA deployment can save a lot of costs. 

It can eliminate the need for certain steps within a process, thus saving other expenses incurred by those steps. It can also raise profit margins as robots save the costs expenses linked to human employees.

• Accuracy

Accuracy is one of the other benefits with RPA in the banking industry as it eliminates the human-related errors. The robotic systems can execute specifically configured operational instructions, which results in precise, accurate, and error-free execution, thereby reducing the time and costs required to correct human errors.

• Efficiency

The implementation of RPA allows the banks to employ their full-time employees for other quality-oriented and complex tasks that need human intellect and creativity. This enables the employees to work towards creating and providing more customized products for their customers. It will benefit the enterprise in the long run.

• Flexibility

The AI of the new age robots is designed in a way that it requires less maintenance and coding requirements. Deployment of such RPA in banking provides a hassle-free procedure. Robots can also adapt to the operational setup flexibly; hence the robots can easily work on business applications in banking and financial institutions.

In which areas can Robotic Process Automation be deployed in the banking industry?

RPA technology can be used in the following areas:

• Customer Service

Banks require dealing with many queries like account inquiry, loan inquiry, etc. The amount of queries is endless, and it becomes increasingly difficult for the customer service team to address them all in less turnaround time. The use of RPA can help in resolving low priority queries, thereby freeing up the customer service team to address the high priority queries.

• Compliance

Compliance with rules is essential for banks, but complying with so many rules becomes an arduous task for it; therefore, RPA can help the banks to adhere to the rules easily.

• Accounts Payable

Accounts payable is a monotonous task, but RPA can help in automating the whole process and credits the payment to the vendor’s account.

• Fraud Detection

Frauds have increased tremendously in this industry, and identifying fraud patterns manually is a tough task. RPA deployment in banking can help in identifying potential frauds. The banks can then scrutinize the account and investigate it.

• KYC Process

KYC process is an essential compliance process for banks. It involves considerable costs and resources; thus, banks have started using RPA to collect customer data and also to validate it. It also saves banks’ time.

• Account Closure Process

Banks receive a number of account closure requests due to a variety of reasons. This can happen if the customer doesn’t furnish proofs for operating the account. With RPA, banks can send automated reminders to customers asking them to furnish it and can also process the account closure requests based on set rules with 100% accuracy. 

Conclusion

Also, read: Rise of Core Banking in India