is continuously transforming the way we live. Everything we do and every advancement we make as humans is marked by a leap in technology. Every top global industry is constantly trying to mold itself according to the rapidly changing technological advancements. The finance and banking sector has also felt the need to change the dynamics and modify its style of working by embracing new technologies. It has undergone a massive change in operations because of technological innovations and the change in regulatory requirements. RPA and AI are the latest technologies today redefining how banks operate by automating processes such as Know your customer (KYC) and personalizing customer services.
RPA has been recognized as the fastest growing segment of enterprise software with 63% growth in 2018 - Gartner.
Significance of RPA in the banking sector?
RPA addresses the key challenge of attaining efficiency but keeping costs as low as possible. But within the banking sector, this goal comes with an additional complexity of maintaining optimum security levels. To meet these demands, RPA (Robotic Process Automation) has become an effective tool. It has taken forward the transition from service-through-labor to service-through-software.
The financial sector has adopted robotic process automation – most banks in the UK now follow a process of integrating web robots for increasing efficiency and accuracy of data. And all this while cutting costs and reducing risk of non-compliance and security breaches. Web robots are, in simple terms, software applications designed to emulate what humans can do, but faster, error-free and more efficiently. RPA is finding application in not just banks, but other related financial services as well.
RPA technology for banks explained
RPA is an acronym for Robotic Process Automation. As suggested by the name, it’s the use of software robots to automate mundane, repetitive tasks. RPA uses software robots or software to perform several tasks like automating transactions, data-processing, establishing communication with systems, performing huge calculations without errors, and fast problem-solving. The banking industry is exploring the potential of this technology in order to breakdown proper jobs, reduce human-induced labor, continuously increase productivity, improve efficiency, and perform rather time-consuming jobs faster. RPA tools and software are capable of mimicking human actions and replicate them to perform tasks that are repetitive in an accurate manner. RPA has proven to be quite efficient in handling work overflow and tasks involving heavy data. Some examples of use of RPA in the banking sector include -
- Collecting and validating customer data for KYC
- Automating the process of onboarding a new customer – RPA is being used in the Retail Banking scenario to collect information from the customer, provide data to the customer service exec in the bank to be able to take a decision on opening an account, approving a loan application, conducting the credit checks and more.
- RPA has been used to automate anti-money laundering checks.
- To keep track of data and its audit trail for compliance purposes and meeting regulatory standards.
These are just a few banking processes that are good candidates for RPA Automation.
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Benefits of using RPA in banking
Ever since RPA’s introduction to the financial world, it has become a force to be reckoned with. The virtual workforce has successfully helped banks minimize and in many cases, eliminate human intervention to a large extent in the execution of earlier human labor heavy tasks.
Faster decision-making and improved operational efficiency are huge pros of adopting RPA technology. By automating much of these time taking, tedious, manual tasks from humans, banks and other financial institutions have been successful in significantly reducing the dire need for human involvement in every step of the way. This has also resulted in humans focusing on more value-added tasks such as improving customer services. This has a direct positive impact on everything from financial performance and cost management to staffing and efficient working.
Banking calculations, accounts matching, scenario analysis, predictive analysis and other activities particularly involve high risks of human inaccuracy and errors. With the help of RPA software, these challenges are being tackled effectively. Using RPA in banking, financial and related sectors has helped reduce overhead and operation costs and dramatically decreased workload which in turn, has increased the efficiency of the employees. Time-consuming and lengthy tasks can now be performed within a very short period.
What does RPA involve?
For banks, RPA involves identifying the right processes to automate. We have listed some examples above but it is being used in loan rendering, underwriting, account onboarding, creating personalized offeres for customers, trial balancing and much more. RPA applied to a suitable process in conjunction with AI could automate the whole process end to end and call upon human attention only when an exception is raised. But how do banks get the best from their RPA investment? What is involved in a good RPA implementation. We have tried to answer this question separtely in our Blog – 9 ways to establish an RPA Centre of Excellence (COE). However, in short for banks, RPA implementation should involve –
- Identifying the right process to automate
- Evaluate overlap/dependability on other applications or business processes
- Orchestrate the robots to automate processes
- Create a centre of excellence to monitor/update and govern the robots.
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