The banking industry, as always, is in a state of constant flux. You keep up. Adapt. Stay Ahead.
According to PWC’s report titled “Financial Services Technology 2020 and Beyond”, compared to other sectors 81% of CEOs in the banking industry are focused on the pace of technological change. Why so?
Banks are constantly on the lookout for:
- Improving customer experience
- Staying ahead of the competition
- Hassle-free and faster processes
To all these main concerns, what could be the best digital solution? Enter robotic process automation, also known as RPA. RPA is different from business process automation (BPA) in the banking industry. BPA is an automation strategy that involves optimization of processes, process modelling, and integrations, among others. But RPA is more of automating repetitive tasks that mimic human behaviour to complete tasks.
What is RPA and How does it work?
RPA is an enterprise automation technology in which attended and unattended bots are used to execute repetitive tasks by augmenting human behavior. Robotic process automation can perform simple to complex tasks across all departments within the organizations. Examples include data entry/data processing, payroll processing, hiring and onboarding employees, inventory management, help desk, customer operations, and a lot more. RPA has been in existence for over four decades but has found its sweet spot in the 2000s, and it has become even more popular post the pandemic.
What is robotic process automation in banking?
When it comes to back-end processes, banks are on the heavy side. As the processes are more to do with figures and crucial data, any slip-ups could prove highly risky.
Robotic process automation helps banks automate all such simple, rule-based or repetitive and back-end tasks. For instance data entry and customer service tasks like updating customer information, answering their basic questions, etc. RPA augments human behaviour and performs actions without human intervention. Automating such manual tasks can significantly increase productivity and streamline operations.
Why do banks need RPA?
Banking is one such industry that is plagued with critical and complex processes, where majority are repetitive. In the post-COVID world, where digital consumers are on the rise, banking institutions are forced to innovate and ramp up their workflows and processes with new technologies to give their customers an omnichannel experience across all channels – mobile, social media, email, etc. And the best fit here is robotic process automation.
Power of automation in banking
RPA has been used by many financial institutions across the globe to improve efficiency and reduce costs. It has proven to be one of the most effective ways to enhance operational performance. Here are some key benefits of using RPA in banking:
1. Cost-savings
RPA is an cost-effective solution for banking. Approximately, RPA can help save 25-50% of the overall. In a report titled “Rise of the robots” by KPMG states that “In the next 15 years, it’s likely that 45-75 percent of offshore jobs in the financial services sector will be performed by robots… …translating into 75 percent of cost savings for firms.”
2. Enhanced customer experience
As RPA empowers banks automate processes or frequently asked queries such as bank balance, account information, loan information, the turnaround time is significantly reduced which increases customer satisfaction.
Banks use RPA to help customers access services quickly and efficiently. This improves customer satisfaction and retention rates.
3. Increased productivity
As RPA automates end-to-end workflows, users don’t have to spend time and efforts in basic tasks.
4. Faster time to market
RPA enables easy integration with legacy applications and existing architecture, which means you can start using it right away.
5. Better risk management
Risk management is one of the most important factors to consider, especially in banking. The good news is that RPA can help reduce risks in operations. RPA can reduce errors, help organizations stay compliant with regulations, empower them to make better decisions; RPA can keep the systems and the customers’ data safe and secure.
What Is The Impact Of Robotic Process Automation In Banking?
According to Grand View Research, comparing the global RPA market share by application, the BFSI sector contributed a 29% share of the revenue. This can be attributed to the fact that the banking industry is replete with repetitive tasks. However, RPA does come in many shapes and sizes.
Traditional RPA serves only as a starting point for an enterprise’s automation strategy. As opposed to attended bots waiting on the wing, there are cognitive bots that can give end-to-end complex processes a facelift. Once the stakeholders get through the change and realize what can be achieved, advanced technologies like AI, OCR, and Analytics can be integrated into the core operations.
Watch Webinar: Traditional RPA is Dead: Cognitive RPA is the Future
RPA Use Cases In Banking
RPA automates both front-end and back-office processes, such as account opening, loan applications, credit card applications, and the list just doesn’t end here! Banks can enjoy a plethora of benefits that RPA has the potential to offer. Let’s look at them through some use cases.
1. Power Up Customer Onboarding
This is the first step to a strong relationship with your customer. Talk about first impressions! Onboarding tasks such as KYC or ID verification can be automated by RPA. After onboarding, whenever a customer writes to the support team, the bots can read the emails and route them to the respective department, whether it is a loan application, queries about account, request for credit card, loan processing, or it could be anything. According to a survey done by Refinitiv, the average onboarding time is 30 days. If you want to automate the process, switching to online forms doesn’t cut it. There’s still a human behind the online forms verifying and mapping the data to another spreadsheet. Integrating technologies like Doc AI, the document data is extracted automatically and the bot can feed the data into the CRM system. Relieve your workforce from a ton of back-office processes and let them make real connections with your customers.
2. Compliance
According to Forbes, US, APAC, Europe, and Middle Eastern regulators imposed around $26 billion against charges and violations concerning KYC and anti-money laundering. Banks need to know every detail before approving a customer; no errors can be entertained here. Software robots can replace the countless number of hours that go into compliance with error-free and help to enforce preventive measures like not missing a deadline.
3. Enhanced Customer Service
For any of these activities mentioned in the article, customers are going to write to you to get things done. The bots can reduce the wait times on response drastically. At service desks, bots can work alongside your front desk staff. While they interact with your customers, the bots that are triggered by the staff will get the customer details or perform the action that would otherwise rob precious face time with your customers. It also helps in realizing a touchless customer service necessitated by the pandemic.
4. Loan Processing
With the pandemic, banks have seen an influx of loan applications triggered by government assistance programs. There are only so many keystrokes a human can hit against a bot that works 24/7. Let’s look at the repetitive task in the process.
- Data entry
- Document routing
- Task assignments
- Sending emails
All of these can be automated at the drop of the hat with RPA. Not only will these activities be executed at high speed, but the chances of failure are almost nil. This, in turn, enables banks to process and disperse more loans. Blue Prism’s intelligent automation program enabled a UK bank to approve 30,000 loans in just the first weekend! With business process management platforms like Appian, RPA can be integrated into the workflow streamlining and lending visibility into the process.
Report Generation
Integrating business analytics dashboards like Power BI completes the circle. Analytics dashboards extract and transform business data into powerful, actionable insights. You get visibility on:
- Data from high-level KPIs to low-level transactions
- Bot utilization
- Whether the process needs more bots
- Is it possible to automate more processes with existing bots?
Automation is the need of the hour for banks. By embracing cognitive RPA and hyperautomation, it’s time to unleash a breed of bank staff equipped for evolved thinking.
Conclusion
The future of robotic process automation in banking looks bright. Thanks, to the advent of technologies like hyperautomation that has made it easier to deploy and launch RPA at a rapid pace. As consumers get more inclined towards embracing the digital world’s offerings, banks are in constant need of upgrading their technology, and RPA is the right start.
