Robotic Process Automation (RPA) — an Enabler and Critical For Banks Now

According to recent reports, it has been predicted that the robotic process automation (RPA) industry will value US$2.9 billion in 2021 compared to US$250 million in 2016. While banks rapidly turn to new-age technologies for a competitive edge, they cannot overlook the potential of RPA. It plays an important role in driving efficiency, delivering a superior customer experience (CX) and increasing the ROI. The banking sector needs RPA not only to remain competitive but also for intelligent automation which can ease the burden of mundane, manually intensive, and repetitive tasks. It frees humans to engage in duties which require reasoning, emotional intelligence, and judgment and helps them focus more on strategic initiatives.

How RPA is suitable for banks?

In the present scenario, when a slow economy fosters do-more-with-less culture banks need to continuously evolve. While trying to keep pace with fast-changing customer expectations, they need to focus on optimizing costs, addressing the scarcity of skilled resources and at the same time increasing productivity. This sets the stage for RPA, which in the past has helped companies garner productivity gains by almost 30-35% by offering greater capacity and agility.

As a compliance enabler

A look at the challenges which banks face tells us they need more regulation and compliance than other industries. A Forbes prediction tells us that the banking regulatory costs will increase from 4% to 10% of their revenue by 2021. The financial institutions often have to protect sensitive customer information, report their regular activities to regulatory bodies, and ensure internal and external audits. A substantial amount of risk, cost and work are involved when banks try to adhere to regulatory compliance. RPA fits in here as it simplifies the compliance and reporting process. It can automatically generate reports from data, minimizing the chances of human error. Another advantage of RPA is that it provides a detailed audit log of activities critical for compliance readiness.

Also, anti-money laundering laws require banks to ascertain whether sources of the customers’ funds are legitimate. RPA bots can be used to conduct background and credit checks and detect frauds on every customer, efficiently, alerting officials of risks if any. It can then store the reports in a centralized repository, which helps prove compliance when required.

For improved customer experience

For banks, CX is as critical as compliance. In the present times, when fintech startups provide easy-to-use platforms and services round-the-clock, more established players such as the banking majors need to focus on improved CX. RPA can boost their CX efforts by streamlining online and mobile banking, ensuring that transactions are processed rapidly, which will result in a higher number of satisfied customers. RPA solutions today allow automated bots to reset passwords and carry out simple troubleshooting, allowing the customer problems to be resolved faster, irrespective of the glitches they are faced with.

While interacting with customers, banks often have to deal with multiple queries related to loans, accounts, frauds and often the customer service team finds it difficult to revert in lower turnaround times. Here RPA helps resolve the low priority queries through bots allowing the team to focus on issues which require human intelligence.

Other critical banking tasks which RPA helps expedite include credit card processing, account closure process, loan processing, mortgage lending, and customer on-boarding.

A few use cases

Few use cases well illustrate the benefits of implementing RPA. One of the world’s leading banks implemented RPA technology to modify the workflow. It could successfully automate 30% to 70% of operations related to loan and cash, finance and trade. Implementing the RPA solution helped the bank to reduce the time usually invested in employee training. Another area where RPA helped the bank is that it automated the monotonous work and employees could concentrate on tasks with higher priority and importance.

In other use cases, a Singapore-based bank reduced the time to re-price loans from forty-five minutes to one minute and a Japanese financial institution brought down the manual working hours by one lakh sixty-six days annually.

The way forward

In the event of the pandemic, customer access to banks has been impaired. While banks are already restructuring their operations to address the challenges, they will need to act within a four-month timeframe to survive the lull. Actions that banks are taking include boosting the capacity for online access, rolling out omni-channel apps for customers and their ease-of-use and allowing outbound messaging on queries related to remote access. Here the use of RPA will play a critical role. Not only will it scale process capacity but also prevent service disruption by helping deliver consistently at low costs and supporting remote working.