10 Ways How Robotic Process Automation Is Transforming The Banking Industry


If that loan was granted early, or your cheque cleared faster than ever, don’t count your stars. It’s the advantage of RPA in banking adopted by your bank.

The BFSI industry is adopting process automation like no other sector, and the reasons are obvious: myriad regulatory and company procedures to follow or diverse financial products for a broad population.

A survey by PricewaterhouseCoopers among financial sector respondents showed about 30% were not just experimenting with Robotic process automation in banking, but were on their way to adopt it across the enterprise.

Let’s look at the various benefits it brings to your banking business:

1. Cost Savings

Financial businesses are looking to cut costs in a market where acquiring customers is a tooth-and-nail fight. Thankfully, RPA in banking comes to the rescue. The advantage it has is its applicability to various functions of the business: customer facing assistance, procedural automation, and more.

Research shows that RPA usually drives about 25-50% of savings, while improving the output metrics of applied functions. However, you have to tread a cautious line between shifting processes being worked on by your employees, to automation. It’s wise to have a digitally-skilled and relevant workforce as well.

2. Expedited Standard Operating Procedures

Robotic Process Automation is essentially software that mimics human behavior, and combines the step into a workflow, executing it faster than a human could, with far greater accuracy. Banks play a very important role as established institutions, having a play in influencing the economy as well. If the banks became more efficient, look at the direct and ripple effects it could create – faster customer query resolution, better prediction of defaulters and so on.

Robotic Process Automation in banking involves a comprehensive setup, including a centre of excellence to train resources controlling the systems, training them, establishing rules of governance etc. But once that is set, research says it leads to 40-60% savings in the first year itself.

3. Increased Business Agility

Technology was meant to make organizations more flexible and nimble, being ever more prepared to face unpredictable market fluctuations. Well, RPA is its biggest manifestation. By automating critical processes that were executed on a repetitive basis by your associates, you have now delivered multiple advantages.

By freeing up associate bandwidth, they can focus on complicated tasks that require human reasoning. Further, rather than a sales executive entering leads after a day of calling, RPA for sales automation can take that on. That gives her time now think of innovative strategies to offer loans to her prospects. This keeps the company on a path of agility, spending adequate resource to grow the business, and ready to tackle any unexpected shifts in the financial industry.

4. Leveraging Legacy Data To Generate Faster Output

Technology like RPA allows you to leverage the old and the new, as companies focus on increasing their digital mandate in the industry that is shaking off its clunky tag, and moving towards a more efficiency.

Robotic process automation in banking is improving the way the business leverages legacy data from existing systems, and combines it with data being churned out by itself to help learnings lead to better and more desirable output. They leverage the power of AI and analytics to learn through assimilation of big data available, establishing bridges between processes.

5. Reducing Turnaround Times

Banks like RBS are already incorporating RPA into their operations significantly. KPMG, through its research and RPA expertise, says clients will be able to save costs by 75%, while retaining the quality of output. ICICI bank uses RPA in banking to execute one million backend transactions every day, bringing down the response time of queries by 60%.

The numbers show the kind of disruption being brought about, as customers are being delighted with prompt responses and increased quality of service. The BFSI sector is going to adopt process automation at a CAGR of 65%.

6. Immense Possibilities By Adding New Technologies To The Mix

RPA 101 was about manual scripting of the rules into the software. It replicated the flow an employee worked on – verify balance on Screen A, check credit score on App 2, then decline or approve based on the values. Whenever there was an update to the rules, it had to be manually integrated again.

Although this is still prevalent, enterprises are already looking to version 2.0 of RPA in the banking sector, where machine learning and social listening can help configure updates autonomously.

Softbank developed Pepper, a robot that can recognize customers as well as their mood, and interact accordingly. It is a great tool for customer-facing processes.

7. More Attention To Customers, Chance For Intelligent Decisioning

Onboarding RPA tools into your business can be a sensitive issue, as you need to schedule how employees whose work is being automated, can be retrained or upskilled into low-risk roles, or how you would need to handle their exits.

But for the ones who will be manning the same roles, controlling the RPA in banking operations, it gives an opportunity for them to focus on those pending cases that needed deeper insights and judgement to take it towards resolution.

While this suggests how human capital will be devoted to higher-level reasoning roles, high-risk roles for those in routine processes will have to find ways to stay relevant.

8. Faster, Accurate Investment

Banking involves investment and stock broking divisions, which require up-to-date quotes on the performance of various stocks, predicted market fluctuations. Specialist investment and institutional investment partner vendors for RPA in banking are serving a number of investors without a hiccup.

KPMG says these robo-advisors will gain in their understanding, and by 2020 will manage around $2.2 trillion of funds in the US.

The global RPA market is worth around $125.2 million now, and has the potential to add $8.75 billion by 2024. That’s a quantum leap, and shows the advancement of these solutions to help deliver growth through a bank’s operations.

9. New Cognitive, AI Powered RPA

Cognitive computing is the ability to comprehend the meaning or intent behind the transactions occurring, with RPA in banking showing how it can be done. They can understand the language in the data, go deep into the CMS, extract data and more, according to Vincent Kasten, partner for cognitive solutions at IBM.

Or when any new platform like the voice-based home speakers become mainstream, they can interact there as well. When the entire technology portfolio is empowered by Big Data Analytics and AI, RPA can self-learn and improve over time.

10. Pan-Enterprise Applicability

Businesses are looking to optimize various functions, not just critical processes. For RPA in banking, it could be in loan processing, wealth management, stock investment or even strategic business planning.

Since process automation through either desktop automation or customer engagement optimization is essentially coding the steps into the software that will execute the task just like a human does, businesses can take advantage of this, experiment the feasibility of execution and get started.

With the complexity of financial businesses increasing, there is a need for the whole organization to balance out resources that are dedicated to the tasks on hand.

While your employees should eventually be the best they are in the industry with sophisticated activities that can be resolved only with the genius of human intelligence, other processes in sectors like finance that are repetitive in nature can now be traded to RPA in banking tools.

Start looking for solutions that suit your core business goals, and incorporate them across your enterprise.

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