Robotic Process Automation

Implementing RPA in Banking Industry

Aravind Nallasivam | Last Updated on : January 12, 2022

RPA in Banking

Robotic Process Automation (RPA) solutions are deployed in the banking industry mainly to automate tedious and repetitive tasks. RPA bots can be used to benefit the banking sector and also to promote real-time user engagement. The automation of banking processes using RPA tools will enable banks to reduce manual workload, provide better compliance, reduce risk, and enhance customer service. In addition, robotic process automation is particularly suitable for banks as it needs no additional infrastructure and makes it easy to be handled by employees with no or less technical proficiency. When it comes to banking, Robotic process automation enables efficiency and accuracy by carrying out complex tasks without compromising their headcount. 

RPA Use Cases in Banking 

There are a plethora of use cases available where RPA can help with the digital transformation in the banking and finance sector. Here are some of the potential use cases of RPA in banking: 

Customer Service

Banks are required to handle a myriad of customer questions ranging from account inquiries to fraudulent transactions or loan-related queries. To handle questions in the shortest amount of time every day isn’t a small task the customer service team can perform. If the RPA exists, banks can ensure that bots can handle simple questions, which allows the customer service team to concentrate on more significant queries that require human actions. Besides that, RPA facilitates faster customer verification, gives them sufficient information from a variety of sources, and submits it speedily. Such shortened waiting times and flexible arrangements have allowed financial institutions to enhance their customer relations. 

Compliance

Obeying too many restrictions can be a daunting and time-consuming task for banks. Robotic Process Automation makes compliance simple for banks. According to researches, 73% of compliance officers assure that compliance with the RPA will have a striking impact over the next three years. other than enhancing productivity by removing tedious tasks and involving employees in jobs that need human intelligence, RPA helps enhance compliance by mitigating costly FTEs and improving compliance quality. 

Credit card processing

Traditional credit card application processing may take weeks to verify customer information and approve credit cards. The long wait often resulted in customer dissatisfaction and expense to the banks. With the introduction of RPA, banks are able to process the application procedures within hours. Moreover, RPA can interact with many systems at the same time to verify information such as essential documents, credit checks, and background checks and to make decisions based on the rules for approving or rejecting an application. 

Fraud detection

Fraudulent activities have become a major concern of the banking industry especially with the advent of digital systems. Monitoring all transactions is really difficult for banks to detect possible fraud activity. At the same time, RPA can monitor transactions, identify and pinpoint a possible fraudulent transaction pattern, and thus reduce delays in real-time response. In some cases, RPA is capable of blocking accounts and suspending transactions to stop fraud. 

KYC Process

KYC (Know Your Customer) is another important effective use case of RPA in the banking and finance industry. As per the survey conducted by Thomson Reuters, $ 384 million has been spent in a year on KYC tracking. Considering the huge costs associated with the KYC process, banks are increasingly relying on RPA bots to gather, test, and validate customer data. Robotic Process Automation in banking helps banks to complete the process in a minimum time period with fewer errors and staff. 

Mortgage Processing

One of the time-consuming and labor-intensive tasks for both the customers and employees in the banking sector is mortgage processing. The majority of the banks in the United States take almost 50-60 days to create and complete mortgage processing loans. Before approving a mortgage loan, the bank has to go through a lot of processes including credit verification, verification of customer’s employment status, and inspection. A minute mistake from the side of either the customer or the bank can slow down the entire process. However, the process is accelerated with the help of RPA deployment in banks. It goes pre-determined rules and clears up potential barriers, which then accelerates mortgage processing.  

General Ledger

Banks handle huge amounts of data on a daily basis, which constantly collects and updates relevant information such as income, liabilities, and expenses. Banks make use of this information to prepare annual financial statements. The resulting financial reports are evaluated by the public media and other stakeholders to analyze the operation of significant organizations to determine whether they meet the expected performance. Handling such large amounts of data and compiling financial statements without mistakes is definitely a challenging task for banks. Banks can quickly gather, update, and validate large volumes of information from multiple systems with RPA deployment. 

Report Automation

Every month banks receive account closure requests from many customers. Similarly, banks sometimes have to close the account of customers if they are unable to produce proof of payment. Robotic Process Automation helps banks to send automated reminders to customers even if they forget to present the necessary proof. RPA can queue and process account closure requests on the basis of specific rules. 

Benefits of RPA in Banking 

Now let us move on to the benefits of RPA in the banking and financial sector. Here are some major benefits of Robotic Process Automation in banking. 

Scalability 

The high scalability of RPA bots allows you to control huge volumes while busy business hours by using more bots and by giving exact responses to every situation within a very short time. In addition, the execution of RPA bots facilitates banks to release the employees from regular and tedious tasks so that they can give more attention to innovative strategies to develop their businesses. 

Improved functional efficiency

If set up properly, banks and financial institutions can carry out their operations very quickly, productively, and efficiently. Banks integrate robotic process automation for faster execution and functionality of processes. Research shows that banks will be able to save around 75% on costs while maintaining quality output. 

Cost-effectiveness

Saving the costs or expenses are as important to the banking industry as any other industry. Banks and financial institutions can save nearly half (25-50%) of the processing fee and time with the implementation of RPA. 

Agile businesses

With the emerging technology infiltration in all industries and globalization, banks are required to be more dynamic and flexible than before. Using Robotic Process Automation, banks will have the opportunity to remain equipped for any situation and respond immediately. 

Quick implementation with no coding

Most RPA tools, such as RPA Genie, make use of drag and drop technology for the automation of the process. Here, there is no requirement of coding knowledge to generate an automation workflow and hence making it simple to execute and maintain. 

Wrap Up 

Technological advancement and innovation are vast, and it continues to influence almost all major industries in the world. The banking industry is one of the industries that is undergoing radical changes due to modern technologies. The industry has been growing rapidly over the last few years, with technological advances providing faster, safer, and authentic services. In order to stay competitive in the growing saturated market – particularly as virtual banking becomes more widespread – banking institutions need to find a way to provide the best available customer experience to their users. Robotic Process Automation is the solution to all these dilemmas and to make the banking processes organized and simple. RPA has also streamlined a wide range of back-office operations that once paralyzed bank employees.  

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Aravind NallasivamSolutions architect at ClaySys Technologies.
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