RPA in Banking

The banking industry is a highly competitive space. It is highly cost-sensitive and always looking for an area to slim down to increase profitability. Similar to many other industries, banking processes are also highly dependent on paper, document and management. There is paper involved when a new customer is seeking a loan, signing up for any service or even opening an account. Even if now these forms are online, many documents and formalities are still on paper.

Robotic process automation is a fast emerging technology to improve productivity and turnaround time by automating the manual processes with the help of software robots. Automation provides an opportunity that every industry especially banking was looking to squeeze the cost with improved productivity. Thus making banking the most potential industry for RPA.

With the high number of customers, banking systems are generally using multiple legacy systems to manage customer database and product information. Unlike other forms of automation, RPA can work across multiple legacy systems and can retrieve information in one place. In the case of mergers and acquisitions, banks need to work with multiple legacy systems increasing the number of administrations to manage them. With automation, banks can make these systems work together seamlessly eliminating manual dependency and errors. With so many documents, the process execution time can be slow and increases the chance of errors, wait time for approvals or documents getting misfiled. By automating such tasks in back offices, the information will always be accurate and every document can be tracked.

Use Cases

There has been a lot of records and documents in the banking industry in the lifecycle of a customer. Right from the initial application to open and account, withdrawals, deposits, loan documents and a hell lot of day to day transactions that without option creates documents.

Until RPA was introduced, banking professionals struggled to work with multiple legacy systems and manage data to do their job. One of the greatest benefits of RPA is that it can work with the different legacy systems to read data and directly connecting them to work together. With one click, data from multiple legacy systems can be brought together to create a report.

Another area where RPA is boon for the banking industry is Compliance. The banking industry is highly regulated and monitored to be compliant. Because RPA can handle all the documents and track all the transactions in multiple systems, audits become much less cumbersome. With increased efficiency and speed of execution, it is easy to stay compliant.

With the voluminous data banking professionals deal every day, banks across the globe are advocating RPA to minimize manual errors and human efforts. The turnaround time can be reduced from days to minutes reducing process execution time by a considerable amount of time. Several mundane tasks across the banks can be automated, relieving teams to focus on more critical tasks and growing business.

Top 10 processes to automate in banks

Customer service

Banks deal with multiple queries from the customers ranging from fraud to lost cards, loan queries or information, and so many. It becomes difficult for the customer service team to address them instantly, affecting customer satisfaction. RPA can help in resolving the low priority and repetitive queries like account information, loan application status to free up the team to focus on critical queries.

RPA will also help in reducing the turnaround time to verify the details and onboard the customers reducing the wait time and improving customer satisfaction.

Compliance

With so many compliance and regulations, it is difficult for banks to comply with all. According to the survey by Accenture in 2016, 73% of the respondent believed that RPA can be a key enabler in compliance within the next three years. RPA makes it easier to adhere to the rules. RPA helps in increasing productivity with zero errors and 24/7 availability with fewer FTEs. RPA also improves the quality of the process and employee satisfaction by eliminating monotonous tasks.

Accounts Payable

Accounts payable is a very monotonous process that requires digitalizing vendor invoices, validating information and then processing it. RPA with optical character recognition (OCR) can help this process automate completely. OCR can read the information from the manual invoices converting them into digital invoices. RPA then can validate the information and process the vendor payment. On validation error, a query can be raised to the human executives to process.

Credit Card Processing

Earlier, it took weeks to validate the customer information and approve the credit card application. This time taking process also demotivated the customer resulting in canceling the application. However, with the help of RPA, banks are now processing the application within a few hours. With the help of RPA, customer information can be validated automatically from multiple systems generating applicants’ credit scores.

Mortgage Processing

Mortgage processing usually takes 50 to 53 days as it goes through stringent scrutiny checks like credit checks, employment verification, existing loan and so on. Minor errors from the applicant or the bank can slow down the process resulting in delay. RPA, on the other hand, can accelerate the various checks simultaneously reducing the processing time with minimal errors.

Fraud Detection

With the increased technology adoption, the number of frauds has also multiplied. Thus making it difficult for banks to check every transaction and identify the fraud patterns.

RPA, on the other hand, can check every transaction and provide the level of security on transactions. RPA can detect the pattern and notify the fraud instance to the team. This will improve the detection rate giving time for the team to react. It can also help stop the fraud by canceling the transaction or blocking the account in certain cases. RPA with the help of machine learning can learn the fraud patterns and detect them in real-time to prevent it.

KYC Process

Know Your Customer (KYC) is a mandatory compliance for every bank. The process is crucial and it involves at least 150 to 1000+ FTEs to perform checks in the customer. According to Thomson Reuters, banks spend around $384 million per year on KYC compliance. Considering the cost to collect the customer information, validate it, banks have started using RPA. RPA can complete the process in a much shorter time reducing the overall process time and manual intervention.

General Ledger

Banks have to keep their general ledger updated with all the required information such as financial statements, assets, liabilities, revenue and expenses which then will be available to the public, media and other stakeholders to access. Considering the amount of data with the bank and multiple systems, it is a tedious job to fetch data from all the systems to create a statement. Here RPA comes to rescue. RPA can help extract all the information fro all the systems without manual intervention and zero errors to create a perfect financial statement. This information can be updated frequently with RPA.

Report Automation

It is mandatory for the banks to prepare reports of various processes and present it to their board and other stakeholders to show performance. Considering the importance of these reports, it is important to ensure that there are no errors.

While there are some FinTech systems to provide data and template for the report, banks require accurate data from their systems. RPA can help banks to automate this process by accessing the required data and filling the report template making it an accurate process.

Account Closure Process

Where there are many wins, there are few losses too. Banks receive a lot of requests to close the accounts on a monthly basis. Considering the huge data, there is a lot of scope for error and fraud while closing the account. The account closure process has a few checklists to perform. RPA can check for the available information and notify the customer to update the missing information. It can also help close the account on the perfect checklist.

Conclusion

With unending advantages, the bank should consider RPA in all their functional areas to enhance customer service and getting and get an edge over the competition. RPA seems to be a big investment initially but it’ll definitely give a return in a short period of time.

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