RPA Use Cases in Banking
It is not a hidden fact that banking systems need to develop constantly to comply with ever-changing guidelines and customer demands. Facing tough competition in a saturated market, banks are always under pressure to keep things running smoothly.
These are some of the reasons that have led to an increase in the RPA use cases in Banking and finance.
What is RPA in Banking?
In simple words, RPA is an innovative technology that helps in the creation and training of software robots (bots) that can perform certain tasks for which they are created.
Robotic Process Automation in the banking and finance sector is focused on:
- Minimizing Errors and Time taken in repetitive tasks
- Increasing scalability and effectiveness to fully optimize the processes
RPA in the Banking World plays a key role in saving time, energy, and errors that ultimately help in the faster, more secure, and more efficient working of the banking sector.
According to several reports, the use cases of RPA in Retail Banking have been growing consistently, owing to increased digital connectivity and an increase in liquidity across markets.
In order to address the rising costs of employment, compliance issues coupled with ever-changing laws regarding financial matters, the RPA use cases in Banking have been a reasonable solution to address such problems.
RPA empowers banks to decrease human efforts, increase consistency, moderate dangers, and aid in uplifting the customer experience.
These advantages, paired with the fact that it is entirely software-based and requires almost no hardware investments, the RPA use cases in Banking have seen great adoption rates.
Where can RPA be used in the banking industry?
Since it is a software-based approach to automation, RPA can be widely used in the Banking and Finance industry. However, some processes require its use more than others and are:
Programmed and Automated Report Generation
Creating reports about suspicious and fraudulent transactions is an important part of the banking process. Banks usually employ people to review data and create reports according to the data provided and check for irregularities. However, RPA bots can easily prepare reports according to the set guidelines and expedite the process in a consistent manner.
Example: Banks are increasingly automating the report generation process and it has freed up their human resources by up to 60%.
Customer Registration Process
Customer Registration in banks is a tedious, drawn-out process, basically because of a few records requiring manual check. Robotic Process Automation in Banking can make the process a lot simpler by catching the information from the KYC records utilizing the optical person acknowledgment method (OCR). This information would then be able to be coordinated against the data given by the client in the structure.
In case there are no errors post the robotic process, the information is consequently generated and used at required places. RPA automation in client onboarding helps in staying away from manual mistakes as well as recovers a ton of human time and exertion.
Example: Bank account opening requests, filled with reduced downstream errors, and better system data quality can be done by eliminating data errors from inbound account opening request emails into the banking system.
AML and KYC Process (Anti-Money Laundering/ Know Your Customer)
The AML and KYC process usually requires the use and care of an analyst who checks for anomalies in the customer data sets and presents them in an orderly fashion.
Similarly, the KYC process also requires a person to proofread and check all the necessary documentation to proceed with further processing. Often, this is a repetitive and monotonous task.
RPA using its Artificial Intelligence Capabilities can, not check these sets of data, but also point out suspicious activities and suspected fraudulent transactions, in a quick and error-free manner.
Example: Using RPA to remove monotonous compliance tasks, helping to free up employees for work that requires reasoning and judgment — attributes robots don’t (yet) possess.
The usage of RPA in maintaining and creating records has made the usually tedious and mistake-ridden process a lot easier. RPA Robots regularly check records for possible errors and correct them according to the necessary standards.
The result is a decrease in cost, manual errors, and time taken to look after important but boring records and sheets.
Example: The Bank of Canada implemented RPA in their Record ledger systems in 2019, and registered a decline of 59% in regular entry errors and calculations.
Faster Home loan processing
The process of applying for and sanctioning a loan has remained consistent and tedious for a long, long time. Therefore, it is perfect for the RPA process. RPA innovation can be used to easily take care of the process with unmistakably characterized rules.
The RPA technology simply performs tasks vital to the home loan loaning process, including credit score checking, relating records, monetary correlations, and quality control. Thus, the sanctioning process becomes a lot easier, increasing customer satisfaction.
Example: Customer loan processing time can be reduced from thirty minutes to just ten minutes by removing the copying-and-pasting of customer information from one banking system to another.
The volume of regular client questions in banks (going from balance inquiry to general record data) is tremendous, making it hard for the staff to react to them with a low response time. RPA instruments can permit banks to robotize such commonplace, rule-based processes to viably react to inquiries continuously, in this way decreasing the time taken greatly.
Example: According to a report, public relations robots have experienced a 40% CAGR between 2019 and 2021.
Another long and drawn-out process is passport and visa applications, which commonly require a few days for approving the client data prior to supporting the Visa.
RPA can assist with making speedy choices on whether to approve/reject the application with a standard-based methodology.
Example: Through the use of RPA, there has been a marked decrease in processing times and an increase in client satisfaction during usual visa application processes, as per the Bank of Canada.
Advantages of RPA in Banking and Finance
Clearly, there is no shortage of advantages in the RPA use cases in Banking. Some important ones are:
1. Increased Versatility: The way that robots are exceptionally adaptable permits banks to oversee high volumes during peak business hours by adding more robots and reacting to any circumstance in record time. Moreover, RPA execution permits banks to put more spotlight on inventive methodologies to develop their business by liberating employees from doing ordinary errands.
2. Increased Speed: Once accurately set up, banks and monetary foundations can make their processes a lot quicker and more useful.
3. Decreased Time Taken: Because of their immensely fast processing capabilities, RPA robots in banking scenarios cut the time taken to complete cycles and processes by more than half at least, every time.
4. Decrease in Costs: Using less time and energy in completing tasks, RPA bots also help in decreasing costs of employment and customer withdrawal rates.
It becomes extremely clear at this point that the RPA use cases in banking are very important and efficient, improving satisfaction at both ends, the bank and its customers.
Once set up, it is an investment that pays off well in both short-term and long-term time frames. This is precisely the reason that companies from all parts of the world are investing in and adopting this technology.
In India, especially, RPA has seen good adoption rates and the demand for RPA Professionals is also at an all-time high.
It is, therefore, a good option for a person to become an expert in RPA, as many vacancies and jobs are available, even after the pandemic.
ImaginXP is one of the top institutions in India that provides a comprehensive program in learning RPA through UiPath, in collaboration with the best Universities in the country.