How Robotic Process Automation Changes the Face of Banking and Financial Services

The Banking industry is the life blood of today’s rising world economy, which has inevitably had an influence of technology. This takes us to the next wave of technology – Robotic Process Automation in the banking industry. Robotic Process Automation, as the name suggests, is software that automatically mimics human actions in a sequence of steps. It has the ability to perform work based on rules and repeatable tasks such as maintaining transaction records and calculations which previously were performed by humans. Using Robotic Process Automation in financial services is cost effective and reduces the turnaround time of processing from days to hours and even minutes. In this article we will learn about how robotics in banking industry functions, the benefits of Robotic Process Automation in the banking sector, the role of robotics in banking operation and Robotic Process Automation risks.

Robotic Process Automation in the Banking Industry

Robotics in investment banking uses Robotic Process Automation tools that can be automated and build an automation platform to support operations in the front office, back office and in any Robotic Process Automation companies. Robotic Process Automation basically works as a virtual workforce that is based on rules set by the company to connect with its systems. The main functions of the RPA tools are to interact with other systems through the method of screen scraping, it is able to make decisions and have an interface to automatically run a program. Robotic Process Automation tools have the following advantages –

1. RPA can integrate with the current installed applications in the banks with no requirement for a core new change in the IT infrastructure.
2. The staff is not required to have any knowledge of coding.
3. Takes less than a week to install and update process in the banks.
4. Each staff in the bank can be trained to maintain their own RPA’s.
5. The tool can accurately run 24/7.

Robotic Process Automation changes the face of financial services –

With this new and emerging technology, there are lots of benefits that the banking industry can look forward to. Some of these include –

• Efficient Staff:

Banking industry deals with a number of queries, some of them are cheque payment, enquiry on savings accounts, debit and credit card statements, loan facilities and so forth. These queries are handled by the bank staff by interacting with the customers directly face to face and then manually entering the data in ledgers or computers. For years this industry has provided the best services to their customers, but with the increase in the number of customers it has become very difficult for the staff to handle each and every query at a very short period of time. This is where Robotic Process Automation in banking sector comes handy, RPA helps to quickly settle low priority queries and provides sufficient time to the bank staff to concentrate on high priority queries. It also contributes to employee satisfaction as they no longer will have to do monotonous jobs but will be happy to engage in tasks that require human intelligence.

• Time Saving:

This is another area which helps not only the banks but also its customers because of the short waiting period. Robotic Process Automation in banking helps in reducing time for the verification process of the customers. Another advantage is that this software helps in correcting human errors which enhances customer experience and helps in maintaining a good relationship.

• Compliance:

Banks and financial industries have an enormous task when it comes to complying with the laws, rules and regulations in order to preserve the integrity and reputation of the organization. Once the compliance data is programmed in the software, Robotic Process Automation automatically adheres to the rules and reduces the compliance risks. RPA works 24/7, which increases the productivity as well as allows the bank to have an improved quality of service with very few FTE’s (Full Time Employees).

• Processing of Credit Cards:

Issuing a credit card involves tremendous work as there is a huge process in place with a lot of paper work and verification that takes place. Then there is a long wait period for the approval and arrival of the credit card. This long wait period has often led customers to cancel the request making them unhappy with the bank services. However, with the help of the set parameters in Robotic Process Automation it has become so much easier to issue a credit card. How this works is – Once the documents are submitted by the customers, the software takes just few hours to do a complete background check on the credit standing of the customer, then it validates the documents and takes a decisive action on whether the credit card can be issued or rejected. Today based on this RPA software the banks are able to keep their customers happy by speeding up the process of issuing and dispatching credit cards to their customers.

• Mortgage processing:

Mortgage plays a big part in the financial and the banking industry. With the growing demand for mortgage loans, it has become very difficult for these sectors to do a quick verification and process the loans. This is because mortgage is a process oriented industry which takes a very long time to verify details like – employment, checking credit score with the bank, property assessment and inspection. If there happens to be any minor error either from the bank or from the customer, then the process of loan will further slow down and get delayed. By adopting Robotic Process Automation (RPA), the banks can now quickly clear any obstacles, verify documents and accelerate the verification process of loans in an efficient and cost effective manner, with an improved turnaround time.

• Fraud Detection:

Fraud has always been one of the most important concerns of the banking industry. With the emergence and innovations in technology, hackers have also simultaneously grown smarter and proficient in hacking and perpetrating frauds. This adds pressure on the banks to adopt and adapt to newer technologies that are even stronger and can help them to protect their integrity. Robotic Process Automation precisely helps the banks achieve that. The algorithms programmed in RPA software constantly work by checking and identifying the patterns, and when it detects any anomalies or irregular behavior patterns then it immediately notifies the concerned department in the bank and the customer of the potential threat. This fraud detection helps the banks to handle the incident in a systematic manner which in turn helps in retaining their loyal customers, plus it helps in building trust.

• KYC Process:

In every bank, KYC or Know Your Customer or as it is commonly known, is one of the most critical and extensive procedures because the process involves a huge number of FTE’s (Full Time Employees) to work at verifying the identity and address of the customers. In addition to this, KYC helps the bank to ensure that their services are not misused. Hence, with the support of Robotic Process Automation, banks are able to reduce the cost, the resources involved with this procedure and with minimal errors they are able to complete the process in a brief period of time.

Robotic Process Automation Risks

There are three major Robotic Process Automation risks to the banking industry, they are as follows-

I. Operational Risks:

This is a big challenge to the banking industry because the staff working at the bank may feel threatened just by the thought of a robot doing their job. They may perceive that their jobs are at risk, when in reality Robotic Process Automation only reduces the monotonous jobs that they have been doing and will give them an opportunity to engage in other activities wherein they can use their intelligence.

II. Compliance Risks:

Like any human worker, even the Robotic Process Automation requires discipline and an accurate audit trail to run a stress free process. If the robotic tasks are not tracked on a daily basis or they are not built to adhere to strict compliance process, then it could lead to major compliances issues and disaster for the entire bank. The RPA’s only complement the work done by the humans and the final decision needs to be taken by a human, not the bots.

III. Data Quality Risks:

Robotic Process Automation has the ability to reduce human errors; however, the risk comes in when the initial data that is loaded onto the software is in bad order. The software on receiving the data will only automatically transcribe that bad data from the spreadsheet to the system which will then lead to a bad quality data and ultimately the entire data will have to be pulled down and cleaned.

So, now is the right time for the banking and the financial industries to embrace the next wave of robotics. Adopting Robotic Process Automation is the best path towards achieving excellence in the banking industry. Remember, Robotic Process Automation (RPA) is the future, it is our tomorrow and the sooner we adopt it, the better we will be able to catch up with the latest technology.