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Robotic Process Automation in Banking

Using RPA in the banking industry is primarily intended for automating repetitive tasks. With robotic process automation (RPA), banks can engage their customers in real-time and use bots to their advantage. The banking industry has spent more than $321 billion on compliance and fines over the last decade. Nearly $270 billion is spent each year by banks on compliance operations alone. Increased operating expenses, along with regulatory fines and strict regulations, slow down processes and affect customer experience.

Automating processes through RPA can assist banks in reducing manual tasks, offering better compliance, mitigating risk, and improved customer service. Additionally, robotic process automation is especially appropriate for banks because it does not require additional infrastructure and can be used easily by non-technical personnel as well.

Robotic Process Automation in banking services allows for increased efficiency by performing repetitive tasks without sacrificing their headcounts.

RPA in Banking

Benefits of RPA in Banking

There are several advantages to include RPA in the banking area. It is always advisable for banks to partner with leading RPA service providers to avoid difficulties affecting the RPA. By working with  RPA service providers, banks can ensure that the implementation of RPA is smooth and hassle-free. Also, this helps to reduce costs and effort.

Other benefits of using RPA in a bank:

  • Development of Customer Level Agreements (SLAs)
  • Acceleration of Performance
  • Enhancement of Customer Trust
  • Increment in Income and Cash Flow
  • Reduction in Process timing
  • Client turnover reduced
  • Improvement of Customer Experience
  • Reduction in Business Response Timing
  • High Compliance

Potential Automation Use Cases in Banking 

Below are some RPA Use-Cases in Banking:

There is a huge scope of automation in the banking industry. Below is a list of some of the most common RPA use cases for banking.

1. Customer service : Banks have to deal with countless customer queries ranging from account investigations to fraudulent activities or loan inquiries. It can be very difficult for a customer service team to deal with queries every day in the shortest possible time. With RPA in place, banks can ensure that simple queries can be handled by bots, helping the customer service team to focus on more important questions that need human discretion.

In addition, the RPA helps reduce the time taken for customer verification, provides them with various information from various sources, and submits them quickly. These reduced waiting times and simple adjustments have helped banks to improve their customer relationships as well.

2. Compliance : Compliance with so many regulations can be a difficult and time-taking task for banks. The RPA simplifies compliance for banks. An Accenture survey conducted in 2016 revealed that 73% of compliance officers believe that RPA will have a significant impact on compliance in the next three years. In addition to increasing productivity by eliminating monotonous tasks and engaging employees in tasks requiring human intelligence, RPA helps improve compliance by reducing expensive FTEs and increasing the quality of compliance process.

3.Credit card processing : The confirmation and approval of the credit card application take weeks to last. Due to extended waiting times, there has been an increase in customer dissatisfaction which often even leads to the withdrawal of applications. However, with the help of the RPA, banks now have the power to speed up the verification, approval, and issuance of credit cards exponentially. RPA programming requires a couple of hours to finish the whole cycle of collecting customer documents, setting up a credit check, and making decisions based on the criteria for approving or rejecting a credit card application.

4. KYC (Know your customer) : KYC is one of the most effective cases of RPA in the Banking industry. According to Thomson Reuters, most banks spend an estimated $ 384 million annually in tracking KYC. In light of the enormous expenses related to the KYC process, banks are increasingly going to RPA to compile customer data, test it and validate it. RPA in banking helps banks to finalize the process in the short term with minor errors and employees.

5. Anti-money laundering (AML) and fraud detection : Fraudulent transactions have been one of the major concerns of banks, and due to the increase in technology, such cases have grown exponentially. As a result, it is becoming increasingly difficult for banks to monitor all transactions manually and identify fraudulent patterns.

The ‘if’ then the method is used to determine potential fraud and raise the flag. For example: if most transactions are made quickly, the RPA identifies it as a risk and highlights the need for further investigation.

6. Mortgage processing : For any bank, lending is one of the most important service areas. RPA automation is especially suitable for mortgage lending since it involves a lot of processes and is extremely time-intensive. With clearly defined rules, RPA can handle processes (and exceptions too!) effortlessly.

The RPA allows for easy automation of various mortgage-related tasks, including the initiation of loans, processing of documents, performing financial comparisons and monitoring quality. Thus, customer satisfaction is enhanced since loans can be approved more quickly.

6. Account Closure Process : A bank receives several requests for the closing of accounts on a monthly basis. A client’s accounts may also be closed if he or she fails to provide the proof required for operating the account. Since the bank has to handle a large volume of data each month and adhere to various processes, the chances of human error also increase. The bank can automatically ask customers for proof of their identity through RPA. Additionally, it can ensure zero errors by processing account closure requests within a short period of time-based on set rules.

Automation is the way to go : 

Technological advancement and innovation are endless and continue to affect almost every major industry in the world. One of the industries that have undergone radical and radical change due to new technologies is the banking industry. The banking industry has been among the first to receive and reap the benefits of technological wonders among many other industries. From money transfers to loan approvals, the technology has simplified almost every aspect of the banking sector and continues to make it more transparent and efficient. As the industry grows, it has been hit by a new wave of technology, known as Robotic Process Automation.

According to McKinsey’s research, up to 25% of banking processes are expected to be automated in the next few years. Similarly, revenue for banking software and services is expected to reach $ 900 million by 2022. These indicators place the RPA as an important ingredient in the future banking process; banks should consider how implementing the RPA strategy can be a breeze under their wings.

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