Evaluating the Importance of RPA Services in Banking and Finance – Top 9 Use Cases

Evaluating the Importance of RPA Services in Banking and Finance – Top 9 Use Cases

Written by Moli Mishra, In Artificial Intelligence, Published On
March 23, 2023
, 365 Views

The banking and finance industry has quickly adopted new technologies like Artificial Intelligence and Robotic Process Automation. Nearly 80% of banks are aware of the potential benefits, ranging from faster, secure to more reliable services. As a result, the sector has scaled its investments for cutting-edge technologies to keep up with the increasing competition from digital banking and e-transaction solutions.

Therefore, leveraging RPA services empowered the institutions to offer quick and efficient end-to-end banking solutions, aligning with evolving customer preferences. But market experts believe the transition accelerated only after the global pandemic induced a year-long lockdown, making digital banking the only option for owners, employees, and customers. 

RPA Services in Banking – The Dawn of a New Era

RPA Services in Banking

The global RPA market size was valued at US$ 10.01 billion in 2022 and is expected to grow at a CAGR of 20.3% from 2023 to 2030. The banking, finance, and insurance sector take most of the credit owing to the rising demand for generating reports and invoices faster and streamlining day-to-day work. 

This entire sector presents unlimited opportunities to unlock the immense potential of RPA services. From updating customer details to performing KYC on new users, processing documents and loans, opening new accounts, and completing transactions on time are a few examples of automation playing a significant role. Much of these workflows comprise recurring mundane tasks that use a lot of manpower and productive hours. This is probably one of the basic use cases where RPA as a service can make a difference. 

Furthermore, RPA is known to have significantly reduced many back-office tasks for bankers that formerly impaired their productivity and efficiency. With a technology stack of RPA services, financial institutions were able to reduce the need for excessive manpower and associated expenses. The software bots have significantly impacted performance and efficiency levels, staffing concerns and costs, security issues, and compliance concerns. To testify to the statement, we have data from market analysts which say that RPA can easily save up to 25,000 hours per year and $878,000.

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That being said, let’s dive deeper into RPA services and their importance in banking.

RPA Services in Banking – Definition and Benefits

Anti-money laundering or AML in banking involves the execution of transactions that eventually convert illegally obtained money into legal assets. And investigating a single AML process usually consumes approximately 30 to 40 minutes. Moreover, it involves multiple recurring and rule-based tasks; hence, implementing RPA services here could easily result in a maximum reduction in turnaround time. 

This is a unique example of how Robotic Process Automation helps the banking sector. 

RPA services automate time-consuming tasks and back-end data entry workflows in banks, allowing employees to focus more on improving customer relations.

And the benefits are numerous, namely:

  • It reduces loan processing costs
  • It reduces IT and operational costs
  • It reduces loan processing time for banks and borrowers
  • It automates repetitive and recurring tasks
  • It auto-generates financial reports
  • It accelerates customer verification for customer onboarding
  • It eliminates data transcription errors
  • It speeds up new account opening requests
  • It elevates customer relations
  • It enhances employee productivity and efficiency
  • It automates data extraction and processing
  • It ensures higher returns and savings for businesses
  • It enables employees to hit accuracy goals with consistency
  • It improves extracted data quality

Top Use Cases for Banking RPA

RPA Services in Banking

The primary objectives for businesses to consider automation investment are to optimize their resources, time, and budget efficiently, so banking services are delivered to end users as per their preferences. And clearly, customers want faster and quality solutions from the comforts of their homes. Hence, digital banking is the way forward, but not with legacy banking systems. This is where cutting-edge technologies like Robotic Process Automation play a significant role.

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RPA bots are focused on freeing up human resources in banking so they can work more on critical tasks. This, in turn, raises employee morale and reduces the turnover rate. That being said, RPA services have numerous use cases in the banking sector, helping the segment to achieve the above-mentioned objectives of scaling efficiency, productivity, and quality of services. 

Customer Service

Banks receive multiple customer queries daily, from account information to application status, balance information, and many more. Customer care executives are often overburdened when handling such queries while fetching data and, at the same time, resolving issues. The whole process can be accelerated and streamlined with Robotic Process Automation services.

Compliance

The banking system is closely governed as it is integral to a country’s economy. As a result, there are strict regulations and guidelines for compliance adherence. RPA is the key enabler in addressing concerns and improving the quality of compliance processes.

Accounts Payable

Accounts payable is a tedious process in the banking system, requiring vendor-related information extraction, validation, and payment processing. RPA tools and their extended capabilities, like OCR, can read and extract such insights from the digitized forms and update them in the centralized system. Then, the bots are used to validate the information further and process the payment. Finally, in case of errors, the bots notify executives for resolution.

Credit Card and Loan Processing

Processing credit card applications and loans, such as mortgages, typically takes a few weeks, increasing customer dissatisfaction. With RPA services, banks can now complete the whole task in a few hours or even minutes. The software bots are programmed to check multiple systems simultaneously, verify customer details, including background checks and credit scores, and decide whether to approve or reject applications.

KYC Process

Know Your Customer is a mandatory process in every banking system. Validating customer details is the first step before processing a loan or opening an account. This process is time and labor-intensive, notwithstanding the fact that many banks spend up to $500 million on compliance with KYC. But with RPA, the process is executed in lesser time, with minimal cost and staff. 

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Fraud Detection

Digital banking has indeed met the convenient banking preferences of customers but has raised concerns for bankers due to increasing cyber thefts. It is often impossible to track down cyber miscreants or flag fraudulent transactions. But RPA tools can easily detect transaction anomalies, alert authorities by flagging dubious transaction patterns in real time, and block suspicious accounts.

Cash Collection and Deposits

Cash collection and deposits from multiple PoS and then transferring to different branches accurately is not easy. And it involves proper maintenance of data records, which is time and effort-intensive while being vulnerable to errors. So this is another use case where RPA can easily step in and take over, ensuring the efficiency and security of operations.

Account Closure

Banks usually get more than a handful of account closure requests every month. With RPA services, bank employees can easily track such accounts, send automated notifications, and schedule calls for the required document submissions. 

Report Generation

Banks have to prepare various reports on performance and present them to their stakeholders. Misrepresenting data in reports can lead to many challenges for various reasons. With RPA tools, data is easily consolidated from multiple sources and presented in different formats and creating reports without errors and with minimum time

The Final Takeaway

RPA services have a far-reaching impact on the banking system and the financial industry. The above-mentioned benefits and use cases shed light on the growing importance of automation and other intelligent digital solutions to improve services and match customer preferences. For RPA and other innovative technologies, banks and financial institutions offer a broader scope for application.

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