7 Incredible Ways RPA Can Contribute to Banking Industry


RPA in banking

Robotic Process Automation or RPA (as one would call it) has transformed many business processes across various industries. RPA is primarily designed to automate time-consuming and labor-intensive repetitive tasks to ease the workload of employees. It functions on structured data similar to humans to communicate with other system applications.  

But it would be quite an understatement to say that it merely helped in the usual routine tasks. Implementation of RPA services in legacy processes as well as across various desktop applications has improved productivity, and reduced costs in resources while increasing profit, enhancing customer satisfaction as well as setting up a high benchmark in terms of accuracy.  

As per reports, in 2017, only 10% of banks had adopted RPA. This number grew to 20% in 2018 and reached 30% in 2019, and there is no looking back since then. The banking sector has been slow to adopt RPA compared to other sectors such as healthcare and manufacturing. However, the rate of adoption is increasing as banks are beginning to realize the benefits of RPA.

What Reports Say About RPA Adoption by Banking Industry?

According to a 2017 report by Boston Consulting Group, only 4 percent of banks worldwide had adopted RPA at that time. However, the study found that those who had adopted RPA were seeing significant benefits, including reduced costs and improved efficiency. The report predicted that the adoption of RPA by banks would increase significantly in the coming years.

In a study done by McKinsey, it was found that the banking sector has been the second-fastest adopter of RPA after the insurance sector. 20 percent of respondents said that they had deployed RPA at scale or were in the process of doing so. Of those who had not yet adopted RPA, 60 percent said they would do so within three years. The study also found that RPA has had a positive impact on banks’ performance, with 70 percent of those surveyed saying that RPA had delivered positive results or had the potential to do so.

There has been a significant impact of Robotic Process Automation on a number of companies’ operations providing them with a competitive edge in this ever-evolving digital economy.  Adoption of RPA services in banking observed many positive changes like reducing the workload on employees, less time taken to execute manual activities, and lowering costs on resources. As AI technology gains more traction in digital solutions, RPA implementation is currently recognized as a worthwhile investment for banks and financial industries. 

According to an industry report, it is estimated that the global Robotic Process Automation (RPA) market is predicted to grow by USD 25.66 billion by 2027, expanding at a compound growth of 40.6% while in the banking and finance industry the growth is likely to take a hike of 40.1% in the forecast period. 

Do you know the impact of RPA on various industries?

RPA in banking
Image source: Grandviewresearch.com

What is RPA in Banking? 

In banking, robotic automation processes combined with Artificial Intelligence (AI) automate human functions, such as data entry and basic customer service interactions. It is basically the process of adopting robotic process automation software like UiPath, or Blue Prism into their existing digital infrastructure, or by deploying AI artificial intelligence workforce to help manage banking tasks that are repetitive. The implementation of RPA has transformed banking by managing back-end jobs with better efficiency without having to make any changes in the current operating systems. 

While RPA-enabled banks have more time for employees to focus on more crucial tasks, AI technology accomplishes back-end operations with better ease and higher efficiency. According to Grandview research, it was observed that Banking, Financial Services, and Insurance are the fastest growing industries to implement RPA solutions. 

Let us now move further to read about how the implementation of RPA can significantly contribute to the banking industry.   

7 incredible Ways RPA Can Contribute to the Banking Industry 

Banks have to deal with hundreds of processes every day. With the increasing adoption of RPA, many manual processes that were done by humans earlier are now being managed by intelligent software bots. The use of RPA has significantly reduced the workload of the human workforce so they can concentrate on more complex banking operations work, human interaction, and decision-making. As a matter of fact, by reducing repetitive manual tasks, data reconciliation, and transcription, robotic process automation in banking can reduce labor costs by up to 70%. 

The top 7 fields in banking processes where automation can make significant contributions 

  1. Customer Service

Banks deal with huge volumes of customer queries coming in every day. These questions range from account opening to fraud detection, and loan requests. Customer care executives often get overwhelmed, especially when there are a high number of inbound inquiries. This leads to long waiting periods and can lead to customer dissatisfaction. RPA effectively handles low-priority queries, which allows the customer service team to concentrate on matters that require human intelligence. 

  1. Compliance

Central banks, government agencies, and other parties issue a lot of rules on banks. It often gets difficult for banking staff to function by complying with each and every law. The implementation of RPA services can help employees to comply with the regulations better and more efficiently. RPA can remain working 24/7 and can easily scan through transactions faster to spot any compliance gaps or other inconsistencies. 

  1. Accounts Payable

Having to deal with payable accounts is a time-consuming process. Among the tasks involved in this project is digitizing invoices from vendors and verifying the data in each field before processing. By automating these processes, including the use of Optical Character Recognition (OCR), Intelligent Automation can automatically detect errors and credit payments after validating data and rectifying errors. 

  1. Credit Card Processing

Earlier it would take weeks to verify customer information and finally approve a credit card application. The time taken to process these requests led to dissatisfied customers who often end up getting their applications cancelled. Now, the adoption of RPA services has enabled the banks to finish the process of validating information faster and quickly dispatching credit cards. Using RPA software, credit card applications, customer documents, customer history, etc. can be scanned in a few hours to determine whether a customer is eligible for a credit card.  

  1. Mortgage Processing

Earlier bank employees, as well as customers, would invest much of their time and effort in mortgage processes.  Most banks in the US would take up as long as 50-55 days to start and finish processing a mortgage loan. Banks had to take time to validate various information like credit checks, and employment verification before approving the loan. One small mistake by either the customer or the bank can sluggish the mortgage loan application dramatically. 

But thanks to automation, banks have been able to speed up the process by 80%. It helps clear bottlenecks through set rules, which speeds up mortgage processing.  

  1.  Fraud Detection

In recent years, fraud cases have grown due to advances in technology. It is not possible for banks to thoroughly check every transaction manually and spot fraudulent patterns.  

The RPA employs algorithms to identify fraudulent transactions, flag them, and forward them to the appropriate departments to investigate. During this time, any suspicious accounts during the investigation process will be automatically halted to prevent further illegal activity.  

  1. Report Automation

Every banking industry needs someone to prepare an elaborate report about different processes and present it to the members of the board and shareholders. Banks then have to explain their performance, the challenges they faced, the measures adopted to resolve certain issues, and the tasks executed bearing the interests of the institution. It is crucial to ensure that the financial statements are free of any errors before the presentation. RPA can simplify data management in banks, where vast volumes of data are stored. Using RPA services can assist banks to procure accurate data to prepare the reports. The program can collect information from a variety of sources and organize it in an understandable way. 

Benefits of Implementing RPA in Banks

There are many benefits of implementing RPA in banks.

One of the most important benefits is that it can help to reduce costs. RPA tools can automate tasks that are currently being done manually by employees. This can free up time for employees to focus on more important tasks, and it can also help to reduce the amount of errors that occur. RPA can also help to improve customer service. By automating tasks, banks can provide customers with a faster and more efficient service.

Why Banking Industry Should Adopt RPA?

Work in the banking industry is becoming increasingly complex, with new regulations and compliance requirements constantly being introduced. This puts pressure on banks to find ways to improve efficiency and accuracy while keeping costs down. Robotic process automation RPA can help banks to address these challenges by automating repetitive, time-consuming tasks. RPA can be used to automate a wide range of tasks, from customer onboarding to fraud detection. Banks that adopt RPA can reduce processing times, improve accuracy, and free up staff to focus on higher-value work. 

Banks have been quick to adopt RPA (Robotic Process Automation) with 71% of banks that used the RPA in some way by 2020. The banking sector is under pressure to keep up with the competition and cut costs. RPA offers a way to do both. Banks that have adopted RPA have reported increased efficiency and cost savings. Many banks are still in the early stages of adoption, but the success rate so far is encouraging.

Bottom Line

The above information narrows down the ways in which RPA robot is a viable solution for enhancing customer experience, reducing workload, and increasing productivity as well as better profits in the baking industry. By increasing automation and streamlining processes, employees will spend less time on repetitive manual work and dedicate more time on profitable projects.  

The overall success of RPA can be attributed to many factors like automation being a user-friendly system, non-invasive, flexible, and budget-friendly.  

If you are still having doubts, feel free to reach out to our experts at Webuters. We will help you understand how your business can leverage RPA services. Our solutions will assist you in integrating automation successfully in your current business processes. 

So why wait? Upgrade your business operations for better productivity and higher profits.  TODAY!