The banking industry is no stranger to technological innovation. From ATMs to mobile banking, tech has led the way customers interact with their banks.
The latest trend is robotic process automation in banking. It’s completely changing the way banks operate behind the scenes through new efficiencies. It takes work off of your employee’s plates and puts it on the shoulders of robots.
Now, I know what you’re thinking. The robots are going to take over the world. That’s just not the case here. Instead, they’re going to give you the power and bandwidth to be more strategic. And then you’ll reap the rewards of a better customer experience.
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What is robotic process automation in banking?
Let’s get started by looking at what we’re talking about with robotic process automation in banking. RPA uses software robots to automate your repetitive, rule-based tasks. These robots can mimic your human actions. And they can interact with your existing systems to perform tasks. They automate tasks like data entry, form filling, and transaction processing.
You can use RPA in banking to automate a ton of tasks for both your back- and front offices. For instance, RPA can take on customer onboarding and credit check. It can also cover fraud detection and account reconciliation.
The impact of robotic process automation in banking
Robotic process automation has had a significant impact on the banking industry. Here’s how:
Increased efficiency
Increased efficiency is one of the most significant impacts of RPA in banking. Up to now, banks have relied on manual processes to perform some seriously time-consuming tasks. Having humans do manual tasks means they’re not able to complete the more complex stuff. And humans are more likely to make errors, especially if they’re tired or bored.
RPA can help to stop these inefficiencies by automating repetitive and rule-based tasks.
Improved customer experience
RPA is also improving the customer experience in banking. By automating things like customer onboarding and account openings, you can then reduce the time it takes for customers to get service. And that provides them with a more seamless experience.
Cost savings
RPA can save you money. Like, a lot of money. For global banking, McKinsey and Co. estimates that AI technologies can potentially deliver up to $1 trillion of added value each year. That’s trillion. With a T.
By automating tasks that otherwise take time and energy to complete, you’re saving big. What’s more, in some cases, you’ll be able to replace humans as natural attrition occurs.
Regulatory compliance
Being in banking, regulatory compliance has to be at the top of your mind at all times. Non-compliance can lead to significant fines and penalties. But RPA can help you to stay compliant by automating your compliance monitoring and reporting. Plus, you can set it up to ID trends and anomalies in your data.
For example, you can use RPA to track transactions and identify suspicious activity. This can help you stay compliant with anti-money laundering regulations.
Key Differences Between RPA and Traditional Automation in Banking
Here are a few key differences:
Ease of implementation
One key difference between RPA and traditional automation is the ease of implementation. Traditional automation typically requires significant development efforts. It may need unique programming and will definitely take quite a bit of testing.
But you can add RPA to your workflows pretty easily. In fact, most solutions are low-code, which means you’re not going to need a computer science degree to get started or make a change.
Flexibility
RPA is super flexible. You can quickly and easily reconfigure your robots to adapt to your unique needs. In contrast, traditional automation is usually a little more rigid.
Traditional automation usually relies on some pretty extensive setup and development efforts. So making a change can quickly become a massive headache.
Ability to work with legacy systems
Robotic process automation in banking can work with the systems you already have. In fact, it can usually work with several of your existing systems and applications. That simplifies your workload and workflows.
Traditional automation, though, is often limited in how it works with your legacy systems. While not impossible, it may call for some significant dev efforts. And that’s not always easily available.
Human interaction
I’m a big fan of this one. You can design your robotic process automation to interact with humans. That lets the robots take on tasks that still need human input or decision-making.
On the other side, traditional automation is often limited to tasks that don’t need any input. It pulls a task through from start to finish but offers no space for human interaction.
Scalability
You can scale your robotic process automation in banking without much trouble at all. That means you can start small, test, optimize and scale up as you become more comfortable with the tech.
But traditional automation has a much heavier development weight on its shoulders. So simple changes can end up taking months to complete.
A few examples of robotic process automation in banking
Tons of banks are already using RPA to automate repetitive and rule-based tasks.
Here are some examples of how you can use robotic process automation in banking:
1. Customer Onboarding
Customer onboarding is a critical process in banking. It involves verifying the identity of customers and ensuring compliance with regulations. You can use RPA to automate this whole process. Start with identity verification, background checks, and documentation.
By automating these processes, you can reduce errors and improve your efficiency. Plus, it’ll help you deliver a faster and more seamless experience for your customers.
2. Account Reconciliation
Account reconciliation is a time-consuming and error-prone task. It involves matching transactions between different systems and reconciling balances. But you can add RPA to handle the process, reducing errors and processing times.
By automating this process, you can free up staff to focus on more complex tasks. And at the same time, you’ll improve the accuracy of your financial reporting. Win. Win.
3. Compliance Monitoring
Regulatory compliance is a significant challenge for banks. Non-compliance can lead to some steep fines and penalties. But you can use RPA to automate compliance monitoring tasks. This might include transaction monitoring, sanctions screening, and anti-money laundering (AML) checks.
By automating these tasks, banks can reduce the risk of non-compliance and improve their ability to detect and prevent fraudulent activities.
4. Claims Processing
Insurance claims processing is another area where you can use RPA. Start by automating tasks like claims validation, data entry, and document processing. That’ll reduce errors and processing times.
By automating these tasks, you can improve the efficiency of their claims processing and provide a faster and more accurate claims experience for customers.
5. Loan Processing
Loan processing is a complex and time-consuming task that involves several steps. For instance, you have application processing, credit checks, and documentation. But you can use RPA to automate these tasks. And that reduces errors and processing times.
By automating loan processing, banks can provide a faster and more efficient loan approval process, reducing the time it takes for customers to access credit.
Challenges in implementing robotic process automation in banking
While robotic process automation has a ton of benefits for banks, there are also a few challenges to note.
Resistance to change
One of the biggest challenges of implementing RPA in banking is resistance to change. Many employees may be resistant to the introduction of automation technologies that could potentially replace their jobs or alter their job responsibilities.
To overcome this resistance, banks should communicate the benefits of RPA to employees and involve them in the implementation process.
Data security and compliance
Banks deal with sensitive customer information, which makes data security and compliance a top priority. Implementing RPA can introduce new security risks, such as unauthorized access to sensitive information or data breaches.
Banks must ensure that their RPA systems follow data privacy regulations. And you have to make sure you have proper security measures in place to protect your customer data.
Scalability
Banks deal with high volumes of data and transactions, which need high scalability from RPA systems. As the volume of tasks to be automated increases, banks need to ensure that their RPA systems can handle the increased workload without impacting system performance.
Maintenance and support
RPA systems need ongoing maintenance and support to ensure that they continue to function properly. This includes monitoring system performance, identifying and resolving issues, and ensuring that the system remains up-to-date with the latest software updates and security patches.
Banks must invest in the necessary resources to maintain and support their RPA systems over the long term.
How can I add robotic process automation in banking?
Adding robotic process automation in banking requires a robust support automation platform that can connect the entire tech stack. It should also automate repetitive tasks and build solutions to fit any business challenge.
This feels like a fitting spot to add in our platform. Capacity, an AI-powered support automation platform that can help banks automate their support and business processes.
Capacity’s low-code platform, accessible through conversational AI, enables graceful human handoffs and intuitive task management via a powerful workflow automation suite, robust developer platform, and flexible database that can be deployed anywhere.
Here are some key features of Capacity which can help you add RPA into your workflows:
All-in-one helpdesk:
Capacity’s AI-powered chatbots can answer more than 90% of your frequently asked questions (FAQs), reducing the number of tickets in your support team’s queue.
Low-code workflows:
Capacity’s low-code platform allows banks to automate monotonous processes and tasks, increasing productivity in cross-functional teams.
User-friendly knowledge base:
Capacity’s platform empowers employees with access to information via a user-friendly knowledge base, suite of app integrations, and conversational interface.
Scalability:
Capacity’s flexible database can be deployed anywhere, making it scalable to handle high volumes of tasks and transactions.
Security and compliance:
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