RPA in banking has been of greater importance than ever, since global digitalization is forcing every business in all corners of life to transform itself to meet customers’ satisfaction. For banks, RPA has become a powerful tool to enhance their systems and gain a competitive advantage in the increasingly crowded market.
What is RPA?
RPA, which stands for Robot Process Automation, is a technology that allows organizations to resolve mundane and repetitive tasks using software applications (robots or bots) instead of manual labor. Besides its accuracy and time efficiency, this technology is also highly versatile and adaptive, meaning it can be integrated into companies of all sizes, from small start-ups to the largest enterprises.
That is the reason why this high-tech solution is becoming such a fertile market in the IT industry. According to a report from Tractica, the worldwide revenue for RPA is forecast to increase from $151 million in 2016 to more than $5.1 billion by 2025.
Read more about Key insights of the booming RPA market
Why RPA in Banking and Finance?
In an attempt to remain competitive in an increasingly saturated market – especially with the advent of virtual banking – many banking firms have had to find new ways to reinvent themselves and improve user experience for their customers. This is where RPA comes into play.
According to a statistic by Domo, the global population produces a total of 2.5 quintillion bytes of data on a daily basis. Among that, it is hard to imagine how enormous the volume of data that a bank employee have to deal with every day!
Yet they need to maintain the utmost accuracy and security at all time. Besides, there are tons of challenges that the banking and financial sector have to face everyday, including the scarcity of high-quality resources, the surge in personnel costs, and the strict requirement of process efficiencies. However, tedious manual tasks prone to human errors are likely going to make that requirement almost impossible.
RPA, on the other hand, is a reliable tool for banks. All processes using robots are automated with precise calculations and algorithms, leaving little room for mistakes and security breaches. In addition, minimizing manual tasks is also synonymous with limiting excess time, allowing for better deployment of human resources.
Practical Applications of RPA in Banking
As mentioned above, RPA is highly flexible in terms of applications, from back-end to front-end operations. In fact, there is a wide variety of processes where Robot Process Automation can provide huge enhancement for banking companies, including:
Risk and compliance report:
Banking and Finance is a closely governed field of business and needs to adhere to many compliance requirements. For example, a risk management report involves going through multiple e-mail systems, external websites, and broker statements to generate reports and highlight anomalies. The use of RPA has automated 90% of these processes with 24/7 availability and highest accuracy, saving significant costs and time.
Queries that banks deal with on a daily basis such as account information, application status and balance information are complicated with low turnaround time, posing great difficulties for manual employees. RPA can provide real-time automatic responses to these questions using chatbots, thereby improving time efficiency and human resources management.
Fraud has always been at the top of priorities for banks, especially in a digital system. Yet, it is challenging for firms to keep track of and scrutinize every activity to detect fraud. Meanwhile, RPA can check the transactions as soon as they are made and report on possible abnormal patterns in real-time. In certain cases, RPA can prevent fraud by blocking accounts and stopping the transactions at once.
Know Your Customer (KYC) Optimization
For every bank, KYC is an obligatory procedure when it comes to scale-up strategies. According to the Thomson Reuters survey, the expenditure for KYC in banking firms reaches about $500 million every year. With RPA, the cost of manual KYC processing will be dramatically reduced, and customer data will be evaluated with better accuracy and fewer errors.
These are just a few examples of the areas where RPA can be applied in the banking processes. Others include Mortgage Loan, Credit Card Processing, Account Opening and Closing Process, etc.
Automatic Report Generation
Making a compliance report when suspecting fraud transactions or suspicious activity is a regular requirement at banks and financial institutions. Normally, the bank’s compliance officers has to manually read all the reports and fill in the necessary details in the SAR form.
Generating compliance reports for fraudulent transactions in the form of suspicious activity reports or SARs is a regular requirement at banks and financial institutions. Conventionally, compliance officers are supposed to read all the reports manually and fill in the necessary details, which is an extremely repetitive task. But with RPA, this time and effort consuming tasks can be as ease as a piece of cake.
Read more about RPA successful applications in Business.
In short, Robot Process Automation is becoming more and more vital for every organization working in the Banking and Finance industry. The larger the banks the greater the role RPA will play. Even for smaller businesses, RPA implementation is also an effective feature to increase reliability and attract customers.
CMC Global is constantly striving to improve our capacity in implementing RPA projects. Previously, in December 2019, we acquired 10 RPA Automation Anywhere certificates, proving our capacity to deploy automation projects. These achievements show our serious effort in building competence in automation and implementing new technology solutions.
CMC Global also has previous experience working in the Banking and Finance industry with a Leading retail bank in Vietnam. At the same time, we also provide technologies and solutions for businesses that want to have a go at RPA. This product promises to open many opportunities for CMC Global to successfully implement upcoming large projects.
Read more on CMC Global’s products and services and equip your business with the latest IT solutions here.