The BFSI industry is growing at an unprecedented rate due to rapid technological advancements. Virtual cards, open banking, and voice payments are some of the new innovations that are taking the banking world by storm. As client servicing involves the introduction of new financial products and services, manual backend operations are being replaced quickly. Banks and other financial institutions across the world are quickly adopting technology to meet four important goals — regulatory compliance, improved customer experience, business expansion, and data security. To help meet these ambitious goals, there has been increasing adoption of automation through Robotic Process Automation (RPA).
Simply put, Robotic Process Automation (RPA) allows users to eliminate or at least reduce human effort by automating repetitive manual processes like report generation, to free up the time and energy of employees to address bigger issues. In recent years, financial institutions have also started to leverage AI/ML/NLP capabilities to further the use of RPA. The addition of artificial intelligence expands the scope of RPA and enables RPA software to understand human language and emotions, handle complex processes, and adapt to real-time data.
A report from Polaris Market Research states that the RPA market is estimated to reach USD 8.7 Billion by 2026. The introduction of RPA in the industry has allowed banks and financial institutions to digitally transform their operations and focus more on strategic aspects of their growth such as their products, services, and business expansion.
Use Cases of RPA in BFSI
On a generic note, three types of jobs fall under the RPA category — rule-based, decision-based, and judgment-based:
- Rule-based, repetitive manual tasks can be automated using RPA, Bots, and OCR/ICR technologies
- Speech Analytics, NLP, and AI technologies help perform decision-based tasks to streamline processes
- AI/ML/NLP can be used to perform judgment-based tasks that require analyses of a large volume of data
Digital transformation has allowed banking and other financial institutions to improve their customer offerings. Brick-and-mortar has evolved to include mobile banking, digital banking, scan-and-go payment options, and more. While the end-user processes witnessed a digital makeover, backend processes had limited technological intervention with many processes in the ecosystem being handled manually.
There are several areas in a financial institution where RPA would make a difference:
Customer Service By implementing RPA tools such as bots, banks can address client queries faster and more efficiently. This contributes to the overall client experience and service.
Credit Card Processing is tedious since applicant details needed to be manually verified before approval. RPA can improve the Know Your Customer (KYC) process by verifying information from different databases without human intervention.
Fraud Detection can be automated using RPA. This helps inspect suspicious trades flagged by Anti-Money Laundering systems.
Mortgage Loan Processing requires verification of documents, customer credit score checks, and application processing. With no room for error or delay, RPA accelerates these steps to reduce the time taken for loan approval and disbursement.
Report Automation can reduce manual errors and the time and effort taken to generate such reports to help executives leverage these data insights routinely for strategic decisions.
Account Closure Procedures can be made easy with RPA as it helps track clients, send automated notifications, and schedule calls to resolve discrepancies.
RPA has gained widespread adoption in recent years. As RPA does not require complex system integration, automation can be easily achieved. For instance, the account opening process can be automated using RPA. By automating these structured, rules-driven, monotonous processes, financial companies can improve overall productivity and customer service. RPA helps banks and other financial institutions streamline data extraction, improve Politically Exposed Person (PEP) screening, risk rating approval, etc. Automation helps banks improve the burden of regulatory compliance by reducing manual errors and updating automation workflows to keep pace with the changing requirements.
Future of RPA in BFSI
In the current landscape where customers expect seamless service and quick turnaround from banks, major players in the industry are focusing on investing in technology that can transform economies and the workforce. RPA/IPA plays a significant role in this transformation as it enhances customer satisfaction by automating entire processes and infuses agility and scalability in operations. McKinsey Global Institute predicts that 81% of predictable physical work and 64% of data-collection activities could potentially be automated using emerging technologies.
GS Lab | GAVS for BFSI
GS Lab | GAVS is a trusted partner for several global banks and financial services companies and has implemented Robotic Process Automation for over a dozen clients. We are known for our flexible pricing models, deep domain expertise in core and support processes and technologies, and digital transformation experience. To know more, visit https://www.gavstech.com/banking-financial-services/