How Robotic Process Automation (RPA) is impacting your financial institution
As the financial industry evolves, banks need to adopt technology that gives them a competitive edge. The industry is faced with upcoming regulation changes and increasing competition. This is driving a push to adopt cost-effective automation tools, such as robotic process automation (RPA). Also called “digital labor,” RPA is the use of specialized software to manage data and process transactions. RPA replicates human actions to reduce the labor required for manual, repetitive tasks.
Banks can use RPA to automate a variety of activities. Many solutions focus on back office tasks such as reporting, reconciliation, data remediation, and other repetitive work. RPA processes can run uninterrupted while being controlled centrally by a comparatively small team. RPA takes advantage of technology to provide banks with a virtual workforce, reducing processing time and overhead costs.
These robotic processes can perform repetitive tasks at high speed with minimal errors. Industry research shows that RPA can lead to a 25-50% cost savings by automating repetitive jobs. This saves time and frees high-value human resources to spend more time interacting with customers. This does not replace the need for human oversight, but it does help with regulatory compliance. RPA creates a digital log that can be used for compliance audits.
While it is typical for high volume, low-value tasks to be automated, the applications for RPA are scalable. As RPA solutions become more advanced, they are quickly moving to a front office position involving interactions with customers. Chatbots and robot service reps use details based on the customer and the context to provide automatic, unique responses. This reduces the need for human resources in sales, customer service, and verification procedures.
In 2016, PwC conducted a survey of RPA use in the financial services industry. They found significant differences in how companies use automation technology. About 66% of those who responded reported that they use RPA internally. The rest rely on outsourcing, typically through offshore projects.
The financial industry is being pushed to do more with less, increasing their reliance on RPA technologies. “Digital labor is giving financial institutions a once-in-a-generation opportunity to push a next generation discipline around business process efficiency,” states Kevin Kroen, Partner, Financial Services Advisory. As this sector becomes more concentrated and developed, banks must rely on new technology to add value. RPA offers practical solutions that benefit both the banks and their customers.