RPA in Banking and Finance: How to Benefit from RPA in Finance Enterprises

10 Aprile 2023

banking automation definition

Intelligent process automation and digital process automation combine basic RPA capabilities with AI tools to create more sophisticated automations. For example, optical character recognition can read printed text, and natural language processing can map numbers from invoices to fields in business systems. Machine vision algorithms could perform tasks like estimating insurance damages.

What can be automated in banks?

  • Loan processing. RPA can cut down months-long processes to a record time of 10-15 minutes.
  • Account closure process.
  • Know Your Customer (KYC)
  • Anti-Money Laundering (AML)
  • Accounts payable.
  • Credit card application processing.
  • Fraud Detection.
  • General ledger.

It also contributes to employees’ motivation, as now they can dedicate more time to complex and creative work. Now, the complex automation system of RPA and AI can recognize and process up to 94% of documents sent to the company. The same project also implied using AI technology to extract valuable information from mortgage documents. To do that, the AI vendor used image detection technology that can scan and “understand” around 200 types of forms used in mortgage processing. There are several important steps to consider before unfolding the RPA implementation process in your organization.

Automation & Process Control

And what’s more important – they are equally productive at night and in the morning. Before now, lots of operations used to require a client to come to a bank branch and communicate with managers. Chatbots can take over a part of this communication with no need to leave home. Why would so many managers and business owners rely on innovative robotic technologies? The thing is, they clearly realize what they get in exchange for RPA implementation. RPA functions are limited  per se – they can only help with the simplest actions like logging in to the system or ordering files.


With massive counter competition from virtual banking solutions, banks are under immense pressure to boost efficiency and optimize the resources. The scarcity of skilled resources, a sudden surge in personnel costs, and the need to improve process efficiencies are some of the other challenges that the banking and financial sector face today. This has led to the adoption of Robotic Process Automation (RPA) in banking and finance. It allows banks to offer new opportunities and experiences for customers, as well as helping them enter and grow in new markets, which, traditionally, has been challenging. Another way to extend the functionality of RPA with exponential returns is integrating it with workflow software to automate processes end-to-end.

Process automation

Customer satisfaction is one of the most significant benchmarks of any business with banks being no exception. To begin, banks should consider hiring a compliance partner to assist them in complying with federal and state regulations. Compliance is a complicated problem, especially in the banking industry, where laws change regularly. For several years, financial services groups have been lobbying for the government to enact consumer protection regulations. The government is likely to issue new guidelines regarding banking automation sooner rather than later. A compliance consultant can assist your bank in determining the best compliance practices and legislation that relates to its products and services.

banking automation definition

For example, they can easily cope with high volumes of data with no stress, especially at busy hours. While they are at work, you can use the power of the human brain for the bigger goal – strategic business growth that requires focus and creativity. RPA in banking and finance is a set of robotic activities that replace or augment routine human tasks in the financial domain. With them, managers can channel most of their attention to the critical organizational tasks that require creative brainwork. When it comes to RPA implementation, vendor choice should stem from their experience in the banking sector.

Customer Onboarding

With such a large customer base, it is expected to receive account closure requests every month. Account closures can occur for various reasons, one of which is when a client fails to deliver required papers. A mortgage loan in the United States takes about 50 to 53 days to process. Credit checks, repayment capacity, employment authentication, and inspection are all part of approving a mortgage loan. Prepare to dive into everything there is to know about Robotic Process Automation in the banking industry. From your business workflows to your IT operations, we’ve got you covered with AI-powered automation.

  • As of today, banking institutions successfully leverage RPA to boost transaction speed and increase efficiency.
  • RPA is not a comprehensive automation solution, but it is still relevant for some tasks.
  • RPA can help organizations make a step closer toward digital transformation in banking.
  • These technologies require little investment, are adopted with minimal disruption, require no human intervention once deployed, and are beneficial throughout the organization from the C-suite to customer service.
  • More and more people are using digital banking, cryptocurrency, and mobile payments.
  • We can expect more traditional banking institutions to implement automated systems for day-to-day tasks such as back-office services and customer support.

That’s why it’s critical that you have the option to connect with and embed technology of your choosing quickly and easily, on your own terms and timeline. Cybersecurity is another area that can benefit a lot from automation – and RPA is definitely up to the job. Many banks across the world are now automating manual processes for inspecting suspicious transactions flagged by AML systems. Although automation may bring a host of benefits, embracing it means eliminating some human-occupied posts and retraining staff. According to a 2019 report by Wells Fargo, 200,000 jobs could be eliminated over the next ten years in the banking industry due to chatbots and other automated software. For example, Axis Bank has been able to reduce the turn-around time on savings account opening by about 90 percent using RPA.

Account closure optimization

This person or a group of people will prepare the business infrastructure for the innovation and explain the existing workflow in detail. If it takes too much time to cover RPA expenses now, it’s better to shift your focus from investing into robotics to improving other processes. The main role of KeyBank’s digitization was to simplify existing internal and external processes. Employees can focus on client-centric activities, while clients enjoy an optimized experience. OCBC Bank located in Singapore has started its robotics transformation back in 2015.

banking automation definition

The most progressive players are now shifting their attention towards delivering even more value to customers with digital banking innovations. And they are choosing to “outsource” more resource-heavy aspects of service delivery such as KYC, identity management, or regulatory compliance for new types of financial products to third parties. WeChat gives users access to over 1 million of carefully curated “mini-programs” – merchant accounts that you can transact with such as government services providers, celebrities, travel agencies, and more. While WeChat is not a traditional financial services provider per se, it does show how a “Bank as a Marketplace” model can thrive. So much so, that Facebook seems to be taking a very similar approach with their cryptocurrency-backed foray into the financial sector. Similar to any other industry, cost-saving is critical to the banking industry, as well.

Meet fintech industry-specific regulations and connect proprietary applications

A major Japanese bank that cut down 400,000 hours of FTE manual work through bots is an example of recent bank machine automation. Meanwhile, numerous other BFSI companies, from MasterCard and Bank of America to JPMorgan Chase and American Express, have also reaped the benefits of RPA in banking workflows. Bots work for you 24x7x365, either performing complex tasks from start to finish or contributing to a common cause. With that said, your business can process more customer queries with 99 percent accuracy and speed. RPA in finance workflows reduces TAT from days to minutes, increasing productivity by 90 percent.

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A company must have 100 or more active working robots to qualify as an advanced program, but few RPA initiatives progress beyond the first 10 bots. Artificial intelligence and automation also can exacerbate a growing divide in the US between the rich and the poor. By centralizing a business process through automation, organizations also gain transparency into their workflows. There is BPA software that gives companies the ability to see all the process steps on one dashboard, providing visibility into the status of process activities, from task reviews to the approval process.

Transforming Data Operations in Financial Services

It goes through set rules and clears potential bottlenecks, which speeds up mortgage processing. Furthermore, robots can be tested in short cycle iterations, making it easy for banks to “test-and-learn” about how humans and robots can work together. The whole process can easily be automated by using RPA tools to extract data from KYC using OCR, which can then be matched to the data provided by the customer.

  • Back in 2016, Keith Polaski (cofounder) and David O’Connor (CTO) of Radius started investigating AI and automation solutions to ease up mortgage processing.
  • We equip Robotic Process Automation (RPA) software with the Optical Character Recognition (OCR) technology to streamline the monotonous processes of extracting vendor information, validating it, and processing the payment.
  • It’s not difficult to conceive how AI will help companies in the financial services and fintech industries with countless key activities, like understanding customer behavior, improving the customer experience (CX) and detecting fraud.
  • While back-end connections to databases and enterprise web services also assist in automation, RPA’s real value is in its quick and simple front-end integrations.
  • Additionally, banking automation provides financial institutions with more control and a more thorough, comprehensive analysis of their data to identify new opportunities for efficiency.
  • Automation systematically removes the facts transcription mistakes that existed among the center banking gadget and the brand new account commencing requests, thereby improving the facts high-satisfactory of the general gadget.

So, to help your business avoid common pitfalls and achieve resilience by leveraging RPA tools efficiently, we share our experience and best practices in this guide. Of course, there are pros and cons of automation in finance and banking, but this time we’ve focused on the benefits and areas where RPA works perfectly. Streamlining complex processes and automating manual tasks paves the way forward for the banking and finance sector. This approach delivers the speed that banks need to survive in the modern world while maintaining data accuracy to ensure ongoing compliance. The pressure on ITSM teams has increased dramatically with the widespread adoption of remote work.

Can you improve mobile banking experience for our customers?

We recruit and allocate specialized talent to fill immediate staffing gaps while cutting payroll costs by as much as 50%. AIS resources possess the necessary expertise and skill sets to effectively metadialog.com communicate with your team, enabling a seamless fit into your existing organizational structure. At a typical bank, this activity consumes 20 minutes of “touch time” per item.

banking automation definition

What are 4 examples of automation?

Common examples include household thermostats controlling boilers, the earliest automatic telephone switchboards, electronic navigation systems, or the most advanced algorithms behind self-driving cars.