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Benefits Of Implementing RPA In the Banking and Finance Industry
Benefits Of Implementing RPA In the Banking and Finance Industry

March 28, 2024

RPA

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Table of contents-

 

  • Introduction.
  • What does RPA in the banking and finance industry refer to?
  • Top benefits of implementing RPA in the banking and finance sector.
  • RPA use cases in the banking and finance industry.
  • Way to implement RPA in the finance industry.
  • Two major examples of the finance and banking industry that use RPA.
  • Challenges of implementing RPA in the finance industry.
  • Conclusion.

Introduction

 

Banks are a major part of the finance industry as they govern the money and also control the

flow of money from citizens to organizations. Every bank has their employees as they make mistakes that lead to loss of money. Human error in the banking segment costs approximately $878000 annually and 25000 hours of wasteful work. This has a direct impact on global GDP and revenues. However many developed nations have discovered the solutions that are RPA or Robotic Process Automation. According to a Mckinsey report, around 60% of occupations can automate over 30% of activities with

 

We will talk about RPA in detail and what benefits it offers for the banking and finance sector that does not make the loss of too much money.

What Does RPA in the Banking and Finance Industry Refer To?

 

Simply RPA or Robotic Process Automation refers to a software technology that makes it easy to build, deploy, and manage software robots that emulate human actions interacting with digital systems and software.

 

In the banking and finance industry, RPA refers to a technology that automates manually repeated tasks and lets employees attend to complex tasks that are not repetitive. It saves the operational cost and also boosts carrier efficiency.

 

                                 RPA in banking and finance is termed as the use of robotic applications to augment human efforts.”

Top Benefits of implementing RPA in the Banking and Finance industry

 

RPA is a new technology but still, many worldwide finance and banking industries have implemented it because it has many benefits. Here are some of the top benefits of implementing RPA.

Increase accuracy and reliability

As we mentioned, humans can make errors that could cost the company a lot. But RPA is all about robotics as machines have fewer error records than humans. The implementation of RPA in business brings accuracy and reliability to work for the finance industry.

Enhance efficiency and boost productivity

 

Gartner estimates that banking automation can prevent up to 25,000 hours of unnecessary work caused by human mistakes. Since RPA refers to software and machines, it can’t be tiring and can easily carry out instructions quickly. That boosts productivity and also keeps the least chance of error.

Fraud detection

The finance industry is all about the process of transactions as humans enter data manually and make transactions of money. Sometimes this could lead to fraud as there are hassle so may be fraud escape by employees. RPA can enter data of transactions and also make alerts when any fraud activities occur.

24/7 assistance

As it is a money receiving, and transferring industry so always a lot of queries come every second or 24/7. It is quite not possible to handle these queries by the bank employees. RPA bot can answer every query in seconds by analyzing data entered by customers as input.

Cost savings

By eliminating redundancy and minimizing the need for manual intervention, banking and finance firms can exceptionally reduce the added costs they spend on resources, systems, and workforce. This leads to saving approximately 20-25% of costs because of increased efficiency, low energy use, and reduced time.

Improved analytics

RPA enables the proper analytics report that employees or normal systems aren't able to produce. This helps to make the right decision for the organization that lessens the loss.

Control operations

RPA can streamline and reduce the costs of different operational processes. For example, RPA can be used to quickly assess inquiries, and fulfill requests as a part of procurement processes.

 

RPA use cases in the banking and finance industry

As it has a lot of benefits, then surely there are many use cases of RPA in the banking industry. We will see in which aspect RPA implementation could give the best results.

Managing cash flow

There are always a lot of cash deposits in banks every day and in the finance industry. It is quite difficult to manage cash flow customarily. RPA can manage the flow of cash manually to optimize cash flows and improve overall financial management.

Faster loan processing

Automating loan administration processes by implementation of RPA, including underwriting, validation, and data consolidation, to streamline the loan approval process and improve efficiency. This leads to faster loan processing than usual.

Data relocation

RPA enables the data relocation from one system to another when the first one keeps on upgrades. This leads to the risk of errors in the database.

Customer onboarding approach

RPA can be used to extract customer data from various sources, perform identity verification checks, validate documents, and populate the necessary information into banking systems. This streamlines the onboarding process, reduces errors, and improves operational efficiency.

 

Way to implement RPA in banking and finance

 

You can’t just put your RPA software into the system to work. You need proper knowledge, and ideas of the required process to implement the RPA in the system. Here are the brief instructions provided that are needed to implement RPA in the finance industry.

  • Identify the manual and repetitive tasks that you want to upgrade to automation for your company.
  • Define clear goals, outcomes probability, and objectives of implementation of RPA.
  • Select a suitable RPA tool (e.g., UiPath, Automation Anywhere) after comparing their features, capabilities, convenience to use, etc according to your need.
  • Assess process feasibility and prioritize based on volume and stability as this leads to processing the heavier tasks first.
  • Design detailed workflows and process maps as it helps you to make analysis easily.
  • Develop and test automation scripts using the chosen RPA tool as it is almost clear what outcomes could be in the future.
  • Obtain necessary approvals from stakeholders.
  • Implement scripts and closely monitor their performance as they run smoothly or not.
  • Teach your employees about the RPA so they can handle it properly.
  • Continuously optimize and refine automated workflows.
  • Review RPA goals and workflow regularly.

Two Major Examples of the Finance Industry that use RPA

 

Here are real-life examples of industries mentioned that use RPA to enhance their finance industry.

 

Industry name

1. POSTBANK


2. CAIXA GERAL DE DEPÓSITOS


 

Use cases

To streamline 20 loan processes.


To automate the back office tasks.


 

Challenges of Implementing RPA in the Finance and Banking Industry

 

There are many benefits, features, and use cases of implementing RPA but there are also some challenges that could affect the whole process.

  • Integration with existing systems could produce complexity while implementing RPA in banking and finance.
  • RPA requires long-term maintenance and monitoring that could be costly and exhausting.
  • Training of employees could be challenging as it is not easy to train employees on this new technology as they are mostly from non-tech past.

Conclusion

 

Several banks and financial institutions have started the journey of implementing RPA in their operations to work quicker and enhance their productivity. Robotic Process Automation(RPA) can easily get rid of manual, repetitive, and time-consuming operations. This decreased the error rates and also was able to make a positive impact on global revenue. Overall, RPA will benefit the finance industry but it will take some time to adapt RPA completely to the global finance industry.

 


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