Process Automation in Banking
PROCESS AUTOMATION REVOLUTIONIZING END-TO-END PROCESSES IN THE BANKING INDUSTRY
The global market for Robotic Process Automation (RPA) is growing tremendously. According to a recent report by Fortune Business Insights, the global RPA market size is projected to be worth USD 6.81 billion by the end of 2026.Process Automation is a way to automate simple, repeatable tasks that are otherwise performed manually. This technology is cost-effective as it requires less up-front training and allows employees to be more effective in higher-level tasks. Also, it minimizes the physical limitations of an everyday job allowing employees to perform tasks outside their geographical location.
In the current market scenario, process automation has become a necessity across industries. One of the most popular industries in which robotic automation tools are being widely used is banking. The banking sector is facing new challenges every single day and the need of the hour is to cut overheads, save costs and increase revenue streams. RPA offers banks with invaluable solutions and works as a key enabler of business transformation initiatives within their organization.
RPA can Automate Processes across the Front, Middle and Back Offices in Banking
It is crucial for modern banks to establish an efficient structural system that seamlessly integrates the processes between the front, middle and back offices. The aim is to optimize communication between these units, improve the internal business processes and enhance customer services/support.
The front office is the face of the bank. This unit interacts directly with customers both in-person or virtually. The middle office acts as a bridge between the front and back offices. Though this unit has no direct interaction with customers, indirectly they have an immense influence on bank operations such as data input for the front offices, monitoring credit scores, minimizing risks and managing overall control. The back office, on the other hand, implements workflow regulations; collects and analyzes data to improve business processes; manages accounting, regulatory reporting and executes mutual settlements.
As each unit has predefined roles and responsibilities, it becomes critical to effectively manage the processes to improve business outcomes, customer satisfaction and reduce operational costs. The answer to the above is process automation—a technology which is getting very popular as banks leverage bots and robotic processing systems to help in routine, administrative and operational tasks. Artificial Intelligence (AI)-powered RPA solutions are able to conduct a number of activities in a single automated workflow. These solutions can be deployed in the areas of customer service, fraud detection, anti-money laundering, customer analytics and many more.
Process Automation Examples that can Optimize Banking Processes
It is crucial for modern banks to establish an efficient structural system that seamlessly integrates the processes between the front, middle and back offices. The aim is to optimize communication between these units, improve the internal business processes and enhance customer services/support.
The front office is the face of the bank. This unit interacts directly with customers both in-person or virtually. The middle office acts as a bridge between the front and back offices. Though this unit has no direct interaction with customers, indirectly they have an immense influence on bank operations such as data input for the front offices, monitoring credit scores, minimizing risks and managing overall control. The back office, on the other hand, implements workflow regulations; collects and analyzes data to improve business processes; manages accounting, regulatory reporting and executes mutual settlements.
As each unit has predefined roles and responsibilities, it becomes critical to effectively manage the processes to improve business outcomes, customer satisfaction and reduce operational costs. The answer to the above is process automation—a technology which is getting very popular as banks leverage bots and robotic processing systems to help in routine, administrative and operational tasks. Artificial Intelligence (AI)-powered RPA solutions are able to conduct a number of activities in a single automated workflow. These solutions can be deployed in the areas of customer service, fraud detection, anti-money laundering, customer analytics and many more.
Process Automation Examples that can Optimize Banking Processes
Several AI-powered RPA solutions have already gained prominence by automating processes across the front, middle and back offices of banks. For example, in the front office, intelligent chatbots/virtual assistants can provide consumers with quick and personalized interactions. Apart from bringing uninterrupted customer support, they also offer the benefits of hyper-personalization, ease of use and fraud reduction.
KYC and regulatory checks are integral mid-office processes and have to be error-free and fast to ensure accelerated onboarding and a positive customer experience. By deploying process automation to manual processes involved in customer identification and customer due diligence, banks can enjoy significant improvements in productivity, compliance and customer satisfaction.
Trade finance processes—an essential banking pillar—is a perfect example of a back office process that can be automated. Currently, trade finance processes face several challenges such as poorly integrated legacy systems and numerous trade-related regulations. The biggest challenge is that these processes are paper-based and hence labor and cost intensive. These challenges lead to long transaction turnaround times, high error rates, high handling and storage costs and operational risks—all of which can be optimized by automating the workflows.
Benefits of Robotic Process Automation in Banking
By leveraging RPA, banks can witness a positive ROI in less than four weeks[1] while also improving efficiency without compromising on security. However, the benefits of RPA are not limited to just time saving and cost efficiency. With the introduction of cognitive technologies like AI, machine learning (ML), and computer vision, the scope of hyperautomation has expanded and there are several benefits of RPA in the banking industry. Some of the prominent ones that banks can gain from automating their front, middle and back offices are:
- Enhanced productivity: Automation allows banks to free up their knowledge workers for more value-added tasks
- Accelerated operational efficiency: Processes are better streamlined and optimized with effective digitization driving increased efficiency
- Easy Scalability: RPA can be efficiently scaled up as the volume of data and processes increases
- Improved compliance: Automation of compliance requirements reduces legal issues and brings better business operations
- Increased speed and accuracy: By eliminating the possibility of error, high-value and routine tasks help maximize human effort
Process automation is an emerging technology that is likely to have a long term impact on the way banks operate and deliver services. Connect with us to know how our RPA Centre of Excellence can help you take off your automation journey.