BY;Kevin Birgen,Manager, IT Risk Assurance,
In the recent past, we have witnessed a surge in digital transformation across multiple sectors. Top global industry players have been constantly molding themselves to fit into the rapidly changing technological advancements. The financial and banking sector has not been left behind either. There has been a continuous need across these sectors to change the dynamics and modify working styles by embracing new technologies.
As such, the banking sector is under a lot of pressure. This is driven by the need to enhance productivity and increase operational efficiency in order to offer reliable and more secure services to customers. Robotic Process Automation (RPA) plays a crucial role in making this a reality for banks.
RPA offers software automation techniques that allow streamlining mundane and repetitive operations, reducing organizational costs and eliminating human error. It combines robotic automation and artificial intelligence to automate human activities which may include data entry and simple customer service communications. It is estimated that over the next few years, more than one-fourth of banking procedures will pass through automation.
We have witnessed, as a result of the current pandemic, virtual banking services taking a pivotal position in the banking space.A survey by the Kenya Bankers Association released in February 2022 indicated that “six out of every 10 bank customers preferred Mobile Banking, with another two out of 10 recording their preference for Internet/Online Banking.” Most banks ended up scaling down a number of their branches as well as ATM machines. A big question would be, going forward, how then are financial institutions going to manage working virtually without coming to the office? The answer is simple. Robotic Process Automation.
The future of banking is definitely filled with a lot of efficiencies as a result of automation of multiple processes. This is likely to directly affect customer queries, compliance, loan processing and report automation.
Banks handle a large number of customer queries that at times may overwhelm call centers. As such, customers may experience longer waiting times that would quickly translate to customer dissatisfaction.RPA can assist with low priority tasks, allowing the customer service team to handle high priority tasks that call for higher intelligence. Moreover, robots are available 24/7 to handle customer issues, which significantly improves customer satisfaction.
Banks also deal with a wide array of regulations issued by central banks, governments and third parties. It becomes quite difficult for staff to comply with every single regulation.With RPA working 24/7, it can quickly scan through transactions to identify compliance gaps in diverse areas including know your customer (KYC), anti-money laundering (AML) and fraud detection. What is even more, the predictive capability of RPA can assist in picking out trends that would materialize to fraud or non-compliance even before they occur.
With regards to lending, RPA provides maximum transparency and visibility of every task across the process. The end-to-end electronic lending process means that financial companies can collect and manage data at every stage of the journey. This allows for cross-linking with central document management databases and checking a process status within minutes. This can cut down the usually tedious loan processing timelines to only 10-15 minutes.
Like all public companies, banks also have to prepare regular reports to keep all stakeholders in the know of the business performance. Considering the significance of a report, there is no room for banks or financial institutions to make even minor mistakes.RPA can eliminate the risk of human error by filling all the fields of the report automatically. It enables banks to speed up monthly reporting and deliver more accurate information to their stakeholders.
To successfully implement RPA banks and financial institutions need to identify the correct procedure for automation, evaluate how different applications and business
processes overlap, perform automation to the processes via robot and finally monitor
and govern the robots for the creation of excellence.
Banks that implement RPA can elevate their customer experience while improving quality and cutting costs. Implementing RPA in banking requires almost no new infrastructure. Banks can leverage existing IT infrastructure to begin reaping the benefits. One unique feature of RPA is that it can take advantage of the native user interfaces of existing legacy systems to perform its automated tasks, which makes it a “minimally invasive” solution that builds nicely upon existing infrastructure.
Implementing RPA within various operations and departments makes banks execute processes faster. Research indicates banks can save up to 75% on certain operational processes while also improving productivity and quality. While some RPA projects lead to reduced headcount, many leading banks see an opportunity to use RPA to help their existing employees become more effective.
The digitization of data allows banks to reduce paperwork. RPA can quickly scan through relevant information and glean strategic analytical data. There are various RPA tools that provide drag-and-drop technology to automate processes with little to no development. Likewise, bots continue working 24/7 to take care of data entry, payroll, and other mundane tasks, allowing humans to focus on more strategic or creative work.
RPAs can also augment human workforce. As the concept of a “digital workforce” continues to emerge due to the advancement of technologies, robots can take care of data entry, payroll, and other data processing tasks, while humans analyze reports for gathering useful insights.
In conclusion, Robotic Process Automation offers a great opportunity for banks to take
advantage of digital transformation in a bid to grow their business.