The new face of Banking: Transformed by RPA

With a “can’t wait to automate strategy”, banks are the frontrunners riding the automation wave. They have successfully shifted the uninspiring and routine tasks to machines while engaging their human resources in more resourceful tasks. The results are phenomenal; there is a dramatic increase in the operational efficiency and improvement in customer experience, among a multitude of other benefits, making automation inevitable for banks.

What made banks the early adopters of the automation wave is the realization of the fact that it is an excellent way to enhance productivity, performance, and to bring round-the-clock efficiency in processes. Challenges such as strict regulations and controls posed by the Government, the rise of the fintechs, change in customer behavior, demand for faster and personalized services, and Mergers and Acquisitions have left banks with no other choice than to embrace automation. 

As it is, the banks spending on IT is twice as much as any other industry every year, which is approximately 7% of their total revenue, according to EY – Global Banking Outlook 2018 Survey of 221 financial institutions across 29 markets. If they decide to redirect even 1% of this amount to RPA, which many of them have already started in this direction, they can reap substantial benefits. 

Additionally, many consumer banks and hybrid banks can typically have over 600 highly supervised processes, out of which approximately 30% are already automated on an average. There are still 70% of processes that can be automated, and with RPA, it is not far-fetched to achieve the same. 

The question here is no longer whether to automate, but what to automate and in many cases “what else” to automate?. Automating a few dis-similar tasks will not be of much help as they do not have a direct impact on ROI, but automating tasks that drive profit and growth for banks is where the pot of gold might be. 

We looked at some key areas in a typical banking setup and the following bubbled up as potential candidates for RPA: 

1. Client onboarding and KYC regulations: Automate a combination of biometric tests like facial recognition and lip-syncing in addition to automating checks like document, address and liveness verification, and checking risk profile. Once onboarded, the automated monitoring solution also alerts the bank in case there is a change in his risk profile.

2. Detecting financial crime: Banks can apply Adaptive Behavioral Analytics, a set of sophisticated, automated, self-learning algorithms that monitor and review account activities and alert the fraud team in case of anomalies and also detect Anti Money Laundering activities. 

3. Improving dispute resolution: Disputes in banks can be categorized into disputes related to online transactions, debit and credit card payments, NEFT or RTGS transactions, and UPI payments. An automated dispute resolution system includes online dispute forms, automated questionnaires, and integration with signature pads. Additionally, timeline management, attaching supporting documents with cases, reporting, and audit trails of all dispute-related activity can also be automated to ensure disputes are resolved in a compliant time frame. 

4. Migrating legacy data: Automation can help banks perform data profiling and analysis of the existing data and migrating it to modern platforms that help banks overcome challenges of maintaining legacy data like heavy maintenance, operational, and performance cost.  

5. Automating due diligence: Reduce the proliferation of third party risk by performing efficient due diligence through automation. Both senders and recipients can streamline due diligence processes by digitizing requests, eliminating multiple emails, enabling accountability, and automating scoring with automated processes. 

6. Complying with GDPR: An easy-to-use automation platform can provide robust GDPR support. The platform can automate processes such as data discovery and mapping, protection of sensitive data, disposal of noncompliant data, delivery and deletion of customer data to meet the Right of Access inquiries, and export of customer data to meet the Right to Portability requests.

Automation initiatives are high in Banking, and the next wave of RPA is round the corner. With new use cases like attended (human-in-the-loop) and hybrid robots—and more comprehensive and AI-enhanced technology, banks can address its biggest burden of regulatory compliance and can bring products to market faster. 

Automation wins in banking have already demonstrated its business value for the industry. As against massive uncertainties on the political and economic fronts, RPA offers banks the opportunity to build highly innovative and agile organizations that can sustain any difficulty. A continued commitment to deeper and more intelligent automation will bring enormous and unprecedented benefits for the industry, and in over time, has the potential to change the industry’s face forever.