The Banking industry has always been marked by rapid, often disruptive changes. Issues such as globalization, regulations, and new competitive entries exist. This has forced them to look for new ways to increase revenue, cut costs, and accelerate profits. Recently, banks have adopted Robotic Process Automation (RPA) to further reduce costs and transition from a labor intensive process to software based processes. Ever since RPA came into play, banks have dramatically reduced human intervention in the execution of tasks & decision making and operational efficiency have improved significantly up to 50%.

Banks are already under more pressure than ever to find ways to reduce costs out of operations to improve profitability and better position their companies for growth in the long term. Robotic Process Automation (RPA) is becoming the silver bullet for banks to be highly efficient and a demonstrable way to reduce IT spending — without compromising service provisioning in an industry consumed by risk mitigation, regulations and other compliance mandates. RPA is attractive because it’s proven to work in the real world.

There are several ways for banks to get a taste of RPA before complete adoption.

Adoption Approaches

Many global banks started the automation journey early on and are now streamlining their RPA initiatives, while many regional banks are still testing tools and trying out RPA projects in specific areas. We see the following approaches being taken:

  • Pilot Projects: When the era of automation started, banks began their automation journey with PoC projects to see if the hype is for real. This also helped them to convince their senior management about the benefits of automation. Choosing the right process to do a PoC will help the banks adopt RPA faster and get better results.

 

  • Business Units:  Banks typically consist of different business units. For example, consumer lending maybe a segment. Typically, these business units are the ones where the running costs are high. Any RPA initiative which is successful can be a benchmark for other business units and adoption becomes easier.

 

  • Simple processes: Banks can even look at a simple process to automate first. What this does is give a taste of how RPA can be beneficial. These simple processes can also be less intrusive and can be below the radar wherein even an unsuccessful pilot could be manageable. Automating simple processes could be done in a shorter span of time and can be scaled up much faster with management approval.

 

  • Big Bang: Banks will always have one process which gives the most pain. This is the biggest headache they have and if solved will have a very big benefit. Banks who are desperate to cut cost and improve efficiency, and also have enough budget to support these kinds of projects will be the biggest beneficiary. Typically, these are strategic projects initiated by the senior management led by the CIO.

 

It is imperative that there is an executive sponsor for the RPA initiative. CIOs and other business unit leaders need to create an RPA center of excellence. Identify an RPA champion who will evangelize it across the organization and create a plan to initiate and scale RPA. There should be necessary funding available and all the line of business (LOB) leaders need to be educated on the benefits that RPA can bring to the table. Decide what should be the best way to introduce RPA. As discussed it could be one among the four methods that is described above.

Once there is a successful RPA pilot it will build support, bandwidth and resources needed to scale up the RPA programs in the bank. It’s important to visualize any process before it’s selected for an RPA initiative. The goal of an RPA is not to just automate a process which is manual & time consuming but also to improve it so that it ultimately makes it efficient and simple than the one before. It’s better to optimize a process and then follow up with automation. Automation gives an opportunity for the bank to re-imagine the process to be less manual and simple and achieving the objectives with the larger picture in mind. It is better to design an RPA process based on employees & customers rather than the current infrastructure. Some of the areas where RPA can play a significant role are:

  • Risk & Compliance
  • Anti-Money laundering
  • Accounting
  • Mortgages
  • Re-conciliations
  • KYC
  • Fraud
  • Payments
  • Customer On-boarding

It is also important to think beyond RPA. AI plays a key role when it comes to RPA particularly in driving operational efficiency.AI can help in solving complex processes with expert decision making at scale. By leveraging the power of AI, banks can lead the digital transformation and open opportunities which they never thought before. AI has the ability to predict and offer preventive measures to unexpected results in a process. AI helps in getting efficiency by reducing risk and better compliance.

Robotic Process Automation now has an established track record in delivering tangible and measurable results in banks. It is helping them in reducing recurring expenses and better scope with the market challenges. So, go for it and enjoy the benefits.

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