5 min read

The impact of robotic process automation in banking

Banking

FinTech

Robotics

The banking industry has seen a huge number of technological breakthroughs over the past few years, propelling it into a realm of exciting developments and endless possibilities. Leading the charge is the rise of robotic process automation — also known as RPA — a game-changing innovation set to shake up the banking sector. Picture a market where customer service is redefined, efficiency skyrockets, and mundane tasks are handled by software robots: this is the potential of RPA.

From streamlining front-office operations to automating financial reporting, RPA is reshaping the landscape of finance. Tasks like data entry and loan application processing no longer need to be a drain on time, energy, and resources; instead, banks can now focus on improving quality control and delivering exceptional service. With RPA, the future of banking isn’t just a promising possibility: it’s already here, transforming the industry one automated task at a time.

In this blog post, we’ll dive deeper into RPA’s impact on the finance sector — unraveling how the potential of this new tech is transforming customer service, navigating intricate compliance regulations, slashing operational costs, fortifying security measures, and so much more.

Unlocking the benefits of RPA in banking and finance

Robotic process automation (RPA) isn’t just a buzzword: it’s reshaping how financial institutions operate. With RPA, time-consuming and complex tasks can be partially or even fully automated, making them more efficient than ever before.

RPA isn’t just about saving time; it’s a hugely useful tool for navigating the compliance minefield. By swiftly adhering to regulatory standards, it frees up valuable resources that can be redirected towards innovation. No more drowning in outdated systems: RPA paves the way for a future where innovation takes center stage.

Accuracy? Check. RPA eliminates costly mistakes and human error, keeping operations on track. Wave goodbye to the excessive costs and soaring overheads associated with manual labor: RPA slashes expenditure while simplifying audits. With streamlined operations, response times are turbocharged, delivering a stress-free experience for clients — plus, real-time data analysis means staying ahead of the curve. As this technology continues to grow and evolve, robotic process automation is poised to reform countless more aspects of the banking and finance industry, making the sectors more agile and competitive in the long run.

Role of RPA in banking: how it transforms accounting and auditing

Using RPA in the financial sector can benefit data collection, support a greater level of precision, streamline operations, and increase flexibility — alongside countless other perks. Gone are the days of manual errors plaguing banking tasks: with RPA tailored to the unique needs of each institution, the mundane becomes automated, freeing up valuable human resources for more strategic endeavors.

This tech helps banks pinpoint areas that need improvement — all while improving efficiencies across the board. RPA guarantees that automated workflows operate exactly to your specifications, offering much-improved visibility into process cycles so banks can better understand and evaluate how activities are conducted within their organization. It’s a game-changer in the evolution of the financial sector, empowering banks to steer their operations with data-driven certainty.

From refining tedious accounting processes to correcting time-intensive auditing procedures, RPA has the potential to reshape the banking landscape. It’s not just about improving operations; it’s about delivering unparalleled service to customers and driving financial institutions toward success.

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Dmitry Nazarevich CTO

Date: Mar 08, 2023

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RPA use cases in banking and finance

Staying ahead means embracing innovation at every turn in the fast-paced and ever-evolving world of finance. From streamlining processes to ramping up customer interaction and engagement, RPA is the fuel propelling industries in the right direction.

Report generation

RPA is the ultimate ally for banks and financial institutions — conveniently generating compliance reports and providing in-depth insights into a company’s adherence to regulations. Need to better understand your financial health? RPA swiftly churns out detailed and accurate balance sheets, income statements, and cash flow reports, giving you a clear picture of your business’s financial well-being. Keep customers in the loop with thorough and specific account statements, transaction histories, and credit reports, alongside comprehensive internal audit assessments to evaluate controls, spot risks, and advise on existing processes.

Accounts payable

Robotic process automation can dramatically improve accuracy and competency when it comes to accounts payable. RPA offers a huge number of impactful applications within accounts payable, including consolidating invoice processing, expediting payment processing, and optimizing vendor management. Employing RPA means businesses can easily extract data from invoices, validate information, match invoices with purchase orders, and update accounting systems. By automating these intricate processes, businesses can mitigate errors and ultimately expedite the entire transaction cycle.

In addition to these transactional tasks, RPA also proves invaluable in vendor management. Through automated onboarding processes and the continuous monitoring of vendor compliance, businesses can efficiently manage their vendor relationships while minimizing administrative burdens and their associated headaches. This automation not only reduces the likelihood of errors but also accelerates processing time — resulting in significant cost savings, improved operational efficiencies, and the chance for businesses to better position themselves to thrive in today’s dynamic financial market.

Accounts receivable

Automating accounts receivable processes is a common but very much worthwhile use case for RPA in the finance industry. RPA tools offer increased speed and precision in tasks, including invoicing, client onboarding, and collections through the digitization of workflows and data aggregation from diverse sources. These automated bots can easily send payment reminders, detect account arrears, and integrate supplier data into accounts receivable systems. Additionally, this tech is able to generate reports containing essential metrics — think customer invoices, order payments, missed discounts, and so on — offering valuable insights into financial trends and facilitating adjustments in strategy accordingly. With potential cost reductions of up to 25% in accounts receivable-related operations, RPA has made this technological transformation a hugely attractive prospect for banks and financial services firms.

Mortgage processing

Mortgage processing is another area where RPA can be successfully utilized in banking and finance. Through RPA, a wide variety of tasks within mortgage processing can easily be automated, from the collection and validation of borrower information to the scrutiny of credit scores and verification of employment and income records. RPA also proves invaluable when verifying property information, calculating interest rates, and generating essential documents. By automating these processes, RPA can help financial institutions reduce errors, amplify the speed and precision of operations, and elevate overall customer satisfaction.

RPA also plays a pivotal role in ensuring compliance with regulatory standards by meticulously collecting and processing all requisite documentation. Essentially, implementing RPA in mortgage processing can lead to significant improvements in efficiency and cost savings.

Know your customer (KYC)

Robotic process automation (RPA) is becoming an increasingly popular tool for banks and financial institutions to automate the costly and labor-intensive customer onboarding process, also known as ‘Know Your Customer’ (KYC). RPA can quickly sift through vast datasets, scanning an eye-wateringly large number of records for compliance-related requirements, errors, and anomalies — tasks previously relegated to manual labor. This approach doesn’t just result in significant cost reductions while ensuring accuracy and reliability. By implementing RPA in KYC, financial institutions can streamline operations while reducing risks and bolstering the overall customer experience.

RPA can also free up huge amounts of time for staff to focus on higher-value tasks — such as risk management and customer engagement. Ultimately, RPA is an indispensable asset for financial institutions, elevating efficiency and compliance within KYC frameworks.

Fraud detection

RPA has grown to be an increasingly popular tool in the arsenal against fraud in the finance sector. Its ability to streamline the analysis of vast datasets sourced from various channels enables real-time identification of irregularities and patterns, flagging potential fraud cases as soon as they appear while also automating routine tasks such as data collection, verification, and reporting.

Integrating RPA into fraud detection protocols means that financial institutions can reduce the risk of fraud and curb potential losses — all while improving the accuracy and speed of detection. RPA can help banks comply with regulations and build greater levels of trust among customer groups by safeguarding against fraudulent activities. Thanks to its advanced predictive analytics capabilities, RPA can identify patterns of fraudulent behavior early on and allow financial institutions to take prompt action to prevent further damage. This not only trims labor costs but also protects against the potential financial fallout from fraudulent activities, reinforcing the overall resilience of the financial ecosystem.

Client onboarding

Automating onboarding processes with RPA can significantly decrease the time and effort required for manual data entry, verification, and documentation throughout the client onboarding process. RPA bots can extract and verify customer information from multiple sources, conduct background checks, and automatically update customer records. Additionally, RPA facilitates customer data integration into existing systems, reducing errors and improving accuracy. By automating client onboarding processes, banks and financial institutions can substantially improve the customer experience, lower operational costs, and ensure compliance with regulatory requirements.

Financial statements and financial close

Robotic process automation is shaking up the banking sector by streamlining the preparation of financial statements and the financial close process.

Beyond simply saving time and effort, RPA boosts accuracy and consistency by eliminating manual errors and ensuring every piece of data is captured and recorded flawlessly. This not only streamlines operations, but also strengthens compliance with regulatory requirements — guaranteeing that financial statements are prepared and reported with high levels of attention to detail. Incorporating RPA into financial statement preparation and close processes is much more than just a smart move; it’s a real game-changer in the banking sector. For financial institutions, the use of RPA translates to heightened efficiency and accuracy — setting a new standard in operations and taking these organizations to the next level.

Financial planning and forecasting

RPA has been particularly beneficial for daily business functions, especially when it comes to financial planning and forecasting. By providing analysts with the tools necessary to swiftly process vast datasets, RPA makes room for more accurate predictions — boosting employee productivity and providing customers with quicker, more comprehensive services in a reasonable amount of time.

With features such as audit trail functions that allow detailed logging of events and machine learning algorithms that offer predictive analytics, robotic process automation improves accuracy and substantially reduces the risk of errors. It’s hard to count the benefits of using RPA for financial planning and forecasting. Still, most importantly, this tech empowers companies to make sound investment decisions and be confident in the security and reliability of their data. With RPA, it’s simple: the future of financial planning is more precise, efficient, and reliable than ever before.

Travel and expense processing

RPA is becoming increasingly popular in travel and expense processing thanks to its ability to automate the labor-intensive task of data entry into enterprise systems. This technology can handle everything from individual steps to entire processes in an employee’s expense claim journey — from submission to final payment. This level of insight generation and management at scale is nearly unattainable without the power of RPA-driven automation. Picture a form of tech that’s able to meticulously verify the accuracy of financial claims, allocate costs to the correct cost centers, and perform complex calculations — all with precision and speed. The benefits are remarkable: heightened accuracy in details, substantial reductions in costs associated with manual processing, and the ability to generate quick, insightful reports. RPA-driven automation means companies can focus on strategic growth rather than getting bogged down in tedious and time-consuming administrative tasks.

Account reconciliations

In banking and finance, account reconciliations are vital for ensuring both accuracy and regulatory compliance. Traditionally, this task involves matching bank statements with internal financial records like general ledger accounts and manually flagging any discrepancies for further review.

RPA, on the other hand, can identify and match transactions, verify balances, and reconcile exceptions — reducing manual labor, increasing accuracy, and improving compliance. This, in turn, leads to faster reconciliation cycles and better visibility into financial information.

Data management

Maintaining a regular and accurate data flow is essential for the finance industry. RPA provides a sophisticated solution to optimize data processing and data management procedures. It takes on the relatively dull tasks of validating, cleansing, merging, and consolidating databases and transforms what was once a manual, error-prone process into a streamlined, efficient operation. This technology integrates all necessary information from various databases into a single, cohesive platform.

With RPA, updating data becomes a breeze, providing businesses with timely, reliable information for better-informed decision-making. For financial services, this means a robust, efficient system that boosts accuracy and supports a wide range of different activities.

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How to implement RPA for your bank

Let’s face it: knowing where to start when implementing automation processes can be a relatively intimidating challenge. Firstly, you’ll need to identify those manual processes in dire need of automation. Think of the low-hanging fruit: the boring tasks and the time-consuming procedures — these are your prime candidates for RPA. Once you’ve pinpointed these opportunities, it’s time to arm yourself with the right tools tailored to your bank’s unique needs. Designing and building your bots requires a keen eye for detail, and you’ll need to take into account any quirks or inconsistencies in your operations and smooth them out for optimal RPA performance — a little like fine-tuning an engine for peak efficiency. If you decide to establish an RPA Center of Excellence within your organization, you’ll be able to provide your business with a backbone of ongoing support, proper funding, and a culture of continuous learning. With these considerations in mind — and the right support to guide you during this challenge — implementing RPA for your bank should become a relatively straightforward process.

Final note

There’s no doubt that robotic process automation is drastically changing the finance industry as we know it. We’ve already seen its impact across a number of other industries, and there’s no reason to believe that the banking sector will be any different. With an ever-growing demand for faster and more efficient services, RPA is the ultimate ally: providing a comprehensive solution to help financial institutions not just meet but exceed expectations — all the while driving down operational costs. As RPA continues to grow and evolve, we can only imagine the possibilities and benefits it will bring to bank staff and customers alike.

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