What is robotic process automation in banking?

Are you wondering ‘what is robotic process automation in banking’? Worry not. Read this insightful blog further to understand how the banking sector can fuel their growth by utilizing automated tools called Robotic Process Automation (RPA) in their organization.

Automation is the focus of many industries, and banking is surely one of them. Robotic Process Automation (RPA) is a cutting-edge technology that automates repetitive tasks in the banking industry, offering benefits such as increased efficiency, reduced costs, and enhanced customer experience. The application of RPA in banking operations is an effective way of enhancing process efficiency, using up resources effectively and ensuring that organizations are compliant to meet regulatory requirements and therefore become operationally excellent and competitive.

Robotic Process Automation (RPA) is emerging as a game-changer in 2024, especially in the banking and financial sector. With an estimated global market size of $26 billion by 2027, RPA is not just a trend but a strategic necessity for financial institutions. Nearly 80% of finance leaders have already adopted or are planning to adopt RPA, recognizing its potential to revolutionize banking processes.

Key Applications of Robotics Process Automation in Banking

Let’s discuss the key applications of RPA in the Banking industry. 

Debit Card Fraud Processing

In the context of banking, Robotic Process Automation (RPA) has been identified as helping provide an efficient means of identifying debit card fraud activities to prevent them from happening.

In terms of fraud detection, RPA actually allows for the analysis of transactions and suspicious activities in order to create an alert that will prompt a closer look at the issue. This results not only improves on the speed and efficiency that the process takes in identifying the frauds but also lessens the potential of losses on the end of both the banks as well as the customers.

By using RPA, banks can:

• Analyze transaction data from multiple sources to identify anomalies and potential fraud
• Automatically trigger alerts for suspicious activities, enabling prompt investigation and mitigation
• Reduce false positives by applying advanced algorithms and machine learning techniques
• Streamline the process of blocking compromised cards and issuing replacements
• Generate comprehensive fraud reports for regulatory compliance and risk management

Automated Bank Account Opening

Bank Account Opening is an important process that many banks have already automated and brought online. This is one of the crucial processes that people go by when they become a banking customer. This automation enhances account opening efficiency, accuracy of the information provided, and the overall customer experience due to the minimal time, and errors likely to occur as compared to manual intervention.

RPA helps in the accounting process of opening a bank account by replacing repetitive data entry, data checks, and documentary activities with robots. RPA enables banks to gather all the information required from the customer concurrently to perform relevant checks on their suitability to do business based on their due diligence standards and generate relevant documents for accounts expeditiously.

With RPA, banks can:

• Automatically gather customer information from various sources, such as online forms, ID documents, and credit reports (if needed)
• Perform necessary checks for compliance, risk assessment, and credit evaluation
• Generate account opening documents, including account agreements and welcome letters
• Seamlessly integrate with core banking systems to create new accounts
• Provide real-time updates to customers on the account opening status

Customer Servicing

The use of the RPA in customer service is extremely valuable for banks as it can automate replies to questions, as process requests from clients, and to manage account-related tasks.

It reduces frustration or boredom among the human agents, allowing them to address more complicated issues that customers may experience hence beating the odds for better service delivery and organization standards.

By deploying RPA in customer servicing department, banks can:

• Automate responses to common customer inquiries, such as account balances, transaction histories, and fee information
• Process customer requests for account maintenance, such as address changes, stop payments, and account closures
• Automatically generate and send account statements, notifications, and alerts to customers
• Escalate complex issues to human agents while providing them with relevant context and information
• Gather customer feedback and sentiment data to identify areas for improvement

Know Your Customer (KYC) Process

The Know Your Customer (KYC) process is a critical compliance requirement in banking, involving extensive customer data collection, screening, and validation.

RPA can streamline this process by automating various tasks, such as:

• Gathering customer information from multiple sources, including online forms, ID documents, and credit reports
• Performing necessary checks for compliance, such as screening against watchlists and sanctions databases
• Verifying customer identities using biometric data or document validation techniques
• Updating customer profiles with new information or changes in risk profiles
• Generating KYC reports for regulatory compliance and auditing purposes

Credit Scoring 

In the financial sector, assessing creditworthiness is a critical yet cumbersome process. Traditionally, this involves collecting vast amounts of data from various sources, analyzing it, and determining the credit score based on complex criteria. This manual process not only consumes significant time but also introduces the risk of human error, which can lead to incorrect credit scoring and affect decision-making.

RPA streamlines credit scoring by automatically gathering and processing applicant data using predefined algorithms. This automation ensures accuracy and drastically reduces the processing time, enabling quicker loan approvals and enhancing customer satisfaction by providing rapid responses to credit applications.

RPA can streamline the credit scoring process by automating various tasks, such as:

1. Gathering customer information from multiple sources, including online forms, ID documents, and credit reports
2. Analyzing credit history and financial data to determine creditworthiness
3. Applying predefined algorithms to calculate credit scores based on established criteria
4. Generating credit reports and recommendations for decision-makers

How Nected Can Help with RPA in Banking

A Low code tool like Nected can easily assist banks in automating various processes and tasks we discussed above to enhance efficiency, reduce errors, and improve overall operations.

To understand this, let’s take a use case example - Automating the Account Closure Process.

The account closure process in banks usually involves multiple steps, including gathering customer details, verifying account balances, calculating closure fees, checking the need to transfer account balances in any other account, generating documents, and notifying stakeholders. Now, you need to figure out what are the tasks and processes that the RPA system can do.

Deciding Tasks that Can Be Automated

• Fetching customer and account information from core banking systems
• Verifying account balances and outstanding payments
• Calculating account closure fees based on account type and balance
• Generating account closure forms, letters, and notifications
• Sending notifications to customers and relevant departments
• Archiving account closure records for compliance and audit purposes

Now, once you decide what tasks to automate, Nected can help automate these tasks by providing an easy-to-setup RPA solution.

The workflow starts with setting up input parameters. Depending on the organization, this step may look like this:

• Defining required customer and account details as input parameters for the RPA workflow
• Setting up rules for calculating closure fees and penalties based on account type and balance
• Configuring parameters for generating closure forms and letters with dynamic data

You can use Nected hassle-free to automate the account closure process within your organization. Sign up now and explore the capabilities of this No code low code RPA solution. By leveraging Nected's RPA capabilities, banks can automate any manual processes to reduce human intervention and improve efficiency.

Conclusion

In conclusion, Robotic Process Automation (RPA) is revolutionizing the way banks operate by automating key processes like debit card fraud processing, account opening, customer servicing, and the Know Your Customer (KYC) process and many more. With Nected's RPA platform, banks can streamline operations to increase efficiency, reduce errors, ultimately improving customer experience and compliance with regulatory requirements.

It is therefore appreciable that through automation technology, banks would continue to remain competitive and meet the needs that the new world is presenting. Nected is a user-friendly platform that empowers banks through which they can automate several tasks as much as possible; hence this ensures that the banking experience of customers is as smooth as can be.

FAQs

Q1. What is Robotic Process Automation (RPA) in banking?

RPA in banking refers to the use of software robots to automate repetitive, rule-based tasks, freeing up human resources for more strategic and customer-facing activities.

Q2. How does RPA benefit banks?

RPA improves the performance of banks by offering an enhanced rate of accuracy, less error margin as well as providing better customer satisfaction.

Q3. What processes can be automated in banking using RPA?

RPA can automate various banking processes, including account opening, loan processing, KYC, fraud detection, and account closure.

Q4. Is RPA secure for banking operations?

Yes, RPA is safe for banking operations