Intelligent Automation in the Banking Sector

automation in banking sector

It will also assist in lowering maintenance and infrastructure costs for IT. That is one major factor why process automation can yield particularly significant results in banks. Banks were the leading edge also in implementing RPA (Robotic Process Automation) in their processes, which is a commonly used tool for process automation.

  • Now it’s time to recognize and undertake new challenges, implementing modern automation strategies as a continuation of how banks have optimized operations and improved efficiency and reliability over the years.
  • Intelligent automation in the contact center significantly reduces the time required to identify the customer and perform repetitive activities within a multi-channel environment.
  • Improve the speed and accuracy of sanctions checks to improve compliance, reduce risk, and deliver faster cash cycles to customers.
  • Artificial intelligence (AI) automation is the most advanced degree of automation.
  • The greater industry’s adoption of digital transformation is reflected in this cultural shift toward a technology-first mindset.
  • Hence, it is highly unlikely that a few customer complaints remain unopened or unaddressed.

While most RPA bots rely on rule-based decision-making, it does not mean that they can’t adjust to reasonable process variability. That is why it is imperative for teams to iterate bots based on their performance in different scenarios. The RPA implementation starts with designing a detailed framework for adopting use cases, which involves establishing both process and technology requirements and defining success metrics.

Applications of RPA in Banking

Faster front-end consumer applications such as online banking services and AI-assisted budgeting tools have met these needs nicely. Banking automation behind the scenes has improved anti-money laundering efforts while freeing staff to spend more time attracting new business. In order to improve the effectiveness and efficiency of their operations, the banking sector continues to place a strong focus on digital transformation. Thus, Robotics Process Automation (RPA) is quickly becoming one of the most popular tools for banks looking to automate their processes. Along the years, we have helped some of the largest banks in Finland and Vietnam achieve cost savings, increase operational efficiency and productivity through RPA. For example, our customer POP Bank has been using robotics since 2017 to streamline their operations, develop their customer service and improve the quality of processes.

automation in banking sector

Even worse, such an event compromises your company’s reputation—and in banking, trust is everything. Traditional RPA merely acts as the foundation of an organization’s automation plan. As opposed to attended bots waiting, there are cognitive bots that can give end-to-end complex processes a facelift. Emerging technologies like AI, OCR, and analytics are in the core processes.

Examples of How Process Automation Can Improve Efficiency

It provides banks with the opportunity to eliminate errors in critical processes, share data between disparate systems seamlessly and make every employee’s contribution more valuable to the organization. So, banks and financial institutions must adapt a strategic, and not tactical approach. Banks and other financial institutions are currently under intense pressure to reduce expenses and increase productivity.

After the most tedious tasks are automated, you can move at your own pace towards full automation. Radius Financial Group relied on RPA in banking to accelerate mortgage processing. Before RPA, loan processors would feel overwhelmed handling 30 loans in their pipeline, but now with their robotic assistants, they feel comfortable managing up to 50 loans without feeling stressed. Since Societe General Bank Brazil incorporated RPA for report generation into their processes, they automated a workflow that previously demanded six hours of employees’ working days.

The Time is Now: Digital Transformation in Financial Services

Introducing bots for such non-automated processes can reduce processing costs by 30% to 70%. Several processes in the banks can be automated to free up the force to work on further critical tasks. As the world forges ahead with transformations in every sphere of life, banks are setting themselves up for continued relevance. Firms that understand and implement IA in time can be certain of sustained success, while those that haven’t must choose relevant automation tools to help them stay ahead of evolving customer expectations. Information and communication technology ICT is at the centre of the global change curve. It has continued to change the very banks and their co-operative relationship are organized worldwide and the variety of innovative devices available to enhance the speed and glorify of services delivery.

automation in banking sector

Some companies that implemented UiPath RPA report agent productivity increases of even 70%. There are ample opportunities for robotic process automation in the banking industry, many of which have not been fully explored. However, the mentioned benefits and opportunities can serve as a perfect eye-opener for banks that are still hesitant to completely resign their traditional approaches to banking. Nevertheless, the changing dynamics of the market will eventually bring more and more banks under the RPA umbrella. Banks that fail to leverage the change effectively will eventually fade away in the face of competition. Money laundering is undoubtedly the major area for concern, and anti-money laundering compliance cost $31.5 billion for financial institutions in both the US and Canada in 2019.

Why do banks need banking automation?

Instead, financial services and banking companies that are more advanced in their digital transformation journey spread BPA across all the divisions with the common goal of improved efficiency and performance. Business process automation is one of the cornerstones of digital transformation initiatives happening across the entire financial services industry. Credit card application handling is another use case where RPA in the banking industry can bring sensational benefits. Thanks to effective automation, organizations become empowered to issue credit cards within hours.

  • Traditional banks can also leverage machine learning algorithms to reduce false positives, thereby increasing customer confidence and loyalty.
  • Then, the bots extract and validate the details relevant to a particular process, fast and without errors.
  • Both of them perform easy monotonous tasks, which are time-consuming for human employees.
  • According to EY’s “Global Banking Outlook 2018,” 62% of global banks expect to be digitally mature in 2020, compared with just 19% in 2018.
  • It is pivotal for banks & finance companies to shortlist the right processes followed by assessing them based on overall impact.
  • Here RPA also provides a solution with regulatory monitoring and alerts sent when an update is announced.

Moreover, the increasingly saturated banking and financial sector puts tremendous pressure on traditional banks to continually evolve, remain competitive and provide exceptional customer experiences. Automating the report-generating process entails a variety of operations such as optimizing data extraction from both internal and external systems, developing reporting templates, reviewing, and reconciling reports. Many banks and financial service providers have adopted RPA to automate these report-generating operations. Optical Character Recognition (OCR) technology can verify data and digitize paper documents to form invoices. While robots are busy with these repetitive tasks, bank managers can focus on the issues that require an individual approach.

Account Closure Process

To further enhance RPA, banks implement intelligent automation by adding artificial intelligence technologies, such as machine learning and natural language processing capabilities. This enables RPA software to handle complex processes, understand human language, recognize emotions, and adapt to real-time data. Banks deal with an avalanche of regulatory requirements when onboarding new clients.

How is AI useful in banking?

Artificial intelligence in financial services helps banks to process large volumes of data and predict the latest market trends, currencies, and stocks. Advanced machine learning techniques help evaluate market sentiments and suggest investment options.

Customers no longer have to wait for weeks before their credit cards are approved. Automation improves efficiency, accelerates processes, and eliminates the risk of human error. Experts suggest that by using automation, organizations can eliminate up to 90% of their operational costs. Automation can significantly alter accounting operations; however, it can hardly substitute humans. Drive down operational costs by automating manually intensive processes requiring reconciliation. Digital workers retrieve and compile data from multiple systems, perform rules-based aggregation and reconciliation, and take actions to resolve simple breaks.

Best banking processes to automate

Regardless of the number of requests to process and tasks to complete, RPA bots’ efficiency and accuracy stay the same, allowing banks to scale operations on demand. When they could not process the amount of loans using conventional methods of loan request processing, UBS turned to RPA. In collaboration with Automation Anywhere, the bank implemented RPA just in 6 days, resulting in a reduction of request processing time from minutes to 5-6 minutes. The appeal of RPA systems is that they can be seamlessly integrated into existing systems and cause minimal disruption to the ongoing workflows. RPA automates rule-based processes such as setting up, validating, gathering, and compiling customer data. The ever-strengthening regulatory scrutiny around KYC and rising compliance costs, encourages banks to turn to automation.

What is an example of automation in banking?

Other examples where intelligent automation can be applied include closing accounts, sending notifications, blocking accounts, delivering security codes, and managing customer transfers to help improve operational efficiencies and the customer experience.

In the right hands, automation technology can be the most affordable but beneficial investment you ever make. Once you’ve successfully implemented a new automation service, it’s essential to evaluate the entire implementation. Decide what worked well, which ideas didn’t perform as well as you hoped, and look for ways to improve future banking automation implementation strategies.

How automation is changing the banking industry?

The introduction of technologies such as ATMs, mobile banking apps, internet banking, etc. is some of the most common examples of automation in the banking industry. Automation is prominent not only in the areas of financial transactions but also in operations, marketing, human resource operations, and many more.

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