7 RPA Use Cases in Financial Services and Banking

RPA in Financial Services and Banking

In today’s digital-first market with stiff competition, financial services institutions need to continuously invest in new technologies to streamline their operations and remain at the forefront of the ever-changing market dynamics. They need to deliver excellent customer experiences while maintaining maximum security and compliance. That is where robotic process automation (RPA) comes in.

RPA is revolutionizing the business world and is shaking up how things get done. 

According to a report published by Zinnov, RPA is expected to grow at a rate of 47% annually to reach a valuation of $4 billion by the year 2024. 

It has the potential to bring digital disruption and help financial organizations achieve their goals, optimize customer experiences, and speed things up. RPA can help bring intelligent results by empowering organizations to work faster, smarter, and better. This allows them to focus entirely on processes that matter the most while automating mundane and routine tasks.

RPA can also help –  

  • Simplify complex processes
  • Reduce costs
  • Improve accuracy
  • Enhance compliance
  • Improve security
  • Improve service
  • Effective resource utilization
  • Improve data analytics

But what are the specific use cases of RPA in the financial services and banking industry? 

Let’s take a look – 

1) Using RPA for ACH stop payments 

Automated clearing house (ACH) stop payments are a common transaction between all banks. But these are usually manual processes that take up a lot of time. Banks manually process thousands of ACH stop payments in a day, thus making it a laborious task.

This is where RPA can help. It can easily automate this manual and error-prone activity and save banks a lot of time. An RPA bot can do everything that a human does but with increased efficiency and reduced errors.

While a human resource can take about several minutes to process a single stop payment, a bot can do the same in much lesser time, and that too with zero errors. 

2) Using RPA for reporting wire transfers 

For every bank, it is important to post incoming and outgoing fund transfers to the federal reserve. But this is usually a manual process and needs an employee to check Fedline for inbound or outbound transfers.

RPA can automate this manual activity through browser automation and data scraping. This automatically pulls payment information from the core banking system and posts it to the Fedwire Funds Service. This not only saves banks a lot of time and money but also gives them the option to replace expensive human counterparts for doing the same task.

3) Using RPA for monitoring fraudulent activity

RPA can be a great tool for tracking fraudulent activities from different accounts. It isn’t the most efficient or cost-effective way to use a human resource for watching every single account or tracking activity all day. RPA can thus be a great alternative to detect frauds, flag suspicious activities, and notify concerned authorities in case of fraud. 

Some ways in which RPA can help mitigate fraud risks are – 

  • RPA can reassess current processes to identify uneven patterns indicating fraudulent activities or piracy.
  • It can enhance trade monitoring and evaluate transactions for potential frauds.
  • Banks usually block accounts temporarily in case they suspect any suspicious activity. But many of these accounts remain blocked until someone manually unblocks them. RPA can effectively identify accounts and remove restrictions automatically.
  • RPA can enable automatic threat detection.

4) Using RPA for customer service

Banks deal with multiple customer queries throughout the day. It can become difficult for the customer care team to address each query while also delivering quality service. The large turnaround times also create a big problem.

RPA helps resolve most of these pain points. Banks can easily automate bots to take up low-priority queries from customers, thus freeing up the customer service team to focus on high-priority queries.

It can also reduce the time taken to address customer queries as well as the waiting period. This all leads to improved customer service and helps increase customer loyalty.

5) Using RPA for trade settlement

RPA technology is also being widely used for trade settlement procedures. Banks can use RPA to optimize their trade settlement processes and complete tasks like clearing trades, resolving discrepancies and carrying out order research.

A human resource can take up anywhere from 5-10 minutes for reconciling a failed trade. A software robot can do the same task in a quarter of a second.

Using RPA also frees employees to dedicate more time on operational quality control and outliers.

6) Using RPA for improved compliance

Since banking is a heavily regulated sector, it becomes difficult for banks to comply with each compliance rule. 

But as per a report by Accenture, 73% of compliance officers believe that automation tools like RPA can be crucial in improving compliance.

RPA can make it easier for banks to adhere to the compliance rules. The high accuracy and 24/7 availability of RPA solutions can improve the quality of the compliance process. RPA tools can be used to collect information about transactions and analyze the quality of specific transactions. RPA can then flag suspicious issues and instantly reach out to the compliance department. It helps uphold the reputation of banks.

7) Using RPA for audit report automation

RPA can be used to pull audit reports on a regular basis. Some of the audit reports that can be created using RPA include  

  • BSA/AML audits
  • Know your customers (KYC) for screening and validating customer data
  • Community reinvestment act (CRA)

For example, when dealing with KYC, banks need at least 150 to even 1000+ FTEs to perform customer checks. As per Thomson Reuters, some banks even spend up to $500 million per year on KYC compliance. RPA can help banks in reducing costs and duration for performing KYC compliance on customers.

Conclusion

The list of use cases shared above only scratches the surface when it comes to RPA utilization in the financial services and banking industry. There are countless other use cases that can significantly improve value, reduce time, and cut down costs. 

If you are also looking at implementing RPA solutions, then Wissen can help. Get in touch with us at hello@wissen.com 

 

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