As the digital age continues to impact the banking sector, new solutions with artificial intelligence (AI) are able to combat the latest changes and keep pace with changing customer needs. Robotic process automation (RPA) is one of these solutions, and it’s being adopted more and more frequently in banking.
What is robotic process automation?
Robotic process automation, also known as “robot process,” helps automate tasks that are repetitive and involve a lot of manual work. Robotic process automation is a form of artificial intelligence that helps computers or robotic devices complete certain tasks to reduce the amount of time and resources needed to complete them.
RPA works with software and/or hardware that enables it to record and recognize tasks. Once recorded, RPA can then automatically carry out these tasks. A robot can be programmed to perform a task that normally takes the help of a human being.
Although the technology has been around for a while, it’s only recently that it’s been adopted by large organizations. RPA is a way to avoid hiring more people and to maintain the number of employees that are required to complete the same workload.
Benefits of RPA in banking
The ability to automate repetitive tasks can help banks improve their efficiency, as well as reduce costs. RPA can also help improve customer service by providing banks with 24/7 access to customers.
RPA can also help reduce the risk of errors by automating processes that are prone to mistakes. RPA can help reduce the amount of manual work that is needed, resulting in more time spent on strategic tasks.
Why use RPA in banking?
Many of the areas where RPA is being used in banking are where it can bring the most benefits, including:
- Automated underwriting – RPA can be used to automate the underwriting process, which can reduce the time it takes to qualify borrowers and reduce the risk of human error.
- Automated processing – RPA can be used to automate loan servicing, including sending notifications and recording actions that are taken by other staff members. This can help reduce the risk of errors and increase efficiency by eliminating a lot of manual work.
- Streamlining onboarding – RPA can be used to automate onboarding, which can help reduce the time it takes to train new employees and reduce the risk of human error.
Risks of using RPA in banking
While RPA has a lot of benefits, it also comes with some potential risks that should be taken seriously. These risks include
- Risk of failure – Because RPA relies on automation, it can potentially result in failure if the right processes aren’t followed.
- Risk of misuse – It’s important to remember that RPA doesn’t replace humans. It complements human work, so the risks of human error are still there.
- Risk of fraud – RPA can open up the possibility of fraud, particularly in areas like automated underwriting. The right safeguards need to be in place to prevent this.
Where is RPA currently used in banking?
An important first step in understanding the future of RPA in banking is to understand where it’s being used today. RPA is beginning to see adoption in a number of areas of banking, including
- Automated underwriting – Fintech startups are using RPA to help automate the underwriting process. This can reduce the time and risk of human error that is often associated with this process.
- Automated processing – RPA can also be used to automate certain aspects of loan servicing, such as recording actions taken by other bank staff members. This can help increase efficiency and reduce the risk of human error.
- Automated onboarding – RPA can also be used to automate onboarding, which can help reduce the time it takes to train new employees and open up the opportunity to work remotely.
Where will RPA be used next?
As RPA continues to show promise in the banking sector, we’re seeing a growing number of banks and financial institutions adopt it for different use cases. In the future, we can expect RPA to be used in a wide range of areas, including
- Customer support – RPA can help banks improve their customer support by automating tasks that are performed manually. RPA can also help reduce the risk of human error, like incorrect emails, missed calls, and other forms of communication.
- Underwriting – RPA can also improve the underwriting process by automating the process of evaluating borrowers and reducing the risk of human error associated with this task.
- Onboarding – RPA can also be used to automate onboarding, which can help reduce the time it takes to onboard new employees and increase the speed of the process.
Conclusion
Robotic process automation is a relatively new technology, but it’s showing promise in the banking sector. It can help automate tasks that are repetitive and involve a lot of manual work, like the underwriting process, and can also provide 24/7 access to customers.
It can also help reduce the risk of human error by automating processes that are prone to mistakes. The future of RPA in banking is bright, as the technology continues to evolve and bring benefits to a growing number of financial institutions.
