There is a heightened focus today across the global banking sector on leveraging new-age technologies to stay ahead in a highly competitive marketplace. This is largely because the banking sector has been under a great deal of stress to optimize costs, boost productivity, address the shortage of skilled resources as well as deal with the ever-increasing employee costs. Further, the sector is grappling with other issues such as payment of regulatory fines and slow working procedures that have resulted in a significant amount of customer dissatisfaction. All these have posed roadblocks for the banking sector to offer reliable and more secure banking services to its customers.
The rapid shift from traditional banking to digital over the last few years or so has been accelerated by the growing need for banks to look for cost-effective and fast alternatives with their larger objective of accelerating operational efficiency through an improved customer experience. Robotics Process Automation (RPA) is being seen as the game-changer for the sector as it provides banks with the much-needed alternative to enhance their competitive edge.
The Covid-19 pandemic may have thrown normal life out of gear but it has led to a proliferation of digital banking services, which is poised to be the future of the banking sector, wherein RPA is the enabler banks need to offer low-cost and high-quality services without compromising one bit on security. According to a study conducted by McKinsey, up to 25% of banking processes are expected to be automated over the next few years – what’s more, RPA software for the banking sector will post a business revenue of $900 million by 2022. These projections indicate the impact Robotics Process Automation will have on the sector and help banks not just augment their operational efficiency but also build goodwill among their loyal customers.
So why has Robotics Process Automation generated so much buzz for the banking sector? Well, it can be attributed to the myriad benefits this automation technology offers. RPA has the potential to swiftly execute customer-facing as well as back-office tasks, ranging from sending emails, opening & closing applications, and transmitting information from one system to another. It obliterates manual, repetitive work that reduces the productivity of banks, minimizes the occurrence of risks, and engages customers with real-time scenarios, helping deliver an augmented customer experience. The best part about embracing RPA is that it requires minimal investment as banks do not need to modify their underlying legacy IT infrastructure.
Challenges in Adoption of RPA
Of course, there are challenges that come in the way of RPA adoption such as resistance to change, process standardization & organization misalignment, compatibility with legacy infrastructure, and lack of legal regulations governing automation. But the benefits of RPA far outweigh these challenges.
How Robotic Process Automation Can Drive Value for Banks?
Let us take a deep dive into how RPA can help scale up the efficiency of the banking sector.
Driving Customer Service to the Next Level
A large chunk of customer grievances across various customer service centres is repetitive in nature. The sight of long wait times and delays on the part of banks to provide information can be frustrating for customers. RPA can help address customer queries with a quick turnaround time. It helps banks save time and effort and also provides customers with the best possible solution.
Improvement in Compilation Procedure
Banks typically have the onus to strictly adhere to the rules and regulations, monitor the activities of their staff, report issues, and initiate steps when needed to prevent money laundering. Adhering to every single rule can be a tedious exercise, but RPA drives a smooth process by collecting a large amount of data and compiling it automatically, aiding banks in saving time and freeing up employees who carry out such mundane tasks.
Efficient Report Automation
A key aspect of banking operations is to present an accurate and error-free report for all stakeholders. RPA enables efficient report automation by collecting information from multiple platforms, confirming their authentication, and then producing the information in a specific format as per the banks’ needs.
KYC (Know Your Customer)
The KYC compliance is a long-drawn-out process for banks and slow and delayed processes can leave scope for a high level of customer dissatisfaction. According to a study conducted by Thomson Reuters, banks shell out around $384 million annually on KYC compliance. This explains why banks are turning towards RPA that can aggregate customer data, evaluate and validate it, and helps banks wrap up the KYC process in a shorter duration with fewer errors.
Effective Fraud Detection
The arrival of RPA has led to a significant increase in fraud detection, which makes it exceedingly challenging for banks to keep a check on every fraudulent transaction. RPA bots are capable of identifying new frauds by effectively leveraging the ‘if-then’ algorithm. RPA software completes the overall review within a few minutes and can identify even a minute of fraud in the system. It can also assess customer risks and warns them via notification to prevent further fraud attacks on their banking services.
RPA Road Ahead
There is no denying the fact that Robotics Process Automation has driven a significant improvement in the services of the banking sector and enabling banks to deliver an experience that is high on customer satisfaction. Of course, RPA can be a costly investment initially but it offers great long-term value, enabling banks to effectively execute smart banking operations and achieve good ROI within a few months.
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