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Revolutionizing the Banking and Finance Industry with RPA

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written byTech Partnerships & Collaboration Expert, EPAM Startups & SMBs

Anush has a history of planning and executing digital communications strategies with a focus on technology partnerships, tech buying advice for small companies, and remote team collaboration insights. At EPAM Startups & SMBs, Anush works closely with subject matter experts to share first-hand expertise on making software engineering collaboration a success for all parties involved.

Anush has a history of planning and executing digital communications strategies with a focus on technology partnerships, tech buying advice for small companies, and remote team collaboration insights. At EPAM Startups & SMBs, Anush works closely with subject matter experts to share first-hand expertise on making software engineering collaboration a success for all parties involved.

Billions of financial transactions are generated daily, and together with the need to manage significant stores of data, banks can no longer depend on manual processes to complete recurring, routine back-office tasks and functions.

One of the most significant methods that banks and other financial institutions can adopt is robotic process automation (RPA) to boost productivity and increase efficiency while also reducing costs and errors.

Still, what is the RPA meaning in finance? In this article, we answer the question of what RPA is in finance and explore its benefits, uses, use cases, and how you can implement it as a form of business process automation.

What is robotic process automation in banking and finance?

Robotic process automation in banking and finance is a form of intelligent automation that uses computer-coded software to automate manual, repetitive, and rule-based business processes and tasks.

The software, considered a bot or robot in this context, utilizes machine learning (ML) and artificial intelligence (AI) to carry out tedious tasks that people would otherwise complete, like data entry, transaction analysis, and document reviews.

Many of the core functions within the finance and banking industry fit the criteria for automation because they are:

  • Repetitive
  • High volume
  • Rule-based
  • Require urgent responses continuously
  • Susceptible to human error
  • Marked by seasonal fluctuations and unpredictable surges

Benefits of RPA in banking

RPA bots are designed to complete mundane tasks accurately and quickly. The application of robotic process automation technology in the banking sector has yielded a wide range of benefits, including:

1. Minimized human factor

Implementing robotics process automation in financial services dramatically reduces or eliminates the need for human involvement in mundane and repetitive tasks. This greatly reduces the likelihood of human errors together with unconscious bias and subjectivity that could contribute to skewed decision-making or increase risk.

2. Lower costs

RPA solutions allow banks to reduce manual tasks. This leads to significant timeline acceleration and frees up employees who can then focus on higher-value operations. This leads to massive cost savings, boosting profitability and improving the business's overall margins.

3. Sped-up processes

Financial services robotic process automation accelerates financial processes by completing tedious tasks at a fraction of the time it would take a human employee. This enhanced speed enables banks to improve operational agility, respond swiftly to customer demands, and gain a competitive edge in the market.

4. Increased efficiency

RPA bots make it easy to automate tasks, which helps drive efficiency in regular business practices. In certain cases, bots can replace human workers entirely, which allows the bank to redeploy its workers into other areas. In some scenarios, roles that already exist could be supported by robotics, which assists in expediting timelines, reducing human errors, and improving productivity.

5. Enhanced customer experience

A bank’s reputation heavily relies on maintaining high-quality customer service. As such, it is highly beneficial for a bank to integrate robotic process automation technology into its service channels to meet customers’ needs and drive satisfaction effectively.

For instance, customers can use RPA-enabled chatbots during out-of-office hours, which helps them resolve their issues faster while also reducing the volume of everyday customer queries that would be managed by human staff during business hours.

RPA solutions are also instrumental in speeding up the application processing times and increasing customer satisfaction.

6. Enhanced regulatory compliance

Banks and other financial institutions must ensure compliance with relevant industry and government regulations. Robotic process automation in the banking industry can strengthen compliance by automating the process of conducting audits and generating data logs for all the relevant processes. This makes it possible for banks to avoid inquiries and investigations, limit legal disputes, reduce the risk of fines, and preserve their reputation.

7. Integration

RPA software can be seamlessly integrated within the bank’s existing tech stack, which allows the bank to pull data from various systems to inform decision-making, define processes, and identify opportunities for improvement.

8. Ease of use

The RPA tool generally includes an intuitive and simple user interface (UI) and out-of-the-box capabilities. This means the staff does not need to configure or code the solution manually. Additionally, results are typically presented in an actionable and digestible form.

9. Scalability

Robotic process automation for finance can be deployed at scale, meaning it can meet the bank’s growing needs or address surges in demand without creating a backlog.

10. Employee satisfaction

Human employees can focus on higher-value tasks once RPA bots have taken over to complete repetitive and mundane processes. This helps drive employee workplace satisfaction and engagement as people can now spend their time doing more interesting, high-level work.

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What is RPA used for?

RPA in finance and accounting is utilized in various financial processes, including:

Accounts reconciliation

No matter how big or small a financial institution is, account reconciliations are inevitable. The process of comparing external statements against internal account balances is needed to ensure that the bank’s financial reports reflect reality.

Account reconciliation is time-consuming in terms of collecting and comparing data and receiving approvals. RPA solutions resolve all the issues associated with reconciliation, including inter-banks reconciliation.

RPA software can be trusted to compare records quickly, spot fraudulent charges on time for resolution, and prompt a responsible human party when an anomaly arises.

Financial statements

A robotic process automation bank can easily prepare updated financial statements as frequently as needed. Business leaders can act swiftly and make informed decisions when they have the most up-to-date financial information.

In addition, before moving to the next period, banks must procure accurate financial statements at the end of each month. RPA in financial services reduces this process to just a few minutes, which otherwise usually takes weeks.

Invoice processing

Processing invoices requires consistency, accuracy, and timely execution. However, without automation, achieving this level of perfection is almost impossible.

For example, manual invoice processing may result in operational lags in accounts payable. Financial institutions use RPA to automate invoice processing, including verifying, receiving, and paying invoices.

Automating accounts payable processes with RPA boosts Days Payable Outstanding (DPO). The bot streamlines purchase order entry, vendor verification, expense compliance audit, and payment reconciliation.

Data entry

Banks operate with big data in various forms and systems. They use RPA automation to help key in, move, and transform data across systems to conduct financial analysis, execute repetitive manual processes, and generate valuable reports.

Data is a paramount asset within the banking and finance industries, but it may prove useless if it’s hard to access or separate. RPA bots can use the institution’s collected data to service customers, answer questions, and make decisions.

Compliance reporting

The financial industry remains one of the most seriously regulated ones in the world. Banks must compute expected credit loss (ECL) frequently, perform post-trade compliance checks, and prepare a wide array of reports.

Additionally, compliance officers spend almost 15% of their time tracking changes in regulatory requirements.

Finance robotic process automation bots can automatically gather data from disparate sources, including government websites, federal bodies, and news outlets, and then input the collected information into the bank’s internal system following data structuring guidelines. This dramatically speeds up the process and lowers its costs.

Reports

Creating reports for banks can require highly tedious processes like copying data from computer systems and Excel. RPA bots can lessen the burden of this process.

Each department in the banking and finance institutions has its records of transaction journals. Reconciling and consolidating these journals can be a nightmare. But, a configured RPA robot will handle this task.

Order to cash

RPA bots automate the order-to-cash process by streamlining order processing, invoicing, payment processing, and collections. By automating these routine tasks, RPA accelerates cash flow, enhances customer satisfaction, and improves operational efficiency.

Procure to pay

Onboarding new suppliers is a key step in inventory management. Banks can easily configure an RPA bot to handle supplier vetting, including pulling credit reports, handling tax data, and more.

Banks leverage RPA to create more defined workflows and link their inventory portal together. An RPA bot can track price fluctuations across suppliers and flag the best deal at pre-set time intervals. They are also used to validate specific contract data.

Tax reporting automation

Banks and financial institutions that operate nationwide or globally comply with several tax regulations. They use RPA bots with their tax compliance software to reduce the risk of non-compliance. RPA robots create a tax basis, gather data for tax liability, update tax return workbooks, and prepare and submit tax reports to the relevant authorities. Automating such finance tasks saves them from legal issues and spares a lot of time.

Accounts receivables

Proper management of accounts receivables is of utmost importance because it is directly related to cash flow. Bank employees spend much time tracking payments and filling in information within disparate systems.

There is also a high error margin if a single record is incorrectly entered, and it will affect payment. Because of this, RPA bots can automate the tracking, sending, and creation of invoice payments.

Other finance and accounting processes

RPA in banking industry operations can be adapted to automate various finance and accounting processes, such as expense reporting, payroll management, and financial forecasting, leading to improved service delivery and cost savings.

RPA use cases from across the industry

Some of the well-known companies that have successfully implemented robotic process automation in banking industry include:

Zurich Insurance

Zurich Insurance is a leading global insurance company. It implemented RPA in its policy issuance process, and this resulted in significant time savings and the elimination of human errors.

Postbank

Postbank is one of the leading banks in Bulgaria and it adopted RPA to streamline its loan administration processes. The loan administration tasks that Postbank automated include report creation, customer data collection, gathering information from government services, and fee payment processing.

Caixa Geral de Depositos

CGD is Portugal's largest and oldest financial institution and has an international presence in 17 countries. When implementing RPA, they started with the automation of simple back-office tasks and afterward gradually expanded the number of use cases.

KAS Bank

This is an independent Dutch bank that was founded over two centuries ago. The bank successfully implemented RPA to solve one of modern banks' most common problems: high operational costs. Not only did RPA implementation reduce costs, but it also improved the quality of the bank’s business processes.

UBS

UBS is a multinational investment bank that is present in more than 50 countries. UBS implemented RPA in order to process the unprecedented spike in the number of loan requests that all investment banks faced after the Swiss Federal Council let commercial companies apply for loans with zero interest during the pandemic.

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How we can help your organization implement RPA

EPAM Startups & SMBs is backed by EPAM’s Intelligent Automation Practice implementing RPA and cognitive automation solutions to aid in digital banking transformation.

With 15+ years of BPM, robotics and cognitive experience and 1,000+ certified professionals on board, we’re also partners to market-leading automation platforms such as UiPAth, Pega, WorkFusion and more.

Our range of RPA implementation services for banking and financial services institutions follows best practices in custom software development and spans:

  • RPA readiness assessment
  • Strategy and technology consultation
  • Business process discovery, design and re-engineering
  • Document processing automation (OCR)
  • Robotic process automation
  • Machine learning and cognitive analytics
  • Virtual assistants (chatbots), and much more

In the early RPA adoption stages, we help to assess your organization’s readiness, draft a tailored action plan, walk you through design and planning stages, and then go on to implement the end-to-end engineering solution. Post-implementation stages include ongoing support and maintenance as well as business value monitoring.

Outsource software development to EPAM Startups & SMBs to integrate RPA into your processes with a knowledgeable and experienced technological partner.

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Anush_Dilanyan.jpg
written byTech Partnerships & Collaboration Expert, EPAM Startups & SMBs

Anush has a history of planning and executing digital communications strategies with a focus on technology partnerships, tech buying advice for small companies, and remote team collaboration insights. At EPAM Startups & SMBs, Anush works closely with subject matter experts to share first-hand expertise on making software engineering collaboration a success for all parties involved.

Anush has a history of planning and executing digital communications strategies with a focus on technology partnerships, tech buying advice for small companies, and remote team collaboration insights. At EPAM Startups & SMBs, Anush works closely with subject matter experts to share first-hand expertise on making software engineering collaboration a success for all parties involved.

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