Technological innovations are constantly being explored by various industries in order to remain competitive in the globalized world. Robots are replacing humans in workplace to carry out tasks which are repetitive and mundane. Robotic Process Automation (RPA) technology allows employees to configure computer software or a robot to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. The Robotic Process Automation (RPA) is highly considered as an essential in finance industry to provide best possible user experience to its customers. According to Grand View Research, the global robotic process automation market size is expected to reach USD 10.7 billion by 2027, expanding at a CAGR of 33.6% during the period 2020 to 2027. Major banks like Citibank, Bank of America are using robotics to provide superior service and security. For instance, Bank of America has introduced Erica, a chatbot which provides that provides financial guidance using predictive analytics and cognitive messaging.
Source: Deloitte Survey
How RPA helps finance industry?
According to a report by Capgemini, financial service industry could by 2020 reap up to $512 billion by deploying the right combination of Robotic Process Automation, business process automation and Artificial Intelligence (AI). On-average, over 35 percent of financial services firms have seen a 2 to 5 percent increase in top-line growth from automation, with faster time to market and improved cross-selling. According to Gartner, activities like General accounting operations and Financial controlling & External reporting are highly automatable.
1- High-volume transaction processing
RPAs allow financial service companies to automate the processing of high-volume transactions with high accuracy. The companies can operate complicated financial tasks efficiently and removes the potential for human error.
2- Regulation and compliance
Several aspects of regulation and compliance operations can be enhanced through the implementation of RPA. It can reduce or eliminate time consuming processes of collecting, compiling and summarizing large amounts of data. RPA has the capability to pull and aggregate different source of data from large databases. Moreover the technology makes it easier to document and improve the compliance process.
3- Reduces cost and saves time
According to a survey by Accenture, implementation of robotic process automation in financial service industry offers the potential to reduce cost up to 80%. For instance, Bank of NY Mellon Corp. has improved its processing time by 88% by investing heavily in this technology for performing tasks such as transferring funds. The funds transfer bot alone saved the company $300,000.
4- Customer interaction Management
The development of chatbots has opened up new arenas for customer engagement and new ways of carrying out business in the form of conversational commerce with the customers. The banking institutions are adopting chatbots to provide 24*7 support to customers. As the industry is prone to customer queries, chatbots are of great help to guide the customers. According to a research by Juniper, 826 million hours would be saved by banks with their chatbots deployment by 2023.
5- Fraud detection
Financial industry is more prone to fraud and cyber-attacks. Fraudulent transactions using Debit and credit card frauds are happening all over the world. Combatting fraud through traditional methods has become inflexible and lacks real time analysis. Adopting RPA along with artificial intelligence can provide end to end solutions by performing series of checks and balances to determine any anomalies or identifying patterns of fraudulent activities. Moreover, the technology helps in analyzing the data in real time and making a decision in place of cognitive thinking. For instance, Terradata a firm specializing in fraud detection solutions has helped Danske Bank to modernize their fraud detection process and reduced up to 1,200 false positive per day using artificial intelligence and deep learning.
6- Robo Advisers and Algo trading
With advancements in technology, trading in stock markets are being done by using algorithm and quantitative trading models to make more efficient and profitable trades. Various leading banks such as Wells Fargo, Citizens Bank are deploying their own robo-advisory solutions to give customers access to their portfolio and offer customer service support.
Robotic process automation is a cutting-edge technology that has the potential to transform the financial services industry. It offers exceptional opportunities to accelerate numerous business processes, and eliminate time-consuming manual tasks. RPA has already helped companies in finance industry to drive efficient growth by executing pre-programmed rules across a range of structured and unstructured data.
Disclaimer: The author of this text, Robin Trehan, has an undergraduate degree in Economics, Masters in international business and finance, and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries, and/or employees.
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