As the world continues to improve due to advancements in technology, financial institutions and finance teams working towards their digital transformation are finding resources and tools to help minimize costs, improve efficiency, and provide enhanced customer service. According to Gartner, 80% of finance leaders already use or are planning to use robotic process automation (RPA). RPA is a process that relies on automated bots to conduct repetitive and process-driven tasks previously performed by employees. In an industry such as finance, where time and accuracy are a factor, RPA becomes one of the most valuable tools a company can invest in.
Why Financial Institutions Should Invest In RPA Solutions
The financial and banking industry is highly regulated and competitive. On one hand, institutions are constantly seeking new and innovative ways to stay one step ahead of their competitors, whether they’re traditional banks or challenger/neo banks, for consumer loyalty. On the other hand, there is a huge component of risk due to the growing demands for instant transactions, rapid credit approvals, repetitive work, and compliance risks. It’s in the best interest of Financial institutions to control these risks, offer better customer service, and minimize costs. This is where RPA can offer the most value.
At the risk of belabouring the point, the finance industry relies on accuracy and precision, and despite how well you can train and support your employees, they’re only human. Humans, despite their best intentions, can be prone to the occasional mistake. Anyone who’s had the duty of maintaining spreadsheets, compiling and issuing reports, and doing manual data entry can attest to the fact that there’s some human automation taking place, which can have some unfortunate results. RPA technology can learn from and mimic some of those white-collar, administrative, or managerial business processes, and produce results with 100% reliability. This is all automated and requires very little oversight or human involvement. With RPA maximizing efficiency, improving auditing and reporting, and offering enhanced customer service, financial institutions can focus on their innovation and transformations while finance and accounting teams can focus on strategic tasks
6 Key Benefits of RPA
We briefly touched on some benefits earlier in this blog, but the value that RPA adds to certain industries is immeasurable. In a business where accuracy, accountability, and trust are paramount, RPA is a precision tool to manage the scalability of the financial services industry and the quality of account data within financial institutions’ systems.
Specifically, the benefits of RPA for finance can be summarised in 6 key points:
1. Enhanced Customer Experience
To gain a competitive advantage RPA is used for example in financial institutions to help enhance customer experience. In today’s mobile and digital-driven world, 24/7 service and easy-to-use applications are in high demand for customers. RPA can help to instil these practices into organizations by offering real-time access to customer information, accelerating request solutions, and identifying additional product and service needs. Additionally, the bots can process basic transactions faster by streamlining mobile and online banking.
2. Increased Productivity and Efficiency
. RPA can help to complete tasks more efficiently and accurately, helping to reduce costs and free resources for higher-value tasks across many departments such as Finance, IT and Operations. According to Gartner, one RPA bot can outperform up to thirty times the work of a human worker.
RPA solutions combine with existing frameworks, this creates minimal disruption and can drastically speed up daily tasks that were once time-consuming due to manual input. By implementing automated bots, transactions can be processed immediately, approvals can be given, and basic FAQs can be answered by a specialized chatbot.
Thus far, financial service institutions, for example, have found value when they’ve applied RPA to:
- Credit card processing
- IT issue resolution
- Fraud detection
- HR onboarding/ Staffing
- Audit validation
- Credit and identification checks
3. Improved Compliance, Audit Reporting and Decreased Risk
Financial institutions worldwide spend copious amounts of money on non-compliance fines and lawsuits. Not only are non-compliance lawsuits expensive, but can also accrue additional costs to ensure compliance within the company. The costs to stay compliant include spending a lot of time and resources creating reports, preparing audits, managing employees, and consulting with legal counsel.
RPA can be used to control costs and minimize risk by simplifying and automating the compliance and reporting process, while also automating transaction monitoring and tracking regulatory changes. As bots are tasked with these precise, rule-based actions, there is little to no capacity for human error. Finally, another great asset of RPA solutions is the ability to generate automatic reports from data; reducing the amount of time spent on compliance-related activities and manual effort.
4. Cost Savings
RPA offers many savings solutions, but as with any new software solution, there is an upfront, startup cost for managing, installing, maintaining, and training the bots. Within as little as 3 months, however, the cost savings begin to show, especially in the long term. According to research conducted by Gartner, RPA technology usually costs one third less of an offshore employee and one-fifth of an onshore employee, when it comes to manual and data-intensive processes. In no time, the ROI has become apparent, with improved productivity and reduced labour expenses, leading to cost efficiency.
5. Improved Reliability and Accuracy
Human processing errors can cause grave mistakes to occur which can become costly. For example, if someone missed a fraudulent transaction, that can have long term consequences for the financial institution. The operational risk of manual processes such as this should be proof enough that it’s essential to invest in the right solutions to help improve the reliability of systems and processes. RPA can be the right solution for companies because it can help in numerous ways:
- Minimize downtime- Data outages can be very costly, RPA solutions can automatically fix the issues by backing up the data and resolving ticket issues faster than a human. With the help of a bot, systems will be down for a short period of time, minimizing the downtime effects.
- Higher rate of availability- You don’t have to worry about RPA bots taking a vacation or ending their workday after a set time, they work around the clock. RPA helps to reduce errors and solves problems without human liabilities.
- More accurate data entry and processing- RPA cannot make mistakes if properly programmed. Handling high volumes of data, the bots rely on AI, processes, clearly defined steps, and machine learning to become your flawless digital workforce.
6. Use for Accounts Receivable
It’s important to watch and properly manage accounts receivable because it directly correlates with the cash flow. If not managed properly, there could be cash gaps that are detrimental to the company. This is a time-consuming task when done through manually inputting information. However, automated bots can help take away the time-consuming task and eliminate human error in accounts receivable.
For example, Days Sales Outstanding (DSO) is the amount of time it takes to collect payments. This is a challenge with accounts receivable because of the human factor on both the payee’s side as well as the recipient’s side. For example, RPA can be used to automate accounts receivable and make invoices get paid faster. RPA bots will automatically send email alerts and reminders so everyone gets paid.
RPA can benefit from finance automation in accounts receivable by sales quotation generation, invoice distribution, customer credit monitoring, and follow-ups.
Learn How RPA Can Revolutionize Your Financial Services
According to a Gartner report, over 85% of all companies will have RPA by 2022. In the financial services industry, the strict adherence to compliance, risk management, and accuracy necessarily dictates that some sort of automation is required to ensure that everything is 100% correct. Hence, the addition of automation and programmed bots to take the heavy lifting and manual processes out of your employees’ hands, making your bottom line look more efficient. Whether it’s building a simple chatbot, or automating complex back-office processes, or monitoring transactions, the need for automation and precision is apparent.
At K2, we’ve partnered with industry leaders Automation Anywhere to offer training and education in RPA for Finance, via K2 University. Our Automation 360 for Finance Professionals virtual course offers courses on best practices, certificate guidance, web data management, and chatbot development.
Contact us to find out more about how we can help you transform your financial business.