Robotic process automation (RPA) is somewhat not a very old concept. So, you might find it a bit strange when you hear it first, but there is no need to worry because you will become familiar with it once you finish reading this article.
In simple terms, RPA uses artificial intelligence to create software-based applications to automate manual tasks and mimic human interactions. It presents excellent ways for businesses to automate redundant tasks and free up humans to work on more challenging and rewarding projects.
Although the term, RPA, includes 'robotic,' there is no involvement of physical robots. Instead, it involves software applications, which automate the basic processes, such as filling out forms, extracting, merging, and formatting data, copying and pasting information, reading and writing databases, etc.
However, RPA hitherto is in the infancy stage. Still, its popularity is gaining gradually due to its ability to increase efficiency in many industries by automating repeatable, tedious, and monotonous tasks.
RPA not only helps businesses to cut high costs but also speeds up productivity to stay competitive.
The estimates in place substantiate the growing trend of RPA popularity. According to the available projections, RPA will be a USD 2.9 billion industry by 2021, a massive jump from USD 250 million in 2016.
Trends in RPA
Let us look at a few RPA trends to watch out for in the future:
Increased RPA Adoption
Many companies have started deploying RPA in their operations. A report published by Capgemini shows that 39 percent of businesses have already deployed RPA.
However, there has been a bit of hesitation due to security concerns. But companies adopting RPAs have understood the benefits.
Artificial Intelligence (AI) Usage
AI is gaining usage in the RPA arena. Both of them are likely to deliver integrated business value giving rise to Intelligent Process Automation (IPA).
Today, companies use AI and RPA for automating processes like claim processing.
Job Market Changes
Automation is a kind of threat to the job market as nearly half of the jobs are likely to get wiped out due to automation.
There is a bit of good news too. Automation is also going to create new jobs that will require new skills.
Convergence with Other Technologies
Automation can do wonders by converging with other technologies. For example, AI combined with IoT sensors in a warehouse can increase its efficiency significantly.
How RPA Helps the Finance Industry?
RPA has already brought a variety of back-office operations into its fold. By implementing machines, banks can replace humans with them for manual and tedious tasks.
Financial institutions can lower the human workforce without sacrificing efficiency by implementing automation. It can positively impact almost everything, from staffing issues and expenses to performance and efficiency matters.
The following are the key benefits of RPA to the finance industry:
Cost-Effectiveness
Cost-cutting is a significant emphasis of every industry, and the financial sector can be no exception. According to research, RPA implementation can cut down costs by 25-30 percent.
Increases Operational Efficiency
RPA implementation requires some staff training in the initial phases and sophisticated infrastructure. But, once the initial investments are made, the efficiency of operations improves within one year. Employees tend to look at RPA as a sustainable solution.
Lowers Risks
As RPA implementation replaces humans with machines, it eliminates human errors, such as lack of knowledge or tiredness. As such, it reduces errors and lowers operational risks.
Improves Internal Processes
Companies need to adhere to efficient internal processes for leveraging the benefits of AI and RPA. And, in turn, companies achieve faster internal reporting and other internal activities.
Informed Decision Making
With RPA, companies can have real-time data that improves operational efficiency, and its analysis helps make effective decisions.
RPA Applications in the Finance Industry
Now, let us see the RPA applications in the finance industry:
Customer Service
Financial companies have to deal with several queries daily that can be balance information, account information, or application status. Responding to all the queries can be troublesome for banks with manual tools.
With RPA, the companies can respond to such queries quickly and cut down the turnaround time to seconds.
Know Your Customer (KYC)
KYC is a mandatory process that banks conduct for every customer. It includes performing necessary checks on the customers.
Banks spend around USD 384 million per year on KYC process compliance, according to Thomson Reuters.
Nowadays, many banks across the world have started using RPA to conduct the KYC process. It has done away with the cost involved in the manual process.
Implementation of RPA has increased accuracy, so banks can complete the process with minimum errors.
Data Consistency
As customer data--addresses, contact details, etc.--are ever-changing, RPA can help update the latest data quickly and without the intervention of any bank personnel.
Account Opening
Before a bank allows a person to open an account, it needs to verify every detail such as identity, compliance with the bank rules, past credit scores, etc. RPA can help in the quick validation of such credentials and enable a hassle-free account opening process.
Simplifying Card Activation
When banks activate cards for their customers, there are some operations that employees have to perform, like manual data entry, which needs to be done within strict time constraints.
RPA can ease such operations by accomplishing the task within time constraints and without errors. Card activation, thus, becomes hassle-free for banks.
A Word of Caution
Although automating tasks derives benefits, automating too many tasks can harm the customer experience. The human element is essential as it brings in the trust of customers. And in the field of finance, companies cannot afford to lose customer trust. So, financial companies should carefully choose the tasks to automate.
Conclusion
Usage of RPA in finance is, however, in the testing phase. Its overall feasibility and benefits will come out with time. And time will tell which areas will be the most beneficial from RPA implementation. But, with the benefits we know, it is meaningful to consider it an effective technology for bringing in change and significant growth to the financial industry.
