How RPA is Transforming the Banking Industry: The future of financial services 19 Jan 2024

RPA in banking

The banking business must overcome unprecedented levels of competition to retain profits and prosperity. Financial institutions must embrace lean and flexible operating approaches to increase efficiency while cutting costs to thrive in today’s market.

Banks, on the other hand, confront several challenges, including adapting to the expanding digital skills gap, providing suitable solutions and platforms based on customer- or client-specific demands, and managing the company in the face of evolving legislation. It has caused significant problems in the financial sector, with many institutions failing to perform basic duties like reviewing loan applications or dealing with payment exceptions.

To traverse this effectively, financial institutions need a scalable, automated service backbone that can enable the development of customer-centric solutions at a fair cost. Creating high-performing operational teams headed by talented individuals and building lean, industrialized processes from modular, universal components may bring out the best in people.

Taking on a full digital transformation might seem like biting off more than you can chew, particularly for big, conventional banks that are still dealing with the consequences of developing their operations with obsolete legacy systems.

Automation is the future, but it must be balanced against areas where human assistance or guidance is required.

Process Automation is the Key to Success.

Different sectors believe that business optimization via artificial intelligence and robots, as well as the automation of routine administrative and IT tasks, will have a substantial impact on how operations are carried out.

The removal of time-consuming regular tasks that slow down processes and outcomes is a key advantage of automating operations. Manually reviewing loan applications is one example of such an activity. The application is then sent to the bank, where a loan officer evaluates the material before making a final decision on loan approval. To some degree, human interaction in the credit assessment process is desired.

There is a “perfect balance” where the appropriate amount of automated and straight-through processing can be discovered, along with the appropriate amount of selective inspection and examination, for situations where finances are limited or historical credit is questionable. Finding the sweet spot between totally automated and manual operations is critical for pleasing consumers and making solid loan decisions.

The Advantages of Automated Banking Systems

Data processing in real-time

Banks are subject to an increasing number of regulations, rules, trade monitoring updates, and cash management obligations. Data of this magnitude makes it hard for even the most expert personnel to avoid making errors, yet rules often provide little room for error. Automation is an excellent tool for monitoring your institution’s compliance with all relevant standards and tracking huge amounts of data concerning agreements, money flow, transactions, and risk management. More significantly, automated systems do these duties in real-time, ensuring that you are constantly aware of reporting needs.

Case Study: Real-time computation

Banking automation is transforming a wide range of back-office banking activities, such as client information verification, authentication, accounting journaling, and update deployment. Financial organizations employ banking automation to perform physically demanding, routine, and readily mechanized tasks.

Improved Customer Experiences

Today’s financial institutions place a premium on customer pleasure. Using contemporary technologies to analyze customer behaviour and preferences might be beneficial. This is how businesses provide the greatest wealth management and investing advice. Using automated experts, banks can rapidly and efficiently advise customers in challenging circumstances. Beyond speed and efficiency, banking automation may boost customer happiness. Customers may obtain personalized service 24 hours a day, seven days a week.

Case Study: Improving Customer Service

Improving customer service is a continuous priority in the banking business. Furthermore, financial institutions have recognized the multiple ways in which banking automation systems contribute in providing an amazing customer care experience. The difficulty people have in replying to the hundreds of queries they get every day is one application.

In banks, AI-powered chatbots tackle minor issues, while human agents handle more complex requests.

Improved Efficiency

Because of automation, employees no longer have to spend as much time on dull, repetitive tasks. We’re talking about activities like evaluating budget reports, updating software, card approval verifications, and staying on top of laws. Businesses may free up personnel to concentrate on more strategic and creative initiatives, such as providing tailored solutions to clients’ concerns, by automating mundane tasks.

Case Study: Credit Card Processing

Using the previous manual processing system, it may take weeks to check consumer information and approve credit card applications. Customers were dissatisfied with the wait time, and the bank was forced to pay for it. However, RPA has enabled banks to process the application in hours rather than days. Robotic process automation (RPA) may interface with several systems at the same time to evaluate data such as supporting papers, background checks, and credit checks and make a decision to approve or disapprove an application according to certain standards.

Reduced costs

The prospect of large financial savings is what has sparked broad interest in banking automation. Automation may considerably boost production by eliminating the chance of human error and speeding up operations. It also aids in financial savings. Experts estimate that automation may help organizations save up to 90% on operational costs.

Case Study: Automated banking risk reporting

The popularity of automated solutions to improve risk and compliance across all aspects of a company has increased. With the use of banking automation, banks may do fraud and quality checks, as well as assist in risk reporting.

Compatibility with existing IT infrastructure

The most significant benefit of automation technologies is that they do not need any extra infrastructure or setup. The majority of these may be included in the system with little to no changes to the current code. Furthermore, they may be modified to interact with as many current systems as possible while still providing value across the board

Case Study: Make use of existing infrastructure

Customer questions pour in daily. Account inquiries, loan inquiries, and bank fraud are all possibilities. RPA allows banks to automate low-priority requests.

There is no need to entirely replace old systems when using RPA. Traditional banking infrastructure is enough for the deployment of robots. One of RPA’s most useful characteristics is its ability to connect to several systems. Your bank’s development technology is irrelevant. The use of RPA inside an organization is quite wide. RPA is being used across a variety of bank departments, ranging from operations and marketing to finance and human resources.

Banking automation’s challenges and potential disadvantages

While there are several advantages to using automation, it is not easy. Let us look at a few of the issues with banking automation:

Inadequate legal framework for automated systems usage

Despite the evident benefits of delivering innovation on a wide scale, there are certain unique rules and constraints for process automation in the banking industry. The necessary legal constraints imposed by the government, central banks, and other stakeholders are also novel. Many countries have yet to implement this kind of legal framework.

Difficulties with change management

Meaningful transformation is not possible without addressing the human aspect of change and preparing users with effective organizational change management, regardless of how brilliant the technology and its advantages are.

Banking automation has increased worry about job security, embracing new technology, shifting organizational hierarchies, and changing business processes, resulting in a general reluctance to accept the changes brought about by automation. The major purpose is to develop a “people plan” for the implementation of banking process automation.

Organizational problems and the standardization of processes

The most serious banking automation concerns are process uniformity and organizational misalignment. The difficulty stems from the traditional division of IT and business divisions into distinct activities. An organization must rearrange roles and responsibilities to align teams and incorporate banking automation technology. This barrier reflects the difficulties of standardizing processes for unstructured data and human-involved operations. Things may go wrong when deciding which company tasks to automate. Processes may be perceived and performed in a variety of ways.

The company’s external and internal credibility have suffered.

This is especially difficult for the banking industry, which relies on public trust, and employees may fear for their jobs as a result of changes in business processes, making the social impact of automation an immediate reputational issue for organizations considering the incorporation and use of banking automation.

Robotic Process Automation: Banking on the Future

RPA is an abbreviation for Robotic Process Automation. RPA is a software solution that automates the creation, deployment, and management of digital “robots” that perform human-like tasks and interact with other digital resources to achieve predefined goals.

The banking industry struggles to sustain profitability and performance at all-time highs due to intense competition. In the present market environment, banks must prioritize the reduction of operational costs, the enhancement of productivity, and the year-round maintenance of a lean and adaptable business model to preserve their competitive advantage. In the banking industry, Robotic Process Automation (RPA) is currently undergoing a period of rapid advancement, which enables establishments to adjust their processes in response to a constantly changing market.

What the Future Holds for Banking Automation

Future successful banks will accept innovations, be adaptive to new business models, and always prioritize their clients. Let’s take a look at the future of banking automation.

Blockchain and other new technologies are becoming more popular.

With the emergence of Blockchain technology, financial institutions are employing risk management strategies that make it more difficult for hackers to steal sensitive data, such as bank account numbers, from clients. Current asset transactions are being mirrored on the Blockchain as part of the technology’s industrial experiments. It’s useful for reducing waste, increasing safety, completing transactions faster, and saving money.

The Value of New Technology

  • Disintermediation: Because of blockchain’s distributed ledger design and transaction immutability, centralized trust authorities are unnecessary. Distributed, immutable data reduces the requirement for trust between parties and assures that all parties are working with the same, up-to-date information.
  • Transparency: The implementation of blockchain technology will boost communication and transparency in the marketplace greatly. Blockchain solutions promote the development of a public record of ecosystem activity to guarantee that all financial markets have access to accurate and timely information.
  • Provenance: From the time an asset is first referenced in a transaction on the blockchain, the blockchain retains an unalterable record of transactions and, hence, ownership. This significantly reduces the risk of various asset types and the need for related mitigation activities. This capability may help reduce theft, fraud, and the inappropriate selling of valuable assets and ideas. Furthermore, the blockchain’s digital footprint will be beneficial for items whose provenance is an important aspect in establishing their value.

Banking automation is being integrated into the loan underwriting process

Automated underwriting reduces manual underwriting labour expenses while increasing profit margins and customer satisfaction for loan providers. Loan cycle digital verification is facilitated by automated loan underwriting. Processing, underwriting, document preparation, and digital distribution are all automated. The real-time integration of all entities with the bank lending system for data interchange across applications enables e-closing, documenting, and vaulting.

The following are the four primary goals of automating the lending and underwriting processes:

  • Putting financial transactions into an automated structure will reduce processing times.
  • Establishment of a centralized accounting department in charge of overseeing all banking processes.
  • Creating a bendable product line that caters to the preferences of people in a certain location.
  • Fast and accurate credit processing decisions; expert portfolio risk management; and protection against consumer and staff fraud.

Developing fully automated “smart” banks

Smart Banking’s major issues include banking mobility, remote advising, social computing, digital signage, and next-generation self-service. With Smart Banking, banks become digital while remaining at the core of their customers’ lives.

The Smart Bank project assists banks in optimizing customer interaction strategies to promote and keep customers with a more exceptional customer experience, attract new clients with a simplified marketing experience, and ultimately become better engaged with consumers.

Virtual attendants, for example, may increase a customer’s credit card limit more quickly by responding instantly to their request. Collaborative virtual associated technology has rapidly advanced and becomes widely available, allowing customer service representatives to manage phone-in requests for increased credit limits actively. This is achieved using tools that enable agents to provide the requested information more efficiently and effectively answer customers’ questions.

With the full assistance of the virtual attendant robot, the bank staff can focus on providing the fast and highly customized service for which the bank is known. Analysis of fraud warnings is another potentially fruitful field. When RPA is combined with a case management system, human fraud investigators can focus on the circumstances surrounding alarms rather than spend time manually filling out paperwork.

Possibility of collaboration between traditional banks and fintech firms

Collaboration between enterprises operating in the financial technology sector and conventional institutions can yield innovative and convenient services for clientele encompassing domains such as insurance aggregate, financial planning, account opening, and more. The goal is to work together to solve customer problems.

Software Interface (API) Access: Banks can provide access to their software interfaces (APIs) for other financial services and fintech partners.

Handle complex regulations: Banks can assist fintech companies by guiding them through the industry’s stringent regulations. This allows fintech to gradually expand its presence in the financial services sector.

Improve the company’s image: The partner brands will benefit from the exposure received by the others. Further, this can increase both partner’s pool of potential buyers.

Immediate availability of cutting-edge equipment: Another notable advantage of collaborating between the banking and fintech sectors is the prompt availability of state-of-the-art equipment, including software and technologies. These are typically provided to financial institutions such as banks in a white-label format. Collaborating with fintech companies to provide innovative services will be very beneficial for banks. They put less emphasis on creating and maintaining their internal technology to save additional time and money.

Wrapping up:

The advent of automated banking automation processes promises well for developing the banking and other financial services sectors. These technologies will free up workers’ time to focus on more important projects by streamlining and improving transactions. Adopting these advances will put financial institutions in a strong position to compete in the future.

Looking to automate your banking processes? Velan is the banking and credit union industry’s most dependable RPA implementation partner, capable of revolutionizing your financial institution. Our comprehensive banking RPA services will assist you in modernizing and automating your processes to improve efficiency and productivity.

Peter Paul

Technology Consultant

About the Author:

Peter has over 20+ years of experience in managing and delivering enterprise applications and IT infrastructure. He served several IT companies in the US and Canada before joining Velan. He is instrumental in deploying, managing and delivering latest technologies at Velan. He can be reached at


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