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How can banks leverage RPA to drive efficiency and operational resiliency?

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By Sharat Chandra, Blockchain & Emerging Tech Evangelist

COVID 19 has not only accelerated the pace of digital transformation in the financial services industry but has also tested the viability and resiliency of business models and the ability of BFSI leaders to pivot their organizations towards sustainability by leveraging digital technologies. Few organizations were better prepared to handle the disruption brought by the pandemic because they were far ahead than their peers in embracing digital technologies
such as cloud, robotic process automation, artificial intelligence and intelligent automation.

Though some of the macro-level challenges such as the economic downturn brought by the pandemic are out of bounds for financial institutions, industry leaders can address challenges with respect to operation costs by incorporating right technologies in their processes.

Resilient RPA is the key to business process transformation
RPA has gradually evolved from rule-based automation to cognitive automation and intelligent automation. But, the scale of RPA adoption in the banking and financial services industry is yet to reach its full potential. More than 70 % of automation opportunities remain undiscovered. Gartner predicts that by 2023, almost half of the RPA scripts will be generated dynamically.
To accelerate the RPA journey further, banks need to implement auto bot creation tools which can leverage the power of artificial intelligence to identify processes which can be automated. Based on the ROI, intelligent bots can also prioritize which process deserves automation first.

RPA can help banks in staying compliant and minimize costs so that they can focus on customer-centricity. With the help of robotic process automation, customer service efficiency can be increased, and provisional costs can be reduced significantly. RPA and cognitive automation can help banks in better loan underwriting, Know Your Customer(KYC), Anti Money Laundering (AML) compliance processes, back-office and payment processing activities.

RBI’s mandate to banks to automate the NPA recognition process
On September 14, RBI announced that all banks must automate their NPA classification and provisioning processes by June 30 2021. The processes for identifying NPA, income recognition, provisioning and return documents are yet to be automated. Banks are still using manual intervention methods of NPA identification. Banks should adopt RPA to ensure authenticity and integrity of asset classification and provisioning calculation.

Emerging Trends

RPA as a Service
Cloud-native RPA as a Service model is gaining traction over on-premise deployments as businesses are trying to optimize their spend.

Intelligent Automation
Intelligent automation uses artificial and machine learning models to restructure processes and offers autonomous decision-making capabilities for process automation. For customer onboarding, fraud detection and loan underwriting, intelligent automation tools are being used aggressively by banks. Frauds are an ongoing threat, and financial institutions can be
empowered with the help of intelligent automation to tackle fraud. Organizations have started to look at RPA from a strategic lens rather than a tactical one. It is essential to highlight that automation has to be value-centric and not piecemeal.

Business leaders should look at the entire value chain, start small with a long-term vision of an end to end automation of the business process to realize the full benefits of RPA. RPA can enable banks to build an agile and resilient ecosystem which can tackle disruption caused by future pandemics.


If you have an interesting article / experience / case study to share, please get in touch with us at [email protected]

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