Skip to main content

Is RPA transforming the financial sector?

  • Publication date
  • Reading time
  • Authors Rainer Wilken, Ralph Schöneberger
  • CategoryDigital processes by department

The approach of Robotic Process Automation (RPA) can be quickly explained. The technology helps to automatically execute recurring steps of a business process. So-called "bots" perform these tasks by imitating and executing work steps and interacting with other software systems. In this way, RPA helps a company to focus on value-adding activities. The potential of RPA  has also been recognized in the financial sector. But what role does the technology play in the financial sector and how high is its potential really? An overview.

 

 

Explained in detail

What is Robotic Process Automation?

RPA is not a physical robot, but rather a software program (bot) that automatically performs repetitive steps of a business process. RPA imitates the user in performing the steps by independently performing the activities on the user's desktop. In doing so, the bots have their own "identity" (for example, they work as their own SAP users) and operate in a virtual work environment. This makes it possible to work with various incompatible legacy and new systems, applications, terminals and desktops in the course of a process without any additional interfaces. Systems can be incompatible, for example, if there is insufficient documentation or if they were developed in a programming language with which only a few IT specialists are familiar.

The three biggest advantages of RPA in the financial sector

1. Connect systems without interfaces

Robotic Process Automation offers the possibility to connect systems that have no interfaces to each other. This makes it possible, among other things, to access customer data from IT landscapes that have grown historically or in-house developments that an employee would otherwise have had to laboriously transfer manually.

2. Increase processing speed

Employees can process loan applications much faster with the help of RPA, for example. On the one hand, because bots are available non-stop and, on the other, because they can compile the customer data relevant to the loan application from a wide variety of subsystems in a matter of seconds. Complemented by other technologies, such as electronic signatures, the entire credit application can be mapped digitally throughout.

3 Reducing manual processing errors

Transmission or processing errors are impossible with bots. Experience shows that the error rate caused by inadequate programming of a bot is significantly lower than that caused by incorrect entries during manual activities. As a result, financial service providers can offer customers significantly higher quality in the processing of their inquiries.

When all three benefits are considered together, financial service providers are thus able to process inquiries faster, more efficiently, and with less strain on resources.

In addition to typical customer-related processes such as current account creation, lending or construction financing, RPA can also be mapped in numerous other areas within the financial institution, for example in human resources, risk management or central purchasing.

Examples of RPA applications in the financial sector

The areas of application for RPA in the financial sector are diverse. Manual, recurring processes and data from third-party systems that employees have to transfer manually can be found in almost every department, for example in accounting and customer service or in overarching tasks such as compliance. Typical use scenarios for RPA in the financial sector are:

Reconciliation of data in regulatory reporting

Regulatory reporting is the term used to describe the legal obligation of financial service providers to the banking supervisory authorities to report certain information such as financial data. The quality of this information can be checked automatically using a bot. At the same time, the set of rules can be flexibly extended by the specialist department, so that adjustments to the reports are not a problem.

Onboarding new customers

During customer onboarding, customer data must be transferred to various systems. A bot can easily take over this task.

Verification of customer requests

Bots can, for example, support customers whose accounts have been blocked for a wide variety of reasons. To do this, the bot checks the blocking reasons in various systems and determines the triggering cause. In addition, a bot can match submitted customer documents based on a checklist, enabling faster processing of customer inquiries.

Criteria for the successful use of RPA in financial processes.

Although RPA has many benefits, not every financial process is suitable for this technology. A financial institution should weigh the costs and benefits before deciding to implement RPA technology. The more the following criteria apply, the more obvious it is to support the process with RPA:

  • The process follows a fixed pattern (rule-based).
  • The process has a high manual effort and is recurring.
  • The process is already digitized. If this is not the case, upstream steps (such as transfer to a digitization platform) are necessary.
  • The process has a low level of process complexity.
  • The process has as little dependency as possible on systems that will be replaced or updated in the near future.

Once the decision has been made to automate processes with RPA, a suitable and, above all, good solution is needed. What should financial service providers look out for in the plethora of RPA tools? The four building blocks that almost all players include in their decision-making are: Integration capability, ease-of-use, scalability and solution cost.

The four most important decision factors

Integration capability

The RPA solution should integrate well with the existing IT landscape and be able to interact with all existing platforms and applications. It should be noted here that there are different hosting options (cloud or on-premises).

Ease of use

The solution should be intuitive so that even users with little programming knowledge can easily operate it.

Scalability

The solution must be scalable and applicable across departments. Using RPA for a single automated process is often too costly and therefore not worthwhile.

Cost

The various RPA providers differ greatly in their pricing models. For example, in addition to the classic license models, there are also pay-per-use models, in which payment is only made for actual use.

The interplay of RPA and DPA in the financial sector.

DPA, unlike an isolated application of RPA, allows companies to implement process automation holistically and strategically at the enterprise level. By incorporating other digital technologies, business processes can be digitized from start to finish and automated to a high degree. Therefore, DPA is a useful, if not necessary, extension of RPA.

The best way to illustrate the interaction of DPA and RPA  in the financial sector is with an example: A loan application is a complex process that involves many different activities. From data entry to reconciliations and approvals to archiving of documents, various steps come together. The associated workflow is ideally implemented in a DPA platform that digitizes all the required processes. If manual interactions are required in this workflow, such as manual re-entry of customer data, the integration of an RPA solution makes sense. In addition, unstructured data such as an incoming mail in natural language with questions about the credit application can also be processed in a DPA platform and made usable for RPA.

 

Comprehensive process automation only works to a limited extent with RPA

RPA can be a useful tool in the financial sector to implement process automation. The application scenarios are diverse and bots help to save employee time and capacity so that they can concentrate on more demanding activities and avoid errors. But financial institutions should weigh the costs and benefits of using RPA well in advance. The selection of a suitable tool must also be well considered. If digitization is planned as a holistic approach, RPA alone cannot be the panacea for process automation. In this case, financial institutions should consult other digital solutions such as DPA. After all, bots only develop their full potential when they work together.

About the authors

  • Ralph Schöneberger

    Ralph Schöneberger is a management consultant at PwC, focusing on the digitization and automation of business processes. He advises PwC clients on setting up digitization platforms. Within the company, Mr. Schöneberger leads the BPM team in the FS Technology area.

  • Rainer Wilken

    As a partner at PwC, Rainer Wilken has been supporting the transformation of banks for many years. The digitalization of business processes plays a special role in this. At PwC, Mr. Wilken is responsible for the topic "Compliance of the Future" in Financial Services.

to top