Article | 2.6.2022

How does automation improve banking processes?

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Banks have been at the forefront of implementing process automation. Why is process automation so commonly used in banks? And how are banks using process automation?

Banks tend to have several high-volume processes that involve accuracy. That is one major factor why process automation can yield particularly significant results in banks. Banks were the leading edge also in implementing RPA (Robotic Process Automation) in their processes, which is a commonly used tool for process automation. RPA solutions have substantial potential in typical banking processes, where the precision and efficiency provided by RPA is specifically needed when large amounts of data are processed.

 

Along the years, we have helped some of the largest banks in Finland and Vietnam achieve cost savings, increase operational efficiency and productivity through RPA. For example, our customer POP Bank has been using robotics since 2017 to streamline their operations, develop their customer service and improve the quality of processes. You can read more about their story here, but we will also discuss the case in this text.

Automating back-office processes improves employee satisfaction, process throughput and risk management

Banks have a lot of internal back-office processes that benefit from automation. For our customer POP Bank we have automated processes regarding reconciling data, confirming and archiving interbank transactions and processes related to the bank’s internal control, like confirmations and reports. Most of these are time-consuming, tedious legislative processes that create little value. Removing this manual work from the employees increases employee satisfaction and frees up their time for more meaningful and value-adding work. Automation also improves process quality and speed as robots work tirelessly 24/7 and without making humane errors. And if anomalities occur, they can be detected faster as robots can check large amounts of data daily, which would not be possible done manually.

”The benefits of RPA are materialized in different kinds of reconciling and confirmation processes, where information is moved from one place to another or data is reconciled between two different systems. Even though it might not be about hundreds of cases every day, robotics decreases the errors resulting from manual work and brings to light the cases that need further investigation in the reconciling processes”, states Olli Salminen, the Back Office Manager from POP banking group.

Process automation boosts speed and quality in customer service

Process automation likewise creates significant improvements in banks’ external processes, such as customer service. For example using robots as the customer service agents’ assistants, it allows faster response to customer requests when robots check and retrieve customer data. POP Bank employs RPA in developing their customer satisfaction and digital services. Automation is used in processing online loan applications and customer contracts. Robots pre-process loan applications before the customer agents check them, which quickens the application processing time. With the customer contracts automation, the robot retrieves the contracts written by customers online, and then transfers and stores them in the banking system. This also speeds up customer service and saves employees’ working time from monotonous storing of contracts.

Other examples where automation can be used in banks

Adding to the processes described above, there are many more use cases for automation. Listed below are some excellent targets for automation in banking processes.

LENDING
  • Application Processing
  • Loan processing
  • Funding
FINANCING
  • KYC and Due Diligence
  • Processing & Approvals
  • Import & Export Payments
TREASURY & LIQUIDITY
  • Order Management
  • Order Processing
  • Risk Management: Monitoring & Alerts
PAYMENTS
  • Payment initiation & repairs
  • Payment processing
  • Monitoring alerts & Screening
COLLECTIONS AND RISK & COMPLIANCE
  • Origination
  • Collection processing
  • Internal reporting & External reporting for authorities
CUSTOMER SERVICE
  • Onboarding & Account Closure
  • Account Servicing & Customer service activities
  • External reporting for authorities & External customer reporting

You can read more about use cases and RPA in banking and finance here.

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