Home > Technology > Eliminating Costly Errors in the Banking Sector: How RPA Can Help

Eliminating Costly Errors in the Banking Sector: How RPA Can Help

By: Dan Johnson


Online Banking Concept Background as a Abstract

Banks play a critical role in society, offering a place to store savings, a way to transact business, and even investment opportunities. However, few people would say they love their bank. Instead, it is a virtual requirement for many things in modern life. From paying one’s bills to preparing financially for the future, most people place their trust in a bank out of necessity and little else.

Knowing the critical role they have to play; banks invest heavily in trying to provide excellent customer service experiences while at the same time securing and protecting every depositor’s money. All the safeguards in the world can’t protect against one inevitability, though: the possibility of human error.

Many workflows in banking and finance remain dependent on professional individuals. Everyone makes mistakes from time to time—even in critical, high-security processes. The outcomes of such errors can range from minor, time-wasting nuisances to expansive problems that incur real costs for the organization. What can banks do to reduce the likelihood of these errors occurring while striving to provide a better service outcome?

With existing and emergent technologies, such as robotic process automation (RPA), exciting opportunities exist for banks to make critical improvements behind the scenes and in customer-facing applications. What is RPA, and what answers does it have for modern banks?

What is Robotic Process Automation?

Robotic process automation refers to using special software platforms to create “robots” that work within computer systems. RPA aims to extend the capacity of a workforce by replacing the need for human employees to engage continuously with rote and tedious tasks. RPA software robots work best in rules-based environments where processes consistently require the same sequence of actions.

Because software robots interact with program interfaces the same way humans do, stability in the tools you choose is also important for RPA effectiveness. Ultimately, RPA is a basic yet powerful form of automation that can affect the quality and speed of work, especially in banking.

The Most Common Types of Human Error in Banking

If RPA is all about saving time and helping banks be more efficient in their operations, what are the problems it is meant to solve? With so many people working in bank offices each day, there are innumerable opportunities for simple mistakes to snowball into major issues. Consider a recent story in which a Canadian bank lost a $10,000 wire transfer due to a simple error.

Some of the most common types of problems in financial institutions that still use manual workflows include:

  • Typos and other forms of incorrect data input into computer systems
  • Data that doesn’t reach the appropriate destination system
  • Information overlooked due to fatigue or heavy workload
  • Lacking or improper oversight of key anti-fraud and anti-money laundering technologies
  • Delays in important workflow steps or steps missed altogether.

By mapping problematic processes and exploring opportunities for automation, banks can reduce or even eliminate errors and waste.

How Can RPA Help Banks Work Smarter?

Many of the mistakes above relate to the same kind of work: repetitive, data-heavy processes that involve accessing information, moving it between computer systems, and taking actions based on the rules governing those workflows. In other words, much of this work is ideal for automation that can follow those rules the same way, repeatedly and without fail.

Daily and even hourly reporting on critical business information are essential for banking operations. Errors in these reports can lead to incorrect decision making, loss of revenue, and other frustrating issues. Because reporting requires data from many places, human users might miss something important, copy the wrong information, or miss filing deadlines. An RPA system can mimic these human actions, accessing databases and compiling information for automatic, error-free report generation.

Consider another example related to compliance. KYC and anti-money laundering requirements demand that banks watch for suspicious activity, gather information about certain transactions, and escalate the issue if necessary. RPA robots can monitor these fraud factors and send alerts when something is unusual. For KYC compliance, bots can seek out and collect information from different systems, breaking down silos and unifying data where human workers can quickly review it all at a glance. These are just two examples of the many ways RPA can transform banking.

Blending Automation With Human Skill for Better Outcomes

When effectively configured and smartly deployed, RPA can make significant changes possible for banks. Not only do customers receive faster and more convenient service, but smart automation tools can make work more engaging and enjoyable for many employees. With no need to focus on the most tedious and repetitive tasks, humans can work in concert with software robots to do more each day at a higher level of quality and reliability.

Whether it is overhauling KYC compliance procedures with automated tools or building new and better anti-fraud detection and alarms, RPA has many potential uses in finance.

Published: May 6, 2022

Trending Articles

Stay up to date with
Avatar photo

Dan Johnson

Dan Johnson is Director, Product Marketing – Intelligent Automation at Kofax. He delivers global product positioning, sales & partner enablement, and go-to-market strategy for Kofax’s Intelligent Automation Platform, transforming information-intensive business operations start to finish. Prior to Kofax, Dan held similar roles at Alcatel-Lucent, Nitel, Nokia, and Revenera. He holds an MBA in marketing from Keller Graduate School of Management of DeVry University, and a bachelor of science, marketing & economics from Elmhurst University.

Related Articles