RPA becomes a key first step to automation for banks says IDC. Source: Shutterstock

RPA becomes a key first step to automation for banks says IDC. Source: Shutterstock

Banks in Australia and Singapore lead the way with RPA says IDC

TRADITIONALLY, banks have been conservative about the technologies they explore because of the critical nature of operations, responsibility to protect customers, and regulatory restrictions.

However, one technology most banks seem to be keen on implement is robotic process automation (RPA).

RPA is a simple solution and is often considered the first step to an artificial intelligence (AI) powered automation ecosystem. Further, unlike other emerging technologies, RPA is usually quite affordable and quick to implement.

Essentially, it is a collection of software robots (often referred to as bots) that can perform both deterministic and non-deterministic tasks by continuously understanding and analyzing structured and unstructured data.

“By 2021, we expect that 60 percent of tier-1 APAC banks and insurance companies will deploy intelligent digital workforce solutions for increased automation, intelligent decision making, and improved operational efficiencies,” said IDC Financial Insights APAC Research Manager Sneha Kapoor.

Kapoor believes that the use of intelligent bots will provide exceptional business value and help deliver more real-time and contextual customer experiences.

The reason these bots have so many bankers excited is that they’re capable of judgment-based automation.

Further, like their human counterparts, bots are both self-learning and self-healing workers, which means, they can discover patterns to predict decisions and even offer recommendations to improve them.

IDC believes that Australia and Singapore are steadily progressing toward adopting intelligent digital workforce solutions, although many financial services organizations in India, South Korea, Thailand, Hong Kong, Malaysia, Indonesia, and the Philippines are making quick progress as well.

At India’s ICICI Bank, for example, about 750 bots now handle about 2 million transactions a day.

“Error rates in processes have come down very close to zero, productivity has improved, and it has enabled us to become scale agnostic,” said ICICI Bank’s Head of Operations Anita Pai.

Pai is careful to emphasize that employee numbers have not dropped as a result of implementing RPA. “Rather, we have made the operations more efficient and are using the workforce in areas where they can do more value-added work, which means more job satisfaction.”

Within a bank, an RPA can be used for any number of functions and processes — be it to sift through loan applications to find and prioritize the ones that match the bank’s set criteria to helping representatives answer queries about charges, deductions, rates, and penalties.

“These robots are being used across different operations and LoBs [line of businesses] including retail, wholesale banking, forex, treasury, agro and international operations,” explained ICICI Bank’s Pai.

A recent IDC report emphasized that RPA has often been cited as the essential first step towards automation but could more accurately be described as part of a continuum of technology-enabled initiatives that will bring intelligence into the automation of business processes.

The research firm’s analysts believe that the next two to three years will be crucial as more and more institutions reap significant benefits from implementation, and more successful functional- and vertical-specific use cases are presented in the market, with vendor solutions also becoming more advanced.