RPA has caught the eye of the financial services industry. Here's why.
The bigger the financial institution, the more back office processes there are.
Increasing regulation and reporting requirements feeds the need to produce reports demonstrating that regulation is being adhered to. Also, most banking services include a lot of paperwork and this needs to be managed by processes.
Systems have been developed as new requirements have cropped up, but seldom is a system so smooth that it’s just a press of a button. Often banks are dealing with multiple, fragmented generations of systems connected together (or not).
RPA, which stands for Robotic Process Automation, is like tape that sticks systems together. It allows systems to communicate with one another which alleviates the pressure to develop new features as that can be costly and slow
The benefits of RPA for financial services
Some think of RPA as an in-between phase, an interim period between developing better, more integrated systems. Others see this as a long-term investment: robots are necessary as there are some things that the systems are never going to do on their own.
Further benefits of RPA in the financial sector include:
- Cost savings: It’s relatively cost-effective and quick compared to major system redevelopment projects which can be prohibitively expensive. And the benefits are immediate.
- Efficiency: RPA can potentially complete tasks quicker than was previously possible. Also, in order to automate a process you need to have understood it. This part of setting up RPA may lead you to discover ways to improve your processes further.
- Quality: Robots will run through a process as it’s been taught to them, consistently. This strips human error out, which does reduce risk.
- Confidentiality: Robots are also the height of discretion: curiosity is never an issue.
A common mantra in RPA circles is that RPA takes the robot out of the human. The robots do their thing in the background so that people can provide service to other humans, which is how banks can differentiate themselves even further from competition.
Financial services: this is how you do RPA
IT and business need to work together
You definitely need buy-in from both. If the business leaders pursue RPA too independently, IT might raise security issues later down the line. But if the venture is too IT-centric, then you’re talking too much about the platform, and the technical aspect, and you may forget what the purpose of the automation is.
Map out the business process
The first step is to map out how business processes are running and to unpack any tacit knowledge there.
Pinpoint what aspects can be automated:
- How many tasks and workflows are there?
- How often are they executed?
- How much time do these take?
These are some of the questions which will help you uncover the potential for automation.
Choose your technology
After you’ve compiled a list of processes to automate, the next stage is to talk about technologies. There are a lot of RPA technologies available. Are you automating a back-office process which runs at night and is finished by the time people get into work, or are robots virtual assistants that need to be activated at will, supporting you as you do your work? That will affect what RPA solution is most appropriate for you.
Open source vs commercial products
This isn’t an either/or issue: it may be that you’re using commercial and open source products side by side. For example, you may be using commercial solutions for back office processes and open source solutions for more virtual assistant-type RPA.
One question which will help you choose the right technology is what resources and competencies you have in house. What capacity does IT and data management have in house? Do any individuals stand out there? Or do you need an external partner to kickstart the process?
The benefit of choosing a partner is that they may have seen these issues before.
Please do bear in mind that commercial is not always safer and open source solutions are more cost effective.
In Finland, Robot Framework is the most prevalent open source tool in use and these days it has a lot of functionality and even products around it. IT departments have generally encountered it before.
However, one of the qualms people have with RPA is that it seems too technical and fragmented: commercial products make a more user-friendly first impression.
RPA: now familiar to financial services
In the beginning of RPA's journey in the financial industry, say three years ago, there was a lot of fear surrounding the robots making mistakes. People’s livelihoods are at stake after all.
However, over the years it’s become clear that it's actually people who are more likely to make the errors that we fear. Robots have entered the mainstream and financial services have seen that the risks are limited.
It can be incredibly disruptive to touch legacy systems that all banks wrestle with, which is what makes solutions like RPA so attractive. This renders RPA a form of robotics that is uniquely suitable for financial institutions.