4 Major Challenges of RPA Adoption in Banking Industry


RPA Adoption in Banking Industry

Are you looking for a better way to streamline your internal processes? Learn the benefits and robotics process automation challenges, an innovative approach that could transform banks’ operations.

Robotic process automation (RPA) can, without a doubt, provide banking firms several advantages. However, successful banking robotic process automation adoption is not always smooth. There are several common obstacles that banks need to overcome to reap the full benefits of RPA. Here, we’ll look closely at four rpa challenges banking organizations face when implementing it.

What is robotic process automation (RPA)?

It is the idea of deploying software robots with artificial intelligence (AI) to automate corporate activities. Robotic process automation (RPA) can provide banking firms several advantages. RPA software vendors provide a digital workforce of bots that can be configured to mimic human users in performing repetitive, rule-based digital tasks.

How it works

The software bots are designed to interact with banking systems and applications like humans. They can log into banking systems, open up apps, enter data, make calculations and carry out processes according to pre-determined rules.

Typical applications for rpa in financial services include automating customer onboarding processes, loan origination, fraud detection, KYC/AML compliance checks, and account opening.

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Automating customer onboarding processes

It can gather customer information, fill in application forms, verify customer identity and documents, and open accounts.

Loan origination

It can collect and consolidate customer information from multiple sources, calculate loan eligibility, prepare loan documents and disburse funds.

Fraud detection

It can monitor customer transactions for suspicious activity, investigate suspected cases and report findings to the relevant authorities.

KYC/AML compliance checks

It can verify customer identity, assess risk levels, and screen for politically exposed persons (PEPs).

Account opening

It can gather customer information, verify identity and documents, open accounts, and provide banking services.

Advantages of robotic process automation

There are many potential benefits of rpa in banking, including:

•           RPA in banking reduced processing time and costs: By automating repetitive, low-value tasks, RPA can free up employees’ time to focus on more strategic tasks. It can lead to significant cost savings for banks.

•           Increased accuracy and compliance: By automating tasks, RPA can help reduce errors and improve compliance with banking regulations. It is achieved by deploying bots programmed to carry out specific tasks in line with predefined rules and procedures.

•           Improved customer service: RPA can help banks improve their customer service by providing faster and more accurate responses to customer inquiries.

•           Increased agility: RPA can help banks be more agile in their operations since they can quickly adapt to changes in banking regulations or market conditions.

4 Common Obstacles on the Way to RPA Adoption

Because banking is a heavily regulated industry, several compliance-related issues must be considered before implementing RPA.

Four significant challenges to implementing RPA in the banking industry include:

1. Security and confidentiality

2. Regulations observance

3. IT Architecture issues

4. Challenges with organizational change

Security and confidentiality

Security and privacy concerns are always a top priority in the banking industry, and for a good reason. Banks hold sensitive customer data, so any automation solution must be secure. Some banks try to find a workaround for security and privacy by keeping RPA systems separate from their leading banking network. However, this can create other IT infrastructure challenges, which we will discuss.

Regulatory compliance

Regulatory compliance is another major challenge for banks considering RPA. For example, banks are subject to the Customer Identification Program (CIP) requirements under the USA PATRIOT Act. This program requires every financial institution to have customer identification procedures to verify the customer’s identity. The CIP rules state that these procedures must be applied “consistently and systematically.”

However, the implementation of RPA can pose compliance risks. For example, if a bank uses RPA to automate the customer identification process, it must still have a way to verify the customer’s identity. The bank must have procedures to ensure that the data used to verify the customer’s identity is accurate and up to date.

Another compliance risk associated with RPA is the potential for insider fraud. If an employee has access to the software used to automate banking processes, they may be able to manipulate the data used in those processes. It could result in inaccurate customer information or customers being wrongly identified as high-risk.

IT Architecture issues

To successfully implement RPA, banks need to have a robust and reliable IT infrastructure in place. It includes having enough processing power and storage capacity to support the additional workload placed on the system due to RPA. As mentioned earlier, banks keeping RPA systems separate from their main banking network may disrupt the system’s efficiency if not done correctly.

Another challenge associated with IT infrastructure is the need for robust security measures. RPA systems will likely contain sensitive customer data, so banks must have adequate security measures to protect that data. It includes both physical and cyber security measures.

Challenges with organizational change

Shifting to RPA means changes in banking operations, which can be disruptive for employees. For example, if a bank automates its customer onboarding process, employees previously responsible for that task may need to be reassigned to other duties. It can lead to resistance from employees who are reluctant to change their roles or fear they will become obsolete.

Although RPA adoption in banking can be challenging, its benefits are an asset to any bank looking to improve its operational efficiency. RPA can help banks to automate repetitive tasks, free up employee time, and improve accuracy and compliance.

Would you like to know more about the benefits of RPA adoption in banking? Check out Yalantis’s article, and feel free to contact us.

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