Top 15 RPA Use Cases & Examples in Banking in 2024

Banking, financial services, and insurance are the top¹ industries where RPA solutions are implemented. This article focuses on RPA use cases in the banking industry, where RPA is seen the most.

RPA and intelligent automation allows banks to run repetitive processes like data entry and customer service more accurately and effectively, without overhauling existing systems. This will enable them to reduce costs, turnaround times, and manual mistakes, all the while helping employees focus on high-value-added activities.

Top RPA in banking use cases include:

Financial Products

1. Loan Processing and validation

Loan processing includes:

• Extracting relevant information from the documents submitted by the customer,
  • (Document automation systems can enable companies to auto extract data from customer’s documents.)
• Combining this information with internal and external documents to prepare a due-diligence for the loan decision,
• And using machine learning (ML), or simpler statistical approaches, to make a decision based on the available data.
  • (Credit scoring models, powered by machine learning, can help financial institutions improve the accuracy of their loan decisions.)

RPA bots can simplify data transfer between systems as loan processing includes input from multiple systems.

Learn more about loan processing automation.

2. Trade finance

Trade finance involves multiple international parties coordinating and ensuring the delivery of goods and payments. Banks and companies communicate through letters of credit (LC), bank guarantees (BG), and other documents that need to be processed.

Vendors in case studies claim to automate¹ a trade finance application without writing an extensive ruleset. They instead relied on workers of the process to train the cognitive automation tool.

3. Card management

RPA can support processes, such as, lost/stolen card replacement, charge reversals, billing processes, or card blocking decisions (based on customer requests). As these processes are often repetitive, automation will reduce the workload of employees, improve cycle times, and enhance customer experience.

For instance, a Turkish bank leveraged RPA² to automate credit card operations which resulted in a reduction in customer feedback handling time (from 10 minutes to a fraction of it), managing overnight reconciliations, flagging suspicious transactions, and more.

Automation allowed the employees to focus on more value-added activities instead of manual, menial work. Moreover, coordination with RPA increased their work efficiency.

Customer Service

4. Same-day funds transfers

The term “same-day funds” refers to money that can be transferred or withdrawn on the same day it is deposited into the recipient’s bank account.

A bank in the UK³ completed its daily payments using The Clearing House Automated Payment System (CHAPS), which offers same-day funds transfers. The manual process, which took 10 minutes per request, was automated and reduced to a few seconds of turnaround, thanks to RPA bots.

CHAPS work by:

1. Checking for fund availability,
2. Performing the transfer (to the point where manual authorization is needed without error),
3. Charging the customer,
4. And finally notifying the account.

5. Account closure

Account closure is when a bank closes a customer’s account at their behest, settling both the account’s information and account number.

For an English bank⁴, account closure was lengthy and time-consuming: It required the manual cancellation of direct debits and standing orders, transfer of interest charges, the transfer of funds from one account to another, etc.

The bank automated the system with an RPA vendor so customer service agents could complete an electronic form over the phone. The form would then be sent to a central mailbox, where the RPA system processes it with no manual intervention.

6. Know Your Customer (KYC)

Studies show that banks are spending an average of $60 million annually on KYC compliance. And that 89% of corporate treasurers have had a bad experience with the KYC process, leading 13% of them to change banks.

While dedicated KYC solutions are emerging, an alternative is using RPA bots to automate portions of the KYC process. For edge cases that require human intervention, they can be forwarded to an employee. For regular cases, RPA bots can speed up processing times, improve security and compliance, and reduce error rates for these customer-facing processes.

For example, an Indian bank⁵ leveraged RPA bots to automate different KYC tasks. The bot automatically processes the data and manages the entire KYC processing cycle, including receipt of documents via fax, mail, courier, scanning, processing, validating, document management, archival, retrieval, and generation of MIS reports. This led to a 50% reduction in human work hours, and a 60% increase in productivity.

Learn more about KYC automation.

7. Customer ID verification

Some companies have used RPA in their call centers to facilitate ID testing through a range of legacy core systems. RPA can bring all relevant customer service documents or account information to a single screen to allow client verification. This helps to improve the customer experience and the efficiency of call center operations.

For example, a UK-based bank⁶ used RPA to upgrade their customer ID verification method to one in which bots had access to all customer data and were able to:

• Generate random questions to ask to the caller based on their existing data in the dataset,
• Accept the authentication if the caller scores more than 50 points on the questions,
• And reject customer access (if they give wrong answers) and automatically send a unique one-time-activation code by text message.

8. Responding to customer requests

Conversational AI can be embedded into RPA bots. Conversational AI systems, also called chatbots, can help customers complete their requests automatically. And if a customer request is unclear, it is then forwarded to a human for resolution.

Data Processing & Verification

9. Processes involving data and verification checks

RPA can help with verification tasks like searching for external databases to check information, including business licenses and registrations. Banks can speed up administration processes and improve SLAs (service-level agreements) this way.

For instance, a top 30 US bank⁷ leveraged RPA to automate mortgage processes, such as document order, data entry, and data verification. This resulted in reduced errors and ~$1M annual cost savings.

10. Financial reconciliation

RPA can compare data from multiple systems to ensure accuracy and identify discrepancies, thereby streamlining financial reconciliation. Reliance on accurate data and automating the process will, moreover, reduce the workload of accounting teams.

A global RPA consulting company claims that⁸ they have reduced reconciliation processing time by 70% and saved around $100,000 annually with one of their partners.

11. Digitization of structured paper forms

Many bank processes involve unstructured data formats (invoice PDFs, bank statements images, etc.) which machines are incapable of understanding. Businesses can benefit from document capture technologies, such as OCR, that are integrated with RPA, to automate the processing of paper-based forms.

You can read more about document capture from our in-depth guide.

Audit & Compliance

12. Audits

Banks need to reply to the requests made by the auditors for company audit reports. Bots have been used to find all the customer accounts’ year-end balances, and then return the audit to the audit clerk in the form of a Word document. This can speed up the task duration of an audit from several days to a couple of minutes.

For instance, a UK-based bank⁹ leveraged RPA to automate 10 processes including direct debit cancellation, account closures, CHAPS, payments, foreign payments, audit reports, internet applications, and Card and Pin Pulls. In this case, the audit process was conducted in one minute, versus 6-7 hours manually.

Learn more about intelligent automation in audit.

13. Quality Assurance (QA) Processing

QA controls and audits have traditionally been manual and only looked at some portions of the portfolio. RPA can conduct QA tests on 100% of data that is prone to error or includes a monetary payment, to detect anomalies. Thus, businesses can reduce errors in important payment processes and improve customer satisfaction.

For instance, a US-based bank¹⁰ leveraged RPA for mortgage QA control. Prior to automation, the staff had to spend several hours each day gathering the necessary documents. The bot now automates these tasks and enables the comparison of various data points across multiple sources.

14. Regulatory monitoring

RPA can be used to scan regulatory announcements for future changes, to catch changes early, or to access the latest updates as new information is released, in real-time. As regulation is continuously and seamlessly established, changes may not always be apparent. RPA can be used to cross-compare notifications to show what has improved. This reduces the time spent on identifying regulations and decreases the possibility of noncompliance fines due to manual, oversight errors.

For instance, a US bank¹¹ leveraged RPA for optimizing anti-money laundering processes for due diligence on prospects, clients for periodic review, and subjects of suspicious activity monitoring. The outcome of the automation project was that the RPA bot boosted regulatory compliance and generated a 75% saving on current due-diligence costs.

Other

15. Trade Execution

In cases where legacy systems are not capable of storing complex limit orders, RPA bots could step in to help. However, this is more of band-aid remediation, as in the long run, moving to a sophisticated and capable trading system would be a prudent investment, given how it could improve trading and reduce the load of traders.

For more on RPA

If you want to read about RPA use cases under different industries, read:

• Top 100+ RPA Use Cases/ Projects/ Applications/ Examples.
• 45 RPA Case Studies of Different Industries & Business Functions
• Guide to RPA Marketplaces: Companies, History & Functionality

If you need more help on using RPA to transform your business:

Get RPA Whitepaper

If you’re at a system integrator or IT service provider, looking to build or grow your RPA service line in banking, you could achieve with by partnering with an RPA partner. Download our whitepaper on how to pick an RPA tech partner to learn more:

Guide to Choosing an RPA Technology Partner

Finally, if you believe your enterprise would benefit from adopting an RPA solution, we have a data-driven list of vendors prepared in our RPA hub.

And If you need help in identifying solution providers in RPA or another category:

Find the Right Vendors

Sources

1. Trade finance case study.
2. Card management case study.
3. Same-day funds transfer case study.
4. Account closure case study.
5. Know your customer case study.
6. Customer ID verification case study.
7. Data and verification checks case study.
8. Financial reconciliation case study.
9. Audits case study.
10. Quality assurance processing case study.
11. Regulatory monitoring case study.

• 1. “Robotic Process Automation Market Size, Share & Trends Analysis Report By Type, By Application, By Deployment, By Organization, By Region, And Segment Forecasts, 2023 – 2030.” Grand View Research. Retrieved on May 2, 2023.