Early 2017 an insurance company set a new benchmark by processing a claims payment in as less as 3 seconds without any paperwork. Powered by Artificial Intelligence, Machine Learning and Robotics, the firm is bringing in newer ways to simplify processes and improve customer experience.
As financial institutions continue to optimize and automate core business processes, new technological innovations are fast emerging. One such innovation is Robotic Process Automation (RPA), which is basically the use of intelligent software to automate data intensive and repetitive manual tasks.
The traditional style
The financial services sector is highly dependent on documentation and legacy systems. From back office operations to account management to transactions, a huge amount of document gets processed and generated daily. By applying RPA to these tedious jobs, financial firms can drastically improve their business performance. In the financial services sector data is getting created at an unprecedented rate through multiple channels and platforms. Managing it manually often leads to data inaccuracy. RPA can help financial firms transfer, manage and migrate system data rapidly ensuring optimal resource utilization and enhanced employee productivity. It’s observed that the IT teams of financial firms often spend too much time in manually performing administration tasks like running batch processes, taking backups etc. With the help of RPA, IT teams can continuously monitor system performance and predict issues faster, making their job more reliable and efficient.
Let’s see how RPA is getting implemented in some of the key areas in the financial sector.
Making insurance underwriting predictable: RPA is helping insurers leverage the power of real-time data analysis and predictive analytics enabling their end-users manage risks and avoid losses more effectively. With insurers becoming more of risk mitigators and advisors from being mere claims processing agents, RPA is changing the conventional ways of insurance underwriting.
Modernizing Finance and accounting: In finance and accounting, RPA solutions are getting deployed for automating data entry, account reconciliation, managing transactions and maintaining master data. Firms have started using robotics to audit expense reports, manage invoices, process vendor payments and handle vendor inquiries.
Automating regulation and compliance: RPA is getting increasingly adopted in automating some of the key regulatory initiatives such as KYC (Know Your Customer), AML (Anti-Money Laundering). Bots powered by RPA can process many of the time-consuming tasks associated with account opening in seconds with 100% accuracy and can also find potential issues.
Simplifying risk management: In financial risk management, RPA can help analyze the changes in risk exposure and also find out the reasons for any discrepancies. Based on the analysis it can also provide recommendations and remedial actions for avoiding any breaches. RPA is also getting implemented for credit limit evaluation and for generating risk reports timely and accurately.
RPA is dramatically transforming the core of the financial services business impacting almost everything from productivity, business efficiency and operational costs. Research suggests that RPA can help businesses achieve 25-50% cost savings resulting in higher efficiency, improved accuracy and enhanced customer experience. Several Fintech and Insurtech firms have already taken the first mover advantage by incorporating RPA in some way or the other. In fact various tier-1 financial institutes are setting up their own CoEs and innovation centers to unleash the power of RPA and stay ahead of the competition.
Robotic Process Automation is surely the next big step in the evolution of the financial sector. And when applied intelligently it can help businesses achieve significant benefits.
Are you ready for the next big wave?
Sr. Consultant – Marketing