“A journey of a thousand miles begins with one step.” The ancient Chinese proverb expresses how a major undertaking must start with the smallest effort. In modern banking terms, a huge (and much needed) process, the automation of a financial institution’s data, usually begins with limited application and testing. In our white paper, Revamp and Revolutionize Your Financial Institution’s Operations with Robotic Process Automation, we address how banks in their critical need to increase efficiency should not only try Robotic Process Automation (RPA) for a specific task or project, but realize that the “automated employee” solution can take the organization to new operational heights when applied on the enterprise level.

Banking is a big business full of big challenges. While a financial institution can’t be expected to turn on a dime to handle a special project or react instantaneously to a sudden change in the economy, it must do everything possible to handle the bumps, turns and opportunities that come along. Operationally, this means banks must enhance and advance the acquisition, entry, maintenance and flow of data, the lifeblood of its business. RPA links disparate systems, applications and software so that they become self-acting and self-regulating.  This reduces errors and expenses and drives greater value, from day-to-day data needs to special projects, from one department to the next.

Viral Value

A $3.5 billion asset bank and trust initially applied RPA to handle mass coding changes within customer accounts. It had spent a lot of time manually updating the accounts and then even more time afterwards with error resolution. With RPA, the bank can, for example, quickly and flawlessly move 15,000 accounts from one responsibility code into three others.

The operations team at the 34-branch financial institution soon realized that the tool’s broad applicability and user-friendly design could lead to an enterprise-wide improvement in efficiency. With the robot, in essence, “working outside of the box,” compliance, credit reporting, controller and other responsibilities were also automated on the way to an estimated annual savings of more than $560,000 per year. That dramatic accumulation covers human costs, return on investment (ROI) and error reduction, but does not include the value added from bank personnel being freed up to pursue customer service and revenue-generation activities. One data processing supervisor added that thanks to RPA, the deposit services division at the organization did not need to expand its staff during the time the financial institution tripled in size.

One bank determined that 85 percent of its operations, accounting for 80 percent of its full-time employees, could be at least partially automated, according to McKinsey & Company. Almost 50 percent of those full-time employees in operations could be relieved of their current back-office tasks with the right level of automation.

More and more banks are extending these RPA benefits beyond a single task or department:

  • Eliminate data-entry errors
  • Save time and improve accuracy
  • Ensure data integrity
  • Increase user convenience and manageability (i.e., no IT resource required to operate)

Across a wide range of platforms and applications, RPA software can intelligently automate the routine and repetitive tasks of data entry, maintenance, transfer, integration, aggregation and testing. Banks and credit unions can also use the tool during more complex jobs such as system conversion processes. RPA’s ROI can range from six months for a two-hour per day data maintenance task to instantaneous for a system conversion given the considerable fees and time it can save an organization.

In the next decade, the efficiency ratio disparity between banks adopting automation and those that don’t could be as much as 30-plus percent to negative 20 percent. Whether it’s through dramatic savings or the efficiency ratios, the difference in a bank’s performance calls for immediate action, even if the demanding world of finance hasn’t already.

Revolutionizing the data management approach of an entire financial institution can be a big mountain to climb or it can be viewed as a way to expand your business horizons. With RPA, bank operations personnel will embrace the performance elevation that the software tool can bring when applied across the enterprise. Sit back and enjoy the ride with the automated employee!

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