RPA in financial institutions: Applications, challenges and strategies for success

The financial services sector has undergone a transformative shift in recent years, driven by the integration of digital technologies such as Robotic process automation (RPA). Beyond being a cost-saving tool, RPA is now recognized for its ability to enhance customer experiences and drive business growth by handling complex processes, from customer onboarding to credit risk assessment.

Industry applications of RPA

RPA is transforming financial operations by automating key processes across multiple domains, including:

• Lending: Loan origination, processing, underwriting, funding, administration, monitoring and default management
• Cards and payments: Application processing, approvals, payments settlement, collections, dispute and fraud management and network oversight
• Customer experience: Data extraction, account maintenance, onboarding, fees and chargebacks, account closures and cash handling
• Risk and compliance: Transaction monitoring, risk reporting, alerts management and client due diligence

Key drivers of RPA adoption in financial institutions

As financial institutions adopt RPA, they navigate a dynamic environment shaped by changing customer demands, competitive pressures, regulatory developments, globalization and rapid technological advancements.

The following provides a closer look at these key factors and how RPA is positioned to address them:

1. Evolving consumer expectations

• Demand for speed and efficiency: Modern consumers expect quick, seamless banking experiences. RPA can help institutions meet these expectations by automating time-consuming processes.
• Personalized services: With RPA's data processing capabilities, financial institutions can offer more personalized services, from tailored investment advice to customized loan offers.

2. Competitive landscape

• Staying ahead: In a fiercely competitive market, banks are constantly looking for ways to differentiate themselves. RPA offers them a tool to enhance their services, reduce turnaround times and improve overall customer satisfaction.
• Innovation: The integration of RPA can lead to the development of new financial products and services, giving early adopters a competitive edge.

3. Regulatory environment

• Supportive regulations: Many regulatory bodies are now encouraging banks to adopt RPA, seeing it as a tool to ensure accurate reporting and compliance.
• Data protection: With increasing concerns about data privacy, RPA can help banks ensure that customer data is processed securely and in compliance with regulations.

4. Globalization and digital transformation

• Digital banking: As more consumers turn to digital banking solutions, RPA will play a crucial role in supporting these platforms.
• Cross-border operations: For banks operating in multiple countries, RPA can help streamline cross-border processes, from currency conversion to regulatory compliance.

5. Cost efficiency

• Operational savings: RPA offers significant cost savings by reducing the need for manual labor and minimizing errors.
• Scalability: As financial institutions expand, RPA allows them to scale their operations without a proportional increase in costs.

6. Technological advancements

• Integration with AI: The convergence of RPA with AI and machine learning will unlock new possibilities, allowing for more intelligent automation.
• Cloud-based RPA: The rise of cloud computing will make RPA solutions more accessible and scalable, especially for smaller financial institutions.

Overcoming barriers to implementation

To successfully implement RPA, financial institutions can overcome common barriers by adopting targeted strategies:

• Addressing technological expertise: Invest in training programs, partner with educational institutions and recruit professionals skilled in RPA technologies
• Navigating budget constraints: Adopt RPA incrementally, prioritize critical processes and explore cost-effective or open-source automation solutions to maximize ROI
• Clarifying ROI: Conduct thorough assessments, establish measurable KPIs and leverage case studies to demonstrate tangible benefits and instill confidence in decision-makers

By addressing these barriers with strategic initiatives, financial institutions can fully realize the transformative potential of RPA, driving efficiency, innovation and growth in a rapidly evolving industry landscape.

How we can help

Baker Tilly’s digital solutions team can help financial institutions unlock the full potential of RPA. From developing a tailored RPA strategy to implementing end-to-end solutions, we provide hands-on support to streamline your operations and enhance efficiency.

Whether you’re starting your RPA journey or seeking to enhance existing systems, Baker Tilly can guide you every step of the way, positioning your financial institution for innovation, growth and long-term success. Connect with us to learn more about how we can help your organization harness the power of RPA.