Banks in Australia and Singapore lead the way with RPA says IDC

According to IDC, RPA for banks is becoming an important first step towards automation for banks. Source: Shutterstock

TRADITIONALLY, banks have been conservative about the technologies they research due to the critical nature of operations, responsibility for protecting customers, and regulatory restrictions.

One technology that most banks seem eager to implement is robotic process automation (RPA).

RPA is a simple solution and is often seen as the first step towards an automation ecosystem with artificial intelligence (AI). In addition, unlike other emerging technologies, RPA is usually quite affordable and quick to implement.

Essentially, it is a collection of software robots (often referred to as bots) that can perform both deterministic and nondeterministic tasks by continuously understanding and analyzing structured and unstructured data.

“By 2021, we expect 60 percent of top APAC banks and insurance companies to deploy smart solutions for the digital workforce to improve automation, make smart decisions, and improve operational efficiencies,” said Sneha Kapoor, APAC research manager at IDC Financial Insights.

Kapoor believes that using smart bots provides exceptional business value and helps enable real-time and in-context customer experiences.

The reason these bots excited so many bankers is because they are able to perform judgment-based automation.

Furthermore, like their human counterparts, bots are both self-learning and self-healing workers, which means they can discover patterns to predict decisions and even make recommendations to improve them.

IDC expects Australia and Singapore to make steady strides in adopting smart digital workforce solutions, although many financial services companies in India, South Korea, Thailand, Hong Kong, Malaysia, Indonesia, and the Philippines are also making rapid strides.

At the Indian ICICI Bank, for example, around 750 bots currently process around 2 million transactions a day.

“Process error rates have fallen very close to zero, productivity has improved, and it has enabled us to become independent of scale,” said Anita Pai, Head of Operations at ICICI Bank.

Pai carefully emphasizes that the number of employees has not decreased as a result of implementing RPA. “Rather, we have made the processes more efficient and deploy the workforce in areas where they can do more value-added work, which means more job satisfaction.”

Within a bank, an RPA can be used for any number of functions and processes – be it browsing loan applications to find and prioritize those that meet the bank’s set criteria, to assist representatives in answering questions about fees, Deductions, interest rates and penalties to help.

“These robots are used for various operations and LoBs [line of businesses] These include private customers, large customers, forex, treasury, agro and international companies, ”said Pai of ICICI Bank.

A recent IDC report stressed that RPA was often cited as an essential first step towards automation, but could more accurately be described as part of a continuum of technology-based initiatives that bring information to the automation of business processes.

The research firm’s analysts believe the next two to three years will be critical as more institutions gain significant benefits from the implementation and introduce more successful functional and vertical use cases to the market, with vendor solutions evolving as well .

Soumik Roy
| @ Soumikroy

Soumik Roy is a business and technology specialist. It helps small and medium-sized businesses understand what is most important to the growth and success of their business.

April 6, 2021