Now we are living in the world of radical uncertainty. The fourth industrial revolution – the digital revolution – isn’t future, it’s a reality that requires the changes in all industries. Banking is not an exception. It’s surprising that this industry wasn’t affected essentially earlier. Actually, the bank’s customers show themselves as a very loyal and condescending to the banks. This is partly due to psychology. Banks deal with money, money is something “sacramental”, so we all (customers, banks, regulators and so on) should be very careful… This is not the industry for the experiments.
In some way, it’s true. The attempt to change core banking systems is like trying to change the car engine when it is moving at full speed. The problem is that the banks forced to do something very similar. Significant changes in their processes should be done faster. Why? Because the customers require better service. In addition, all the banks should do these changes facing continuing and growing pressures on their profitability. So, the task of business processes transformation, achieving greater operating efficiencies, reducing costs and supporting new products and services is very essential for the banking industry.
RPA as an efficient way of business transformation
Transformation of the banks’ business processes and their digitalization should be done according to the long-term strategy and values. It influences the core components of banks efficiency. So, it’s crucial to choose the right way of transformation according to the goals and objectives.
Digital transformation could be done according to the different approaches. One of them is Robotic Process automation (RPA) that helps to automate bank’s front and back office business processes and achieve greater operating efficiencies. Software “robots” can perform some routine processes by mimicking the way that people do. The idea of RPA lies in the use of software with AI and machine learning capabilities.
Using RPA could give many benefits to the banks. In this post, we would like to use the Four P’s – People, Processes, Platform, and Products – approach as a simple and effective way of analyzing the RPA impact on the core bank’s business components.
Four P’s of bank’s digital transformation
One of the critical factors of any transformation is people. New processes could be significantly affected by the number of FTE needed to perform them and could change the requirements to the staff competencies. In addition, the changes in the business processes could be designed and developed only with the active encouragement of senior managers, experts, and developers.
Using RPA to automate processes allows bank’s:
- Reduce and/or optimize the FTE number.
- Improve employee culture. The processes most suitable for RPA are typically the most exhausting and least enjoyed. When the employees freed from them, they can refocus on more rewarding and higher value activities.
- Decrease the dependency of the human factor. Robots are programmed to follow rules and robots do not make typos and mistakes, don’t forget to do the task and so on.
The goal of any business transformation – digital or any other – is always to deliver a better customer experience. Reviewing, simplifying, optimizing the business processes is the main step of any transformation.
RPA can help banks to:
- Optimize the processes and reduce hidden wastage. In this case, we talked about all types of wastage – money, time, efforts.
- Decrease costs and increase the profitability.
- Reduce cycle times and improve throughput. Software robots are designed to perform tasks faster than a person can.
- Increase the quality of processes monitoring. The tasks performed by a software robot can be monitored and recorded at every step, producing valuable data and an audit trail that can support further process improvement.
- Help to collect data and following the rules connected with regulatory compliance.
Successful business transformation that really delivers better customer experience can only occur with the support of modern platform tools. It’s comprehensive task to integrate new technologies with many legacy systems that are the parts of the bank’s IT infrastructure.
RPA in this case has many advantages, comparing with other approaches of the transformation of the business processes (for example, Business Processes Modeling (BPM) or IT-transformation):
- RPA could be integrated faster and easier with existing software infrastructure.
- This approach is very flexible and easily altered or updated to adapt to the changing world. Robots can be quickly reassigned when other, more important processes arise—as each robot is typically capable of performing many types of processes.
- It has high scalability. Once a process has been defined as a series of instructions that a software robot can execute, it can be scheduled for a particular time, and as many robots as required can be quickly deployed to perform it.
The digital transformation could support the new products and services delivery or modification of basic products. Banks’ digital products must be designed within the context of the other digital properties that their customers are engaging with on a daily basis.
Using RPA allows banks:
- Increase the quality of the services. Robots can work faster, do not need to sleep. So, the 24/7 service becomes cheaper and more reliable.
- Implement new services or refine existing. Better data collection and optimization of the processes can be the base of significant changes of core business processes.
RPA could be very good solution to the digital transformation of bank’s business processes. It could help to improve customer experience and to rise the efficiency of the business. This approach has great benefits and positive impact on four main components – People, Processes, Platform and Products.
Intetics team will be happy to contribute to your project. We have a lot of experience on running different types of the projects and will be able to help you choosing the most efficient way how to build or reinvent your new business processes.