Even before the outbreak of COVID-19, banks were looking for ways to digitize and streamline their operations to remain competitive in a fast-moving marketplace. The global pandemic only exacerbated the need. The sudden necessity to support a remote workforce combined with a sharp increase in customer demand for mobile and online services put a further strain on operations. This was especially evident for back-end processes that depend on multiple or legacy systems that do not typically interface with one another.
In response, banks are turning to Robotic Process Automation (RPA) as a cost-effective technology that can streamline the back office without requiring costly system upgrades. With a payback period of a year or less and minimal disruption to existing processes, RPA programs are becoming a real game-changer. As we head toward a post-pandemic future, it’s imperative that bank executives factor in the long-term value RPA creates and its role in digital transformation.
Why RPA Is the Right Solution
RPA is quick to implement and delivers a compelling ROI.
The best way to understand the ROI model of an RPA program is to consider the metaphor of adding digital employees to your team and then comparing the costs of a digital worker to a traditional employee.
With a traditional employee, hiring and training drive your upfront costs, and your ongoing costs include base salary, paid time off, health insurance, payroll taxes, and more. With a digital worker, your upfront costs include setting up the automation workspace (i.e., the IT environment) and training (i.e., programming) the digital employee, and your ongoing costs include licensing and maintenance of the digital worker.
With all these factors accounted for, a typical RPA program will break even in less than a year and deliver an approximate ROI of 250% on the initial investment. Plus, the return only improves over time.
RPA increases accuracy and provides an audit trail for compliance.
Typos, transposition errors, and other accuracy issues are unavoidable with manual processes and undeniably costly. The reason for this is simple: people are not well-suited to do tedious and repetitive work for long stretches of time. (Truth be told, they probably don’t like doing it either!) So, “hiring” digital workers for this type of work and focusing your people on more creative tasks gives you a trifecta of benefits: happier employees and higher quality work performed at a lower cost to the organization.
This is why RPA is so invaluable for banks. Whether it’s used to support loan processing, import data, update customer accounts, track approvals, or any number of other tasks, the need for speed and accuracy is essential. RPA handles the routine tasks and gives your staff more time to solve problems, handle edge cases, work collaboratively with coworkers, and support customers.
RPA easily scales with changes in work volume.
For most banks, the volume of work fluctuates season-to-season and year-to-year. Whether it’s caused by normal business cycles, new growth, or changes in the market, it can be difficult for bank executives to maintain the appropriate levels of staffing to keep up with SLAs.
This was powerfully evident during the pandemic when some parts of the economy slowed down dramatically while others accelerated. In banking, the Paycheck Protection Program created a huge opportunity, but it also required a massive increase in the workload of employees processing loans.
Digital workers, once they’re “trained” to complete a given task, can easily scale up or down as needed. There is no need to recruit, hire, and train new employees when demand is high, and they can be easily scaled down when demand is low without adversely affecting employees’ jobs. This is one of the key benefits that RPA provides: it’s a digital workforce that can be as large or small as necessary at any given time.
RPA improves the customer experience and increases employee engagement.
With RPA in place, you’ll be able to standardize systems, reduce the need for manual labor, and reward your workforce with more creative and collaborative endeavors, all at the same time. This frees up time and resources for banking executives to pursue big picture initiatives, focus on growth, and – most importantly of all – continue to improve the customer experience to encourage long-term loyalty.
RPA Provides Protection Against an Uncertain Future
COVID-19 certainly won’t be the last bout of volatility the financial services sector experiences. Therefore, it’s vital to leverage automation technology today to improve business efficiency to limit the impact of future events on your customers and your employees.
As customers increasingly handle more of their business online, banks that want to remain competitive must embrace the transition to digital operations. RPA is a practical, cost-effective way to boost your velocity toward that transformation and gain a competitive edge. Learn more about how RPA can help your bank stay secure and engage the demands of a post-pandemic world by subscribing to our blog or reading our other resources here.