Two technologies – robotic process automation (RPA) and artificial intelligence (AI) – play a critical role in empowering financial institutions to rapidly automate their operations and effectively transform the entire business. But in order for intelligent process automation to work effectively with fintechs and financial institutions, application programming interfaces (APIs) need to connect them with enterprise systems.
Robotic process automation (RPA) and artificial intelligence (AI) have demonstrated they can reduce costs and employee workloads as well as significantly lower the amount of time it takes to complete manual tasks for various industries.
The global robotic process automation in BFSI (banking, financial services, and insurance) market size projects to reach $8.79 billion by 2030 and expand at a compound annual growth rate (CAGR) of 39.4% from 2023 to 2030, according to Grand View Research. Meanwhile, per a survey from the Economist Intelligence Unit, 77% of bankers believe that the ability to unlock the value of AI will be the difference between the success or failure of financial institutions.
The last five years have seen RPA and Al technologies evolve to a point where they are now beyond the hype cycle and making a visible impact in the banking and financial services industry. As a whitepaper from lBS Intelligence and Hexaware explains: “These two technologies have applications in every area of the banking value chain right from customer origination and on-boarding to the back-office processing of loans, deposits, managing investments and the closure of a customer account.”
RPA and AI Adoption
The adoption of RPA — which comprises the usage of adaptable, reusable, and non-intrusive software elements, or robots, which interact with and manage systems and applications — has helped financial institutions and accounting departments in automating repetitive manual operations, allowing employees to focus on more essential activities and gain a competitive advantage.
Basic RPA is somewhat restricted in what it can execute. For example, it can log in to an account, move files, and log out. Financial institutions use RPA to perform repetitive tasks like data entry and to automate customer service and back-office workflows. Financial institutions that utilize RPA enable their staff to focus on more complex tasks, while the RPA bots take over the commonplace activities. Additionally, robots provide 24/7 availability to handle customer issues, which significantly improves customer satisfaction.
However financial institutions can use intelligent automation to improve RPA by incorporating AI technology such as machine learning and natural language processing. By working in combination, it can then manage intricate procedures, comprehend human language, determine emotions, and react in real-time. Artificial intelligence (AI) and machine learning (ML) can also supplement RPA to handle sophisticated processes with higher accuracy and efficiency.
Conversational AI alone can transform how banks engage with customers to create extraordinary and more personal brand experiences that foster customer acquisition, retention, and loyalty.
Intelligent Process Automation
Many financial institutions have started to rethink their operational models to leverage intelligent process automation. Technologies combined in IPA include RPA, AI, machine learning (ML), and digital process automation (DPA). While in many cases complete automation is the ultimate goal, targeted automation using IPA can bring substantial help rapidly if applied toward specific use cases in banking operations.
One of the biggest errors that financial institutions commit with their decision to automate processes is to carry out blanket automation. It is critical for banks to identify processes that will have the most impact from the automation exercise.
A key imperative for financial institutions to successfully deploy and benefit from intelligence operations will be to first upgrade legacy systems. Layering IPA technologies on legacy systems will not allow banks to realize the true benefits of the implementation. Financial institutions and fintech vendors can leverage existing IT infrastructure and bridge the gap between enterprise systems and intelligent automated solutions by taking advantage of APIs, which allows them to connect.
Many credit unions and banks seek fintech partnerships to improve their intelligent automation capabilities. Partnerships between fintechs and financial institutions are mutually beneficial. For credit unions and banks, an IPA solution tapping into new technology can extend their market reach, and connectivity to customers, provide new revenue opportunities, and better utilize current resources.
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