Fintech Evolution: RPA in the World of Finance

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Fintech, short for Financial Technology, is the innovative use of technology in the design and delivery of financial services and it is transforming the banking world as we know it, says Henri Arslanian, the Chairman of Fintech Association of Hong Kong. Henri names Artificial Intelligence, peer-to-peer lending, big data, blockchain, crowdfunding, digital payments, and robo-advisors as some of the advanced solutions under the Fintech revolution, driving one of the biggest transformations in the financial history.

The digital transformation of BFSI industry has opened new avenues for non-domain specific players to enter the field. McKinsey reported that Tech giants are set to grab up to 40% of the US financial services revenues from the incumbent banks. The likes of Apple, Google, and Amazon are predating over the loyal user bases of existing financial institutions. Having established their credibility and trust among the consumers with high-end tech products, these behemoths are causing a total mutation of the industry. This ongoing transformation will have a revolutionary effect on the entire sector, causing maximum impact on the required human workforce in terms of their personality, backgrounds, and skill sets.

The Fintech revolution is behind the wheel of this digitally transforming BFSI wagon, with RPA riding as the shotgun.

In their recent report, Forrester predicted the staggering growth of RPA with its market reaching $2.9 Billion by 2020. Even the mere idea of Robots seemed too far-fetched and fantasy-like at a time. To have it actually integrated into our practical lives was absolutely unfathomable. Yet, here we are today, with not only automation, but smart, cognitive automation and intelligent robots overtaking tedious processes and increasing productivity by eliminating the scope for errors.

Real-life applications of RPA in Finance

As per McKinsey, additional labor productivity from robotic process automation could equal the output of 110 million to 140 million full-time workers by 2025.

This does not mean that your finance team will be replaced by mechanical, humanoid robots. Instead, RPA is like an invisible automated hand that effectively takes over the labor-intensive financial processes, allowing the human assets a window to breathe and focus on the tasks that require strategic understanding. By doing so, RPA not only enhances productivity, but also saves time and costs. Instead of disrupting the existing processes and wreaking havoc across the sector, the technology simply deploys bots capable of doing the exact same work with much higher efficiency.

Some of the examples of RPA’s practical applications in the financial processes are:

  • Onboarding of a new customer, employee, supplier, or vendor
  • Regular, cumbersome data-entry and transcribing tasks
  • Day-end, month-end, or year-end closing
  • Consolidation and reporting
  • Loan processing and handling
  • Claim processing and tracking
  • Customer complain processing

RPA deriving key business outcomes

In addition to imparting high effectiveness to the mundane tasks, RPA is essentially streamlining the core functions, and operations of finance industy. The technology, as it exists, is simple to use and does not require any extra employee training. It enables businesses across the industry to gain an in-depth visibility of the efforts and steps that go into a process fulfillment. RPA creates a visual pattern by consolidating the steps in the path it takes. This offers a bird’s-eye-view to the day-to-day processes, allowing the businesses to detect gaps and analyse inefficiencies in them. By providing the data required to make informed decisions, such insights help organizations to optimize and align their existing processes to achieve the desired business goals.

The speed and efficiency of RPA also reduces, if not completely eliminates, the risks and threats caused by human errors. With increased accuracy in the performed tasks, RPA also facilitates timeliness in reporting, financial closures, accounting, and transactions.

Implementing RPA into financial processes

RPA implementation require a step-by-step approach and a few proactive measures.

By prioritizing the workflow based on importance and ROI, the organizations should identify which processes can be 100% automated, which processes require some level of manual intervention, and which processes cannot be completed without human assistance. Doing so will help lay down a roadmap for RPA implementation.

For the organizations to fully leverage the benefits that RPA has to offer and to ensure a successful implementation, they need to understand the scope of requirements and business objectives. Since, RPA does not disrupt the established processes and simply automate them, it is critical to standardize the workflow before deploying the bots. Post-standardization, the next step is to perform a comprehensive analysis of available RPA tools to determine which best aligns with the overall goals.

After this comes defining RACI matrix, setting up the governance mechanism, and establishing the metrics to measure the RPI efficiency. By standardizing a change management procedure, businesses can obtain support and active collaboration from all those who will be impacted or influenced by the RPA implementation.

BOT creation and maintenance

When the tools are decided, processes are identified, and workflows are standardized, the next stage involves development of BOT framework that will be deployed for process automation. A process validation checklist proves to be of great help for tracking and ensuring that the implementation roadmap is properly being followed.

By performing unit testing on every BOT deployed for individual automated processes, businesses can proactively determine the gap areas and take the required remedial actions before the final deployment. After validating the integration of workflows for identifying loopholes and taking corrective measures, the BOTs can be deployed in the business environment for use.

Even after the final deployment, continuous maintenance and support is optimize the BOTS according to any changes in the workflow, application levels, BOT configuration, production environment, or framework.

Cigniti’s expertise in Fintech testing and RPA rollout has helped organizations reduce processing costs by up to 80%. Cigniti Technology has a dedicated TCoE for financial application testing domain. Our testing consultants thoroughly understand systems, network and software architecture, and our frameworks are designed after rigorous research by testing experts. More than 50% of our testing professionals are Certified Software Testing professionals with CSTE and ISTQB, and are equipped with relevant Industry certifications while having in-depth domain expertise. Contact us today.