The Role of Robotic Process Automation (RPA) in Finance during COVID-19

The implications of COVID-19 for the performance of financial firms, implications which are due to increased unemployment rates, rising liquidity concerns, or the forecasted wave of loan modification requests (to name but a few), require that industry leaders find adequate means to handle the upcoming challenges. Is the use of robotic process automation in finance among those means?

Let’s take a look at some findings about the role of RPA in finance prior to the pandemic. According to a Gartner research paper from October 2019, based on interviews with over 150 corporate controllers, chief accounting officers and chief accounting leaders, avoidable rework in accounting departments can take up to a third from the overall time of a full-time employee.

Software robots, with their high capacity to complete rule based tasks fast and quasi error free (that is, efficient), are perfectly fit to help you fend off this avoidable rework. For a company with 40 full-time accounting staff, the savings amount to 25,000 hours per year at a cost of $878,000.

A Bain survey from June 2020 found that an impressive 95% of the financial services companies were planning to adapt to the new, post-COVID19, economic order by taking action towards digital transformation, more precisely, towards the acceleration of automation initiatives.

The pandemic-related additional costs, as well as the profound changes in human-to-human interaction due, at least in part, to the prominence gained by remote work, can be better managed by companies with a constant pace of digital development. Business resilience and even prosperity in these difficult times do not illustrate wishful thinking, such features are part and parcel of the expected positive consequences of leveraging RPA in finance during COVID-19.

In fact, finance companies seem to have pioneered reliance on RPA soon after the virus outbreak, in order to put up with the 60% of back office employees that had to be put on a leave of absence. Bots were charged with claims and revenue management, and the outstanding results reinforced implementation plans for such a wide majority of firms.

How RPA in finance can help during COVID-19

The best, practice-oriented way to understand the role of RPA in finance during these difficult economic times, is to look at its application areas. In fact, the financial industry and software robots are “a match made in heaven”, given that a good deal of the basic processes that ought to be carried out (e.g., financial statement production, card activation, account opening, etc.) are low complexity and high volume manual processes.

1. Verification and task organization

Software robots can scan internal (the bank’s customer data records) and external (e.g., the business register of the Chamber of Commerce, social media, etc.) sources and gather the necessary information to carry out each individual task. They can then fill in an Excel sheet with data organised according to the specific requirements of each task.

At this point, human analysts can take over the software output in the form of nicely arranged data. The review of priority cases can thus be done much more accurately and timely. A thorough verification process is crucial for Customer Due Diligence (CDD) and Know-Your-Customer (KYC) operations, because it can bring to light sensitive information about customers’ past illegitimate activities.

What is more, bots remove the tedious, burdensome, and nerve-wracking job of populating reports and Excel sheets from the staff’s shoulders, allowing them to focus on more complex decision making. And this is not all! Using the joint forces of RPA and machine learning technology, companies can streamline the process even more by automating document capture and desktop virtualization.

2. Credit scoring and fraud detection

A well known benefit of robotic process automation is the possibility to manage more than one database at the same time, and thereby perform more comprehensive data searches. By doing this, bots maximise the probability of identifying any suspicious activity in the bank’s transaction data. On top of that, the software can provide elaborate reports of the findings, which can be then passed on to human employees.

Natural Language Processing (NLP) or optical character recognition (OCR), an RPA platform allows the processing of semi-structured paper-based content, e.g., invoices. By leveraging the power of cognitive automation, banks can reduce both the financial and the time cost required by processes like the above mentioned.

3. Bank reconciliations

The automation of bank statement download workflows simplifies the reconciliation process. At the same time, it reconciles balance and transactions to core finance sub-systems. The bots can also create more balanced journal entries, and store them in appropriate folders. This can improve the organisation of the business workflow, which is no little thing in the context of COVID-19, when things are likely to be chaotic and more difficult to be kept in control.

4. Financial review preparation

Software robots ensure that data movement between multiple core banking applications can be more easily consolidated, and start to play their role in executive reporting. Readable reports can be created by clarifying the data; this activity is sustained by easier formatting between applications like Excel or Adobe.

5. Accounts payable processing

Automating this process provides an easier way to setup and carry on the processes involved in paying different vendors, and to create workflows for accounts payable approvals. As you may know by now, data entry is among the top areas of expertise for RPA.

Software robots can accurately process the data, e.g., enter data to complete payment preparation and processing. What is more, they can also process payments and bulk payment files for sub-system journal entries.

Conclusion

According to a 2019 survey by The Economist, “Advance of Automation”, 59%

of Finance & Accounting leaders believe that RPA will make their business more competitive over the next two years. It’s the benefits of robotic process automation in finance:, the ease of building automations visually, easy access to complete audit trails, fast and accurate reporting, allowing the staff to focus on high value, strategic activities like deep analytics and advisory support, etc. - that fully explain this high percentage of industry leaders who would bet on the potential of RPA. Its roles in the minimisation of business risks, and in driving sustainable growth, are particularly relevant for RPA in finance during COVID-19.

If you were inspired by the potential of automation to help your company thrive during the time of the coronavirus pandemic, download our latest whitepaper: Thought Leaders Survey:

How Are Australian Companies Leveraging Automation?, where we interviewed 2000+ leaders about their future automation plans.

About Daniel Pullen (the author)

Daniel is General Manager at CiGen, one of the first dedicated Robotic Process Automation companies based in Australia. He is passionate about intelligent automation, robotics automation consulting and bringing the benefits of digital robotics into the workplace.