Despite being one of the earliest adopters of Robotic Process Automation (RPA), recent studies on RPA in Banking Finance are reporting interesting findings, particularly in the Asia Pacific (APAC) region. According to Blue Prism, based on their 2022 ‘RPA in the APAC Financial Services Sector‘ Report, RPA adoption in the APAC region’s financial services industry has been disproportionately lower than that of the rest of the world.
While 78 per cent of financial services organisations in Australia are currently using RPA solutions and technologies, Malaysia and Singapore are far from catching up, with only 44 per cent and 28 per cent of RPA adoption, respectively. As the global Intelligent Document Processing (IDP) market is expected to reach US$6324.38 million by 2028, it becomes imperative to enhance RPA solutions to maintain a competitive edge.
This article aims to uncover the untapped potential of RPA particularly for Malaysian financial institutions and how it can revolutionise business operations in the industry.
What is RPA, and how does it work?
Robotic Process Automation (RPA) is an automation technology that mimics repetitive human tasks using rules-based processes. Unlike Artificial Intelligence (AI), RPA operates based on predefined rules and sequences without learning from data over time. While AI recognises patterns and learns, RPA follows set instructions.
RPA finds extensive use in the banking and finance sector, where it addresses time-consuming and tedious tasks. Over a third of global RPA use cases are in financial and accounting industries. RPA streamlines processes like customer onboarding and loan processing, saving time and reducing costs. It’s essential to note that RPA has evolved to include AI processes, leading to the emergence of Intelligent Automation (IA).
Solving automation problems in banking efficiently with RPA
RPA offers significant advantages to financial institutions, enhancing their competitive edge by boosting productivity and efficiency. By automating repetitive tasks, RPA allows employees to focus on more complex and impactful responsibilities, reducing human errors in data processing by up to 90 to 100 per cent.
On top of that, RPA improves customer service by automating query resolution, reducing response times and significantly cutting costs in operations. Take the Vietnamese bank, TPBank, for instance. Implementing RPA with the help of akaBot, as seen in the case of TPBank, led to a remarkable 300 per cent return on investment (ROI) within just three years. HSBC, one of the world’s largest banking and financial services organisations, has also invested massively in RPA to streamline over 500 processes across its operations, resulting in over US$2 billion of operational savings.
In banking and finance, RPA proves highly effective for regulatory compliance. The banking and financial industry is highly regulated with ever-changing compliance standards. The complex nature of the further complicates operational processes and lowers efficiency. In this instance, RPA serves as a valuable tool for banking and financial institutions to streamline and automate their regulatory compliance by performing the following functions:
- Repetitive compliance task automation
- Monitoring compliance in real-time
- Processes for standardising compliance
- Improving the audit trail and documentation
- Improving the accuracy and integrity of data
So why is Malaysia slower to adopt RPA?
Despite these benefits, akaBot’s findings show that 69 per cent of the organisations in the Malaysian market cite implementation costs as the most significant factor that deters them from adopting RPA solutions. Most financial institutions remain sceptical about automation and AI over hesitations on high upfront costs. On top of reservations over how efficient and cost-effective the solutions can be in the long run, these companies are also concerned about how they can accurately evaluate their ROI.
Also Read: Banking’s next chapter: How DLT is taking transactions to the future
Additionally, taking the first steps of RPA adoption comes with its own set of challenges. As banking and finance deal with sensitive information, implementing automation solutions will need to fit within the strict rules and regulations to ensure data security. One way RPA helps with this aspect of regulatory compliance is by recording every process performed to ensure transparency for future financial audits. Furthermore, RPA solutions can help to ensure an extra layer of security by protecting sensitive financial and personal data.
Other than that, RPA adoption can also be restricted in the early phases by legacy infrastructures and complexities in process standardisation. However, these issues can only be solved by implementing automation. RPA solves the former issue by offering an integration solution to consolidate legacy systems with modern cloud-based applications and APIs. This makes it easier for the company to update its systems in the future while easing the process of data migration and reducing maintenance costs over time.
Meanwhile, pairing RPA with Process Mining can help to automatically analyse and standardise business processes in an organisation at a fraction of the time required, eliminating another significant hurdle for organisations.
The future of RPA in Malaysia’s banking and finance sector
The RPA market in Malaysia is witnessing a significant trend of migration towards Asian-based RPA platforms. Nearly 74 per cent of organisations across industries are either actively re-platforming or seriously considering it. This trend is driven by a wave of early adopters, as 26 per cent have already made the switch, with some opting for platform changes within specific business units.
The reasons are compelling: Asian platforms offer cost advantages, and they come with a deeper understanding of regional nuances, making them more adaptable to local needs. Companies that have yet to implement any RPA solutions should start small and keep the investment to a minimum to avoid burning through a large sum of money in a short period.
On top of that, finding platforms like akaBot with the local workforce, supported by FPT Malaysia, helps to ensure understanding within a local context and satisfactory customer support. Exploring a double-platform approach, where one platform handles front-office tasks and another tackles back-office automation, can further optimise costs and streamline operations.
Also Read: Gen AI in banking: How to ensure a successful transformation for an age-old industry
While initially focused on automating mundane tasks, the future lies in hybrid RPA, which empowers virtual robots with artificial intelligence (AI). This hybrid RPA, as it’s called, will unlock a new level of capabilities, enabling robots to handle more complex tasks, learn from data, and even make autonomous decisions.
For Malaysian banks, this could mean smarter loan processing, using AI to personalise financial services and more. While the full potential of AI-powered RPA is still being explored, some initial steps can be taken today. Implementing simple AI features like Intelligent Document Processing (IDP) in back-office tasks like invoice processing can significantly improve efficiency and accuracy.
Malaysian banks should approach RPA strategically, utilising process mining to map existing workflows and identify areas for improvement. This ensures automation targets the right processes, eliminating inefficiencies instead of perpetuating them. Remember, RPA is a tool, not a solution. Focus on user experience, designing robots that augment human capabilities rather than replace them. Invest in employee upskilling, data security, and compliance for a successful and sustainable RPA journey.
Leading the way with RPA
In a nutshell, the journey towards revolutionising Malaysia’s banking and finance industry with RPA requires an understanding and commitment to the transformative advantages of modern technology.
The potential rewards in terms of efficiency, time and cost savings, as well as better regulatory compliance, are only a select few of the many benefits of RPA implementation in the banking and finance industry. To find out more about RPA and how it can help your organisation, visit akabot.com for more information.
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