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Realising the Opportunity of Robotic Process Automation in Banking

POSTED BY Maite Alves Bezerra
With the increasing demand for digital transformation, banks and other FIs (Financial Institutions) have been earlier adopters of smart technologies such as RPA (Robotic Process Automation), Roboadvisors and Chatbots. The brutal industry competition, along with the appearance of disruptive new entrants that are well informed and proficient in the use of modern technologies, have challenged traditional players, especially as they often rely on legacy systems that can hardly be upgraded.

RPA has been portrayed as the solution to many FIs’ problems, from back-office activities to customer experience. However, in practice, it has been much less effective. Companies are struggling to develop appropriate pre- and post-automation strategies resulting in complex and expensive automation process that can only perform very specific tasks. Therefore, FIs will have to stop considering RPA purely as an IT project. While RPA is not treated as the core of FIs’ strategy, it will continue to operate below its full potential.

Apart from its predicted market expansion, Roboadvisors are growing at a slower speed than estimated years ago. Human confidence in robots managing their savings was taken for granted and it is proving to be the main challenge to fully automated roboadvisor companies. Chatbots are becoming more and more popular, but not necessarily smarter. The struggles to learn different language variations and more than one idiom is proving a major limitation. Companies will have to invest heavily in their chatbots’ learning process (machine learning and AI), so they can differentiate from competitors and finally show value to the end customers.

Juniper Research has found that RPA revenues in banking will reach $1.2 billion by 2023. With an estimated revenue above $200 million in 2018; growth of over 400% during the forecast period

Figure 2: Total Software & Services RPA Revenue in Banking & Financial Services ($m), Split by 8 Key Regions: 2023