RPA in Banking: Watch for these risks


Banks’ operation has required evolution due to the increasing number of people trusting them with their money. There has been much adaptation in how these lenders help their customers, from the first bank opening in 1472 to modern institutions looking for new technology to improve efficiency. With such an increase in demand for banking services, how can these entities continue to adjust their techniques?

The answer could be RPA. Here’s what this acronym stands for, what it can do and what risks could be involved with automated banking.

What Does RPA Mean?

Those who have not heard of this concept before might need some background information to understand the potential hazards of RPA. RPA stands for robotic process automation, and it recreates how humans interact with technology. Organizations can use it to streamline simple processes people usually do to save time and money. They can free employees from completing more complex tasks using RPA for easy, repetitive jobs.

What RPA Can Do for Banking

How does it perform this work? Robotic process automation can accomplish functions and assignments such as:

  • Input data
  • Copy information between apps or workflows
  • Analyze and finish jobs
  • Log into apps

Programmers can make simple bots by recording the keystrokes a worker typically does while performing a task. They can use the recording as a model for teaching an AI if they want to expand what it can do. Some also use task mining to learn quickly, logging the workflow process as soon as a company implements it. Hybrid RPA bots begin by observing the jobs and then developing ways to complete them.

The possibilities grow when an entity uses RPA in conjunction with artificial intelligence. The technology can then read documents and detect data like names, addresses, or information on invoices. Assigning menial tasks such as these to a program instead of a human employee allows the person to address their more pressing needs without inputting paperwork.

Banks are using robotic process automation to speed up many operations in their facilities. Human error often costs this industry nearly $900,000 annually, resulting in about 25,000 hours of unproductive work. In a place where the phrase “time is money” is practically literal, they need to find ways to reduce that expense and wasted time.

The financial sector is using this technology in areas like accounts payable. All the RPA needs to do is read the document to verify the person’s data and process the payment. Giving this task to a worker could introduce mistakes and longer waiting times. Instead, robotic process automation can complete the assignment quickly, efficiently, and without error.

Another important job RPA is taking on is fraud detection. A criminal can steal information physically and electronically, but many people might not check their statements enough to notice a problem. This technology learns their purchase history to tell when they make an unusual transaction. From there, it can send an alert and lock an account if the charge was indeed fraudulent.

A bank could also use these bots for customer service and choices on lending. Potential biases and improper judgments could cease when using RPA with AI. The automation only sees the applicant’s credit history and other data to better understand whether they should lend. Also, technology can provide a person access to banking assistance at any time of day. It may then make a profile of each individual, learning how best to serve them as it develops.

Risks With RPA in Banking

While it might seem the perfect solution, robotic process automation has some concerns to watch out for — especially in such a sensitive sector. Here are some potential risks and pitfalls banks need to know about RPA.

1. Technical Difficulties

Most software requires updates and tweaks over time. In some cases, it can even crash completely and cease working. Banks must be aware that RPA could occasionally have some of these flaws. They’re excellent for working as partners with human employees, but running an entire bank on automation may be challenging. Creating a plan with IT teams before such an event occurs is essential.

They should also know that RPA does its best to mesh with all other software but can’t do it all. Banks must consult with their tech professionals to choose the proper bot. However, they may still need to change a few platforms so the automation can work with everything as it should.

2. Security

One of the biggest risks to note is possible security issues. RPA accesses sensitive data and is of great interest to hackers and thieves. They could even take over the bot itself and affect how it performs its duties. Banks must know ways to implement cybersecurity measures when handling something as important as money and Social Security numbers. Doing so could save them from losing status, customers, and credibility.

Many companies are thinking about when data attacks will happen instead of if. The number of such malicious activities rose by 15% in 2021, and businesses said they experienced 50% more breach attempts per week. Though cybercrime cost them nearly $7 billion that year, only half of United States companies say they have a security plan. Banks must prepare for the worst if they start using robotic process automation.

3. Implementation Flaws

RPAs need the right circumstances to work effectively. Banks can only use these bots on rules-based, consistent, and repetitive jobs unless they combine this software with artificial intelligence. Also, they can’t start to make judgment calls without AI.

A bank might also begin using robotic process automation on an inefficient workflow. If it doesn’t figure out how to streamline this process, the RPA won’t be as fast as possible.

Additionally, banks might forgo discussing how automation will change their jobs with their workers. Choosing not to can confuse employees about what they should and shouldn’t do. Some might object entirely to introducing automation — and banks should listen to their concerns. They may feel their skills don’t match working with an RPA or find they no longer enjoy their position.

Ways to Mitigate the Worries Regarding RPA

Because it is technology, robotic process automation can come with some flaws. However, this doesn’t mean banks must entirely give up on the bots. There are a few ways they can work to address the issues and uncertainties.

1. Prepare Ahead of Time for Delays

A bank must be ready for the RPA to go down occasionally. Whether it’s an unexpected outage or an update, IT teams must know how to tackle the absence of the bot. They also need to prepare to look for what might have gone wrong and learn how to fix it.

This knowledge may require additional training or hiring new team members, and banks should acknowledge this step. An experienced professional’s advice is always helpful when working with automation. They will know how to create an action plan for RPA delays and can discover the best places to implement it.

2. Make Data Security a Priority

Financial professionals might have known about cybersecurity’s importance before, but robotic process automation introduces new challenges. Criminals might take a greater interest in their operations knowing they have a bot, so a bank needs to increase its protections. More robust password security, two-factor authentication, and encryption are crucial ways to safeguard data from thieves. Banks can implement security features into the RPA as well.

Bots need credentials as much as human employees to ensure they don’t have access to unnecessary data. They also need restrictions on what actions they can perform, so a hacker couldn’t use a robot that only copies to write fraudulent information. A bank must also keep its RPA logs secure if they need to investigate its activity. Watching the automation’s activity could help financial institutions catch fraud before significant data breaches happen.

3. Streamlining and Employee Training

Bank leaders should ensure all places where they want to introduce the bot are already as streamlined as possible to make the most efficient use of robotic process automation. This process can also help them see where automation might not work. Working with IT professionals is a great way to identify efficiency opportunities.

Banks must also listen to what their workers have to say about RPAs. Providing support is vital to easing their apprehension if they worry about being unable to use it. Training every employee is also critical for risk management. It’s crucial to discuss any changes with current workers. Let them know their jobs are not at risk from automation and can only help their work improve.

Utilize RPA Safely

Robotic process automation could be decisive in helping the financial sector thrive. Banks could use bots to free up time for their workers to accomplish more demanding jobs while automation clears up waiting times for customers. However, institutions must learn about risks with RPAs and how they and their IT teams can tackle them.