RPA in Private Banking

The private banking industry relies heavily on customer recommendations to provide superior experiences.

Yet it’s hard to satisfy clients—especially when they get the same information whenever they call your relationship managers or support agents with their transaction queries.

Banks can’t afford such friction in routine, manual banking processes.

Robotic process automation (RPA) completes mundane, repetitive tasks faster, with fewer or no errors, and at scale, freeing human staff to focus on core banking activities.

This post explores how RPA helps private banking service providers control costs, meet compliance demands, scale with ease, and deliver better employee and customer experiences.

How do private banks benefit from RPA?

When the pandemic struck, private banks were in a difficult starting position thanks to the previous season of declining profits. McKinsey’s 2020 Private Banking Survey shows the profit pool for European banks fell from €13.5 billion in 2018 to €13.3 billion despite soaring markets in 2019.

From the survey, high pandemic-induced trading volumes gave private banks a strong start in the first quarter of 2020, but that came with more challenges, including:

• An uncertain business environment
• A shift toward remote working
• Pressures on revenues and profits
• Increased client demand for digitally enabled remote engagement

Pre-pandemic, private banks were already under pressure to meet ever-changing client and employee expectations. Their plans included front and back office digitization to increase their effectiveness and optimizing their value proposition and pricing.

Things like cost reduction, advanced analytics, sustainable investing, and mergers and acquisitions weren’t top priorities. But the combination of pandemic-induced challenges required the industry to speed up its digital transformation.

Increased economic uncertainty sparked major changes in the banking and financial services space around regulation, compliance, and customer interaction. They needed to respond promptly to customers as they sought financial support and guidance in a turbulent season.

During tumultuous market seasons, such as the pandemic and other major life changes, private bankers:

• Explain to customers their options and investment risk
• Work with clients to refine their plans and financial transactions
• Reduce friction when connecting customers to additional banking resources

So it’s no surprise client relationships came into sharper focus during the pandemic, forcing private bankers to up their game and deliver their best insights.

Yet, banks still grapple with massive amounts of unstructured data spread across paper and digital documents like emails, contracts, KYC documents, or trade agreements.

All these documents are crucial for prompt document delivery and creating strong customer experiences. Private bankers have to manually scour through paperwork to:

• Validate their veracity
• Extract customer data
• Update the KYC platform

Automation replaces such tedious jobs with robot workers so private bankers can focus on onboarding clients, financial advising, or investigating alerts. This saves private banks millions of hours lost annually on human work tasks.

How RPA benefits the private banking industry

While 2020 was a challenging year for businesses worldwide, financial institutions—especially banks—relied heavily on RPA to:

• Streamline internal operations
• Improve client service
• Boost revenue and profits

Today, banks are adding intelligent automation technologies (AI and ML) to unlock new possibilities and expand automation into multiple areas.

RPA uses software robots to perform the rote, manual tasks that human employees do. The difference is that bots work faster and can save private banks hundreds of hours on completing front- and back-office tasks.

RPA bots mimic most human-computer interactions, working with any business system or application, just like employees do. Bots combine the insight and empathy of your front-line staff with the speed and intelligence of artificial intelligence (AI) ensuring easier compliance and innovation.

With the right RPA program, private banks can apply a wide range of automation services including attended, unattended, hybrid robot models, and machine learning (ML) models. These tools help banks:

• Reduce regulatory compliance burdens and risk of regulatory fines
• Manage demand and customer expectations
• Achieve operational efficiency on central functions such as Know-Your-Customer (KYC) and mortgage processing 

Top RPA use cases in private banking

RPA isn’t just a buzzword for the future. It’s key to eliminating resource wastage on regulatory compliance demands while creating a digitally transformed private banking institution.

Understanding how private banks can succeed with an RPA implementation reduces compliance costs, improves your bank’s risk profile, and helps you scale for long-term growth and profitability.

Below, we explore the top RPA use cases in private banking, including:

• KYC and Anti-money laundering (AML) compliance
• Customer onboarding
• Mortgage processing and remediation
• Alerts case management
• Fraud analysis
• Control testing and evidence requirements

KYC and anti-money laundering (AML) compliance

Customer onboarding is a highly regulated process that safeguards private banks and their clients. However, manual processes are rife in the KYC and customer due diligence functions, making them lengthy, complex, and lacking in customer satisfaction.

Automating these processes creates prompt onboarding, which speeds up adoption and maintains security for your customer and bank. 

Documents like pay stubs, bank statements, and registration certificates can be unstructured or semi-structured compared to passports, tax returns, or identity cards. RPA bots can extract data from these customer documents, saving a lot of human manual efforts and costs, while reducing common data entry errors. The result is a robust and delightful end-to-end customer experience.

For example, banks can handle the surge in loan application requests like what happened with the paycheck protection (PPP) loans. A banking robot can take just days to deploy, delivering benefits such as:

• Simplifying the loan application submission process for bank customers
• Accelerating loan processing capacity
• Freeing your bank’s agents to respond to customer queries, review and sign reports, and foster customer retention

Anti-money laundering (AML) compliance

PWC’s Global Economic Crime and Fraud Survey lists money laundering among the top five costliest frauds besides insider trading, tax fraud, corruption, and bribery. They’re harder to predict, monitor, and result in fines, lost business, or reputational harm.

RPA helps private banks:

• Identify AML cases faster
• Enhance monitoring procedures like customer profiling and cross border transactions
• Reduce compliance monitoring costs
• Improve the effectiveness of risk surveillance
• Address suspicious activity
• Report AML cases to regulatory bodies with 100% accuracy ensuring no fines

Mortgage processing and remediation

Remediations—which result from customer complaints, audit findings, and regulatory guidelines—are important for private banks.

They ensure you uphold industry standards and satisfy your customers. And can involve incorrect interest rate charges or inaccurate deductions, all of which are part of a financial institution’s lifecycle.

A bank with high remediations struggles to respond to its customers’ requests on time. RPA bots can streamline the mortgage remediation and lending process, helping your customer service agents review client complaints, audit, and analyze their loan portfolios.

Bots can also extract client information and other data, put it in the correct format, identify discrepancies, and give an accurate, summarized report for incident tracking. This way, your agents have more control over mortgage processing and remediation.

Alerts case management

Banks continuously screen millions of customers and transactions. Yet screening platforms can produce many false alerts. Your analysts end up wasting time investigating such alerts, which could otherwise be investigated by RPA bots.

Robots can pull reports on past transactions, KYC data, and historical Suspicious Activity Report (SAR) filings to get the evidence you need to demand justice.

Robots scan through the customer’s history in seconds, then prepare a dossier for your case analysts to review and intervene. This way, your customers will always have a contact person to talk to when distressed.

Fraud analysis

Scroll through any website or flip any news channel and chances are there’s a story about fraud or economic crimes.

Fortunately, for private banks, RPA bots can detect fraud of any kind and offer a quick review of all history.

Bots leave an audit trail of every task they perform across your core banking processes, which helps private banks by:

• Making oversight easier for fraud analysts
• Delivering high accuracy results
• Ensuring prompt, reliable fraud identification
• Boosting compliance
• Preventing losses in alerts investigation

Fraud detection tools such as Inscribe help banks identify synthetic identities, nefarious applications, and fraudulent documents.

The tool automates document reviewing processes for bank statements, customer paperwork, and instantaneously detects fake and manipulated documents.

Inscribe’s automation and fraud detection forensically examines documents, extract names, dates, addresses, and other critical transaction information. Documents go through rigorous checks, which alert you in case of any fraud, saving time on manual reviews and reducing fraud loss.

Control testing and evidence requirements

Private banks need control testing to manage risk in their financial management activities.

RPA bots perform crucial data entry tasks, execute test procedures and exceptions, and prepare documentation for your auditors to assess.

A back-office employee’s errors can cost the bank heavily in financial and reputational terms. Automation establishes accurate data collection and results, delivering time, cost, and efficiency savings.

When processing loans, bots can perform control checks, collecting the required customer information and documents, and send automated alerts for suspect candidates for further investigation.

Automation speeds up control testing, reducing the manual time taken for data collection and anomaly search. It also gives your auditors more time to check on suspect scenarios instead of manual, mundane data collection and entry tasks.

Reinvent your private banking models

Customers want seamless and instant experiences. But legacy systems can impact the speed of your bank’s customer service.

Successful private banks turn to automation technology to reinvent their relationship management models, enable faster, more accurate, and cost-efficient services, and accelerate growth opportunities.

Want to learn? Talk to an expert to find out how Inscribe can supercharge your risk and ops teams.