RPA in finance extends automation into the banking sector. Why is it so important? In our opinion, the reason is simple: it liberates the workforce from tedious, monotonous tasks and transitions it towards the processes requiring more thinking. For example, the appearance of Automatic Teller Machines allowed banks to transfer many specialists with Bachelor’s degrees into risk analysis or loan services. In this article, we’ll look at the benefits of the technology and even some use cases of utilizing RPA for finance. We hope this article will serve as the ultimate guide regarding all the intricacies of the involved technology.
What is RPA in Finance and Accounting?
To understand the impact of RPA in finance, we first have to review the essence of the technology. RPA, or Robotic Process Automation, is a technology that automates repetitive tasks using software robots. This innovation aims to mimic human actions, such as data entry. RPA works with diverging industries ranging from engineering to sociology and even literature studies. Ultimately, the reason for using RPA is prosaic: it enhances efficiency and reduces errors by quickly processing monotonous data-related tasks. All this frees up human resources for more valuable objectives.
As one can guess from the definition above, RPA, or Robotic Process Automation, has the capability to revolutionize Finance and Accounting. How exactly? It streamlines many repetitive tasks, as mentioned above. Software robots help reduce workload regarding data entry and invoice processing. These robots can also proceed with more complex tasks these days. For example, RPA for finance deals with credit risk calculation or the analysis of insurance payouts. For financial professionals, RPA means more time for strategic analysis and decision-making. It’s a game-changer in automating routine operations and accelerating financial processes. In the future, more and more banking sector workers will have the opportunity to move towards financial analytics.
Five Ways to Use Robotic Process Automation in Finance and Accounting
Enhance Data Entry
Data entry is one of the core problems for modern banks. Many types of financial transactions have complex data entry forms that can confuse even experienced professionals. This issue is so severe that banks regularly lose tremendous funds due to problems with data entry. As a staff writer for Ars Technica, Timothy B. Lee, reported in his article, Citibank lost 500 million dollars due to incorrect data entry in 2021. Due to the complex UI within a loan calculation app, a subcontractor in India entered an incorrect sum for some interest payments. The judiciary system refused to offer compensation to the bank. This is where RPA in finance shines. RPA streamlines tedious data entry tasks, ensuring your financial records remain error-free. This means the best way to use RPA in finance is to assign it to data entry tasks. Due to being automatic, these tools will have no problems filling in the correct fields as long as you give them proper instructions.
Speed Up Invoice Processing
Data entry touches upon the users of financial services, too. How exactly? When performing invoice payments, these individuals must enter vital data to proceed. RPA in finance solves this problem once and for all by making many relevant steps automatic. For instance, a good RPA can connect your accounts in different banks to pull the right credentials and require no manual entry. The bank workers also don’t need to do anything with the payments: the automatic tools can check every aspect of the transactions. For instance, RPA tools may review if the banking accounts have no connection to illegal activities. In the past, this processing had to be done by the banking workers. With this approach, only the most unique cases will receive the attention of the specialists. Ultimately, RPA allows one to automate invoice validation and payment. This ensures swift transactions and optimizes cash flow management. Modern users no longer have to wait several days for transactions. It’s possible to send cash between multiple countries in minutes now.
Improve Compliance
A significant problem with many traditional accounting systems in the banking sector is that they require manual analysis of all supporting documents for the clients. For example, any documents relating to the enterprise rights of the clients used to require manual checks that could take weeks to complete. To approve a loan for a business, one had to collect a tremendous number of documents. This paperwork was problematic for the bank workers and the business professionals because one party had multiple documents to analyze, and the other had to collect them from various state organizations. Tracking compliance was difficult in those conditions. This problem opened a path for diverging illegal activities. Proper manipulation of the documents was enough for tax evasion or money laundering. With the rise of the Internet, many documents are now online-based. Banks can now check most of them via the official databases available on the Internet. This means the majority of compliance tasks are now open to automation. Instead of having the experts check everything manually, you can use the relevant APIs to quickly review all the data from the key websites. In this respect, RPA helps maintain compliance by systematically tracking and documenting financial processes, ensuring adherence to regulations.
Accelerate Report Generation
A common request for many financial services is the generation of reports. For instance, government organizations tend to require the breakdown of all financial activities of a person over a certain period to offer employment or some privileges. The majority of the information about financial activities is stored within the banks in an organized manner. This aspect makes the information easy to automate. All one has to do is store the data digitally and let the robotic assistants review the key points. In this light, a strong use case for RPA is to generate comprehensive financial reports. Why is this so advantageous? RPA in accounting is extremely fast, being capable of providing actionable insights for informed decision-making.
Enhance Customer Service
Faster information processing ultimately enables enhanced customer service. Firstly, you can use RPA to swiftly resolve inquiries, ensuring a seamless financial experience for clients. If you generate reports or analyze invoices fast, your banking specialists would require several minutes to answer the client’s requests instead of multiple hours or even days. Secondly, modern developments in AI are notable for their ability to enhance RPA. It’s possible to create assistants that answer diverse user questions based on large language models (LLMs). While this technology is yet to be implemented massively, modern innovations enable chatbots to produce realistic human-like text. The preceding year saw the rise of ChatGPT, which, while not without disadvantages, delivers extremely coherent answers to most human questions. Yes, such models can hallucinate and, thus, require the attention of the experts to limit incorrect answers. Nonetheless, they represent a revolution leading to a new wave of robotic process automation in finance.
How RPA Transforms Finance and Accounting
Robotic Process Automation (RPA) is a game-changer in finance and accounting. The reason for this assertion is simple: the technology offers profound transformation without demanding technical expertise.
Error reduction
One of its most significant advantages is error reduction. RPA meticulously handles data entry and transaction processing, ensuring financial records remain accurate and reliable.
Reducing time waste
Moreover, the automation of the key tasks is notable for reducing the time spent on low-complexity objectives. RPA doesn’t just enhance accuracy and efficiency; it also ends in substantial cost savings by reducing the need for manual labor. The banks promoting RPA can dedicate a significant part of their workforce to complex analytical tasks rather than something simple such as data entry. In the past, the work of competent individuals with Bachelor’s degrees was wasted on these objectives. Additionally, RPA is critical in ensuring compliance with regulatory standards, a cornerstone of the financial industry. With precise data extraction and rapid report generation, RPA empowers financial executives to make informed, data-driven decisions.
Improved customer service
Lastly, improved customer service is another benefit, as RPA enables faster response times and better product delivery. Robotic process automation in accounting reduces the need to generate reports automatically. In this way, you can rapidly inform the clients about certain changes in their work. RPA is also agnostic concerning the field it functions in. Its adaptability ensures the technology is tailored to meet specific needs of finance and accounting processes, providing flexibility in implementation.
Summary
In summary, RPA’s impact on finance and accounting is transformative because the platform in question can perform the following activities:
simplifying operations;
reducing costs;
improving accuracy;
remaining accessible to an educated but non-technical audience.