Gavin Mee, Area Vice President Sales for the UK and Ireland at UiPath, explains what Robotic Process Automation is and how it can benefit fintech.
The pandemic has shifted the way we use technology and in the driver’s seat of this change sits fintech. A recent survey found that 66% of consumers were regularly using fintech between March and July 2020, an increase of 50% compared with pre-lockdown figures. Many are heading to cashless payments and e-commerce to protect their physical health. At the same time, business leaders are reaching for technology that can provide them with a deeper understanding of their financial health at a time of crisis.
Even before this explosion of interest, fintech was already a crowded space. Now, with even more players in the market and the demand for new solutions growing at a rate of knots, how are fintechs expected to keep up with their fast and nimble competitors?
One solution is to look at improving operational efficiency. By saving time and money in back office processes and by revaluating compliance practises, fintechs can better use their resources to do the work that will help them to stand out and thrive in the ever-growing pool of competition.
This is where Robotic Process Automation (RPA) can help. RPA software operates a computer, mouse and keyboard like a human – but virtually. It’s like having a digital junior colleague who can do rules-based tasks, ranging from simple to more complex, that you’ve taught it to do.
The financial sector is rule-based, highly regulated and data-driven. These factors make fintech the perfect candidate for RPA. Fintech providers can pass off repetitive, low-value tasks such as data entry, settlements and invoice processing to software robots. This leaves them with more time in the day to do the work that counts. In short, this will benefit fintech in two key areas: becoming more competitive and adhering to regulation.
Remaining competitive
Despite the jump in demand, the UK fintech industry has seen a 30% reduction in investment since the advent of the pandemic. Therefore, more than ever fintechs needs to look internally to find new ways to stay competitive.
Let’s use a wealth management app as an example. For an employee, downloading global investment information, performing validations, searching for trade deals, identifying unmatched and pending trades and generating relevant content, is a hugely time-consuming process. In contrast, a software robot can scan, extract and process data from multiple sources 24/7 without fatigue and update the app and customer automatically.
The benefits of automating these time-consuming tasks are threefold. Firstly, it saves money allowing the fintech firm to retain a competitive edge. Secondly, employees are now free to spend less time collating and processing data and more time on high-value strategic decisions and complicated customer support. Thirdly, the customer has access to the most up-to-date information at all times, improving the customer experience and therefore increasing the likelihood of loyalty.
RPA can also improve operational efficiency by integrating new fintech solutions with old legacy systems. While some fintech will have been developed on new platforms, the reality for many businesses is that their financial technology will have to interact with legacy systems that have been in place for decades. These systems have made larger organisation sluggish in responding to digital transformation and are in some cases it is holding them back from competing with more agile fintech start-ups.
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RPA software can seamlessly move data across boundaries, from one application to another, mimicking activities such as clicking, typing, and moving between windows. Therefore, firms do not need to uproot and replace their current systems, but rather RPA can orchestrate workflows across the two and thus level the playing field.
Put simply, RPA saves time and money, allowing fintechs to focus resources on innovation and customer service. In such a competitive space and uniquely difficult economic circumstances, RPA can give fintech the boost it needs to keep up with the realities of 2020.
Keeping compliant
The routine and hassles of compliance and reporting, not to mention the threat of fines, is enough to keep any financial services firm on its toes.
Compliance processes carried out by human are always open to mistakes, no matter how accurate we aim to be. Software robots, on the other hand, are programmed to strictly follow the same steps every time and thus do not fall victim to the same blunders as all humans inevitably do.
Software robots use RPA and artificial intelligence (AI) to capture the necessary data and automate compliance reporting to streamline audits, reduce errors, and increase accessible audit trails. If there is an inaccuracy that requires the personal touch or a loop in the workflow where a decision is needed, the software robot can pass responsibility back to their human colleague. This ensures that humans remain ultimately in charge of the process but without having to do all the legwork.
This in turn provides better risk management and compliance, higher accuracy, better cycle times and improved throughput. Without the need to review and approve data provided by consumers, employees, providers and partners, employees can focus on responsibilities that require reasoning and judgment.
Standing out in today’s climate is a significant feat for UK fintech companies of all sizes. Tough regulation and thinning profit margins compound this even further. However, for those fintechs that can continue to innovate and provide exceptional customer service, a huge rise in demand waits for them.
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RPA is one solution that can help companies to achieve this. With the load of time-consuming back office and compliance processes shared with software assistants, employees can focus on the work that will help them to survive and thrive during Covid-19 and beyond.
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