Robotics is the boon of science, technology and engineering that produce machine called Robot. Robot is considered to be a substitute for human actions. Use of Robotics work was introduced in 2005 to assemble cars in automotive industries and 90% car assembling work was done by Robots.
Research and development in technology and creation of scope for its application in various sector is a never ending drive. In modern times things have been getting so driven by technology that continuous technology development has been seen as an essential for survival in the 21st Century by the corporate world. In late 1980s, technology adoption stepped into Indian Banking and first example was MICR (Magnetic Ink Character Recognition) technology. India’s leading Bank SBI had first purchased computer in mid 1960s to aid the compromise of records between branches. Digital banking was started by ICICI whereas internet banking facility was introduced by ICICI for customers in 1996.
With the use of technology in Banking, the handling of transactions have become more reliable and customer friendly. Banks having robust digital infrastructure have been becoming the millennia’s penchant.
The recent development in banking sector is adoption of Robot. Artificial Intelligence (AI) brings the advantage of digitalisation to meet the competition from Fintech players that is faced by Bank. It brings the power of advanced data analytics to combat fraudulent transactions and improve compliance. It also enables Banks to manage huge volumes of data at record speed. AI develops a better understanding of customers and behaviours based on past interactions. AI functions are usually associated with the human mind such as problem solving, learning etc. Robotic process automation (RPA) is a revolutionary change in banking sector accepted globally. Robotics in Banking represents the consumerisation of banking automation. Banking Industry is facing massive competition from FinTech and other virtual banking solutions and is under tremendous pressure to optimize cost efficiency and increase productivity. RPA and AI can work together through intelligent bots. By integrating traditional RPA techniques with AI the bot can perform tasks such as recognising unstructured data, learning from human feedback and many others. Robotic Process Automation in Bank has become imperative to continually evolve, remain competitive and provide best customer service to users at minimized costs.
ICICI Bank, a leading private sector bank is the first in the country to adopt RPA. It has launched Smart Vault, a fully automated locker. Customers can access their lockers 24*7 and minimizes human interaction while operating a locker. After receiving the request from customer the advanced Radio Frequency Identification (RFID) mechanism scans and retrieves their locker using a robotic arm from a robust and secure vault. ICICI bank has also claimed that it is the first bank to deploy industrial robotic arms to count currency notes in the country. It has deployed 14 machines in 12 cities to sort the notes.
“Lakshmi” is the India’s first robot launched by City Union Bank. HDFC Bank, the country’s leading private sector Bank is first humanoid in India’ Banking. Yes Bank is first Bank in India to launch robotic based digital export and import payment solutions for Corporates. Other Indian banks viz., Axis Bank & State Bank of India has also adopted AI for improving its customer service experience and compliance.
The benefit of RPA in extending services in Banks can be summarised as under:
Automated Bank account opening: – To reduce time consuming process and increasing accuracy and productivity the Bank adopted account opening through robotics process automation.
KYC Process: – Know your customer (KYC) is a mandatory process and has to be complied by every customers. There is a huge cost involved per year on KYC process compliance. Now bank has started using RPA to validate customer data with accuracy.
Report Automation:- Banks have to prepare reports for various stakeholders with accuracy. RPA provides zero error with in time processing.
Credit Card Processing: – Generally credit card processing used to take weeks to validate the customer information and approve credit card. The delay in issuing Card cause dissatisfaction to the customers and also cost to Bank. With the help of RPA Bank can process with in an hour.
Customer Service: – Banks are boggled with customer’s queries everyday related to account information, balance information etc. It is very difficult for Banks to respond each query with in stipulated time. RPA can automate such process within real time and reduce turnaround time.
Account Closure Process: – As the numbers of customers are huge, it is a general process to get requests for closure of account on daily basis and another reason for closure of account is non submission of mandatory documents. It is easy to track such accounts and send automated notification for required documents by robotic process automation.
Fraud Detection: – As banks are on digital platform, the major concerns of the banks are to prevent fraud. RPA can track transactions and raise flag for possible fraud transaction pattern in real time reducing the delay in response.
In short, RPA has increased operational efficiency, made Risk and compliance reporting fast and easy, made the service available round the clock, helped business growth with existing data, improved implementation and scalability at a lower cost.
After the deployment of robots in locker operation by ICICI a survey was conducted for benefit of use of robotics in Bank and leading threat to employment.
Risk of Robotics Process Automation:
The top risks of RPA in Banking are as under:-
Operational Risk:- Presently our IT department works traditionally but as soon as RPA works it may not control by our IT department and there is a risk of robot downtime and operation disruption. It could also stop working due to system updates.
Compliance Risk: – Robotics process automation management is a user friendly, its management and inventory requires discipline. It requires foolproof audit trails like human workers. It requires tracking robotic work tasks.
Data Quality Risk:- As huge data are handled by Bank and a robot can reduce a back office employee’s errors when transcribing data from spreadsheet to a system. By if the data received from the front office is already in bad order or error data then robot cannot correct it. It will work on the basis of what it gets. In 2009, in RPA uses, Mortgage loan 100 times increase in some of the banks that was the reason of failure of the bank in USA.
Ethical Risk: – Bank must balance their people and technology. Simply replacing the staff by outsources or by robotic use takes its toll on morale. It is best if optimum combination of humans and technology.
The goal of technology is mostly to minimize the need for human brains, and remove the requirement for human strength. Complete digital automation denotes no human activity, no thought or association whatsoever. Since maximum financial services are merely concerned with lending or financial data, they are heading in the direction of digital automation on a large scale. Each stage in this course results in replacement of jobs by their robot counterparts. There are many who think that automation and robotics are going to changes will be an opportunity to re-examine our society’s relationship to employment itself by creating new avenues for work.
Sunil Kumar Azad
Assistant General Manager & Director,
State Bank Institute of Learning and Development, Deoghar.
