RPA in finance: What it is & its use cases in the real world

RPA has long been used by financial firms to automate finance and accounting procedures. Robotic process automation (RPA) is the process of automating financial procedures such as data processing, calculations, reporting, and even forecasting. RPA can do up to 30 times more work in the world of finance than a human. Manual data processing, particularly that involving numbers, has always had a larger risk of human error, hence this technology has had to develop.

According to surveys, about 42% of finance procedures can be completely automated. As a result, when RPA in finance is properly deployed, it has the potential to completely alter the finance industry. Furthermore, there are regulations and deadlines that businesses must follow, which RPA can now handle. In this article, we'll look at how RPA can help finance professionals by taking a look at some real use cases from the market.

Use Cases of RPA in the real-world finance market

Following are important use case scenarios of RPA in financial institutions, in the real world. The list is expected to expand as the technologies that make RPA possible evolve. 

Accounting

Accounting is one of the most significant finance activities, and it involves keeping track of accounts receivable and payable. Maintaining a record of outstanding bills and entering data to get paid is a succession of time-consuming chores, and using RPA to automate these operations can be regarded as a win-win situation for everyone engaged in the financial institution. Furthermore, RPA calculates and keeps track of things like Days Sales Outstanding (DSO), which is the time it takes for invoices to be paid. Invoices that are payable are also automatically forwarded to the appropriate person.

Account reconciliation

RPA is used to examine account data to discover if there are any discrepancies between internal ledgers and external documentation.. As a result, RPA makes account reconciliation simple. This process is carried out on a daily, weekly, monthly, quarterly, or yearly basis for all accounts in a financial institution. Whatever sort of reconciliation is performed, it necessitates meticulous attention to detail and data collecting. RPA development integrates bots into software that can notify a financial institution if an account has to be reconciled or if any inconsistencies are discovered.

Security

For financial institutions, preventing money laundering is a significant concern. Financial automation systems can help businesses comply with government regulations by ensuring that customer information is accurate and that consumers follow things like know your customer(KYC) validation. RPA is also usually involved in all steps of security like sending OTPs to customer phones for validation while their accounts are in use. Thus even management of account security can be taken care of by such software. 

Quick account opening 

Before creating accounts, banks and other financial organizations must typically look through and check a lot of facts about their customers, such as their identity, historical credit scores, or compliance with compliance requirements. RPA can be extremely useful in this situation, automating the validation process and resolving any issues that arise. The software then creates a new account for the client and sends the account information to them. If the financial institution is a bank, the customer’s debit & credit card verification & activation is also streamlined similarly using the same process.

Tax calculations

When tax calculations are automated and completed with the help of RPA bots, they decrease inaccuracies while speeding up the process, helping all the accounts in the financial institutions at a smooth pace. In such calculations, digits and figures must be exact to the set decimal places, but RPA is built to manage such strain from the start. Tax rate changes set by external factors like the government can also be handled easily by RPA, with a little help of manual supervision. Whenever supervision is required, the software is designed to alert the employees that work in the financial institution.

Providing better investment options

Despite the risk of unexpected, abrupt changes, RPA is better at tracking investment values. Many financial institutions use RPA to examine an investor's portfolio, lowering the risk associated with investing. RPA tools can also act as financial counsellors without the high costs associated with human competitors. Such software can do things like help consumers make better-investing decisions by providing real-time information on stock market changes, which improves the trust of the client in such financial institutions.

Payroll processing

Payroll processing that is timely and accurate results in a happier workforce, which leads to a satisfied client base and a thriving firm. The initial step in automated payroll processing is to capture employee productivity and attendance, as well as tax regimes based on geographic location. The next step is to complete the onerous processes of timesheet validations, deductions, tax calculations, overtime payouts, and so on. RPA software can successfully manage all of these.

Budget planning & forecasting

Financial institutions that take the help of RPA consultants are able to extract details from numerous reports and systems with precision. This helps the financial institutions to create what are called variance reports, which will provide different perspectives to examine and analyze data. This comparison of trends is established based on historical data and current information, which are proven successful strategies to forecast and plan budgets. This is usually done at set times every year, and can also be done whenever an issue calls for it, like an organization-wide internal policy change.

Generation of reports

Financial organizations like Banks must provide substantial reports that show performance, statistics, and trends using large amounts of data. Manual data extraction in such instances is time-consuming and difficult. RPA in finance makes it easier to collect data from many sources and in various formats. After such data collection, the software can then generate reports in required formats that are then sent to things like government bodies that are in charge of checking them.

Conclusion

As you can see, RPA helps do a lot of tasks smoothly when implemented correctly in a financial institution. To get around workflow bottlenecks, AI-enabled financial software is being utilized all over the world, and anyone who isn't adopting it risks making mistakes in their institution and losing client trust. While there are many such software available in the market, it is better to have your own RPA software for your institution for added security. This is where a Financial Software Development company like Nextbrain can help. We have provided custom software for many financial institutions, and we work flexibly and fast with things like AI-embedded automation in every such software we have delivered to our clients.