Insights from The Lab

Robotic Process Automation (RPA) in Credit Unions

Robotic Process Automation for Credit Unions

One important takeaway from the book The Knowledge Work Factory is that standardization is at the root of all business improvement. Working alongside standardization on the production floor has been robotics and now in the form of RPA, or Robotic Process Automation, it is moving into knowledge work.

One place where Robotic Process Automation is making waves improving knowledge work productivity is credit unions and banks. RPA can be used to automate routine, repeatable tasks done by bankers such as data gathering, data entry, and other low-value tasks. The applications of RPA don’t just stop there though, credit unions can utilize RPA for member onboarding, process reconciliation, underwriting, anti-money laundering, and other integral credit union processes.

What is Robotic Process Automation for Credit Unions?

 Robotic Process Automation, or RPA, can be defined as the implementation of software robots—or bots—to automate mundane, rules-based processes such as account opening or member password resets. These routine and repeatable tasks are currently performed by knowledge workers, also called white-collar workers, which take up time that could be better spent on more involved tasks.

Below is a real life example of a RPA bot implemented by The Lab Consulting for a bank:

In theory, RPA can automate entire processes, but most credit unions use RPA to bridge the gaps between legacy core systems and data, email, or word-processing applications. Think of RPA as a macro that can easily and seamlessly switch between apps. It can allow employees who don’t understand computer coding to connect dissimilar applications without the assistance of trained IT professionals.

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Although its roots are in data extraction programs like screen and web-scraping tools and workflow automation and management software, RPA is not dependent upon a specific programming language or a particular application. Instead, since RPA runs at the display, or surface level, of the process, credit unions can issue commands, manage workflows, and integrate new applications with drag-and-drop simplicity.

RPA reduces costs and frees employees up spend more time servicing members or perform other value-added tasks.

Attended vs. Unattended RPA

There are two basic categories of RPA bots: attended and unattended. While they both automate and make processes more efficient, they require different amounts of human interaction to function smoothly.

How different are they?

Attended RPA works alongside the user to incorporate automation into a specific directed task and is well-suited to tasks that require human-to-system interaction in real time. The downside is that attended bots are usually constrained to programs running on a single workstation.

For example, if an employee needs to search her in-box for emails with a specific subject and then copy and paste the details from that email into a separate program, she can simply tell the bot to “process this.” The bot would dutifully complete the entire grueling task in an instant.

Attended bots may seem small scale, but Credit unions can use attended bots on a wide scale as well. Since credit union call center and customer support employees must often quickly switch between multiple programs and screens to retrieve information while talking on the phone with members, employees can use attended RPA to retrieve data from any number of applications. Since the bots accomplish these tasks far faster and more efficiently, employees have more time to focus on the member.

Unattended RPA doesn’t require user input or attention. Once the bot is set up to execute, the only time humans need to intervene is to evaluate or change the directed task. The bot begins work on its own and runs 24/7.

Credit unions can use unattended RPA tools to optimize a multitude of manual error-prone and time-intensive tasks. However, unattended RPA is more difficult to implement for complex applications. Many credit unions use a combination of attended and unattended RPA tools. In the future, it’s likely that unattended RPA will become the norm as the technology grows and improves.

Benefits of Robotic Process Automation for Credit Unions

By allowing banks & credit unions to automate high-volume and highly repetitive tasks, RPA provides tellers and back office employees with more time to work on more value-added activities.

Here are a few of the benefits of RPA:

  • Increases accuracy and reduces errors. Since RPA automates data entry, it eliminates human transcription errors. For example, an employee only has to enter the member address once when setting up a new account and RPA automatically populates the address in other systems, saving keystrokes, time, and potential errors.
  • Quick installation and configuration. Implementing RPA for low-complexity processes can take less than four weeks.
  • Higher productivity. Knowledge workers can spend up to 50% of their workday simply moving and reconciling data. RPA can reduce these data-movement tasks up to 80%, increasing transaction processing and freeing credit union employees for higher-value-added work.
  • Improves regulatory compliance adherence. RPA follows exact commands and specifications and provides an auditable and recordable history of every step of the process. This allows for easier troubleshooting in case of an error.
  • Improves employee morale. Repetitive, manual work is boring and drives down morale. Offloading these repetitive, boring tasks makes employees happier and allows them to do more valuable work, making them feel more empowered.
  • Works with existing IT infrastructure and applications. Unlike traditional back-end automation, RPA works as a front-end layer across existing systems and applications.
  •  Reduces processing costs. Attended RPA can cut processing costs by up to 40%. Unattended RPA can reduce costs by up to 80%. Although, remember to consider the differences between the two – unattended RPA may be more complex to implement over attended RPA.
  • Improves system data quality. More accurate data input increases the value of big-data investments. It also supports future predictive analytics capabilities from richer data. Stated simply, bad data in is bad data out; RPA can reduce bad data.
  • Improves the member experience. RPA can increase member satisfaction with faster turnaround times. Employees can spend more time interfacing with members, increasing member satisfaction scores among peer banks & credit unions.
  • Requires a low-level of technical skills. There’s no need to master a complex coding language to control software bots. Instead, employees use symbols and drop-down menus to create bots. After just a few weeks of training, employees can administer bots themselves without the need of heavy oversight.

Implementing Robotic Process Automation in Credit Unions

 You might now be tempted to automate every single process, but just because you can implement RPA on a process, doesn’t mean you should. The processes best suited for RPA are human-resource intensive, repetitive, standardized, and prone to human error. Processes that don’t add significant value to the member or to the credit union are also good candidates for RPA.

Here’s a three-step process for successfully implementing RPA.

Step 1: Select the Right Processes to Automate

Determine what processes are core to your credit union, what processes are secondary, and what processes are redundant. Eliminate the redundant processes and focus on core processes that require employees to move a lot of repetitive information around  such as:

  • Back office reporting
  • Loan underwriting
  • Document and records management
  • Customer relationship management

To maximize ROI, focus on processes performed by the largest number of employees.

A high number of errors or departments that struggle to meet volume or productivity goals are another indictor. Look at the data-related error rates of each department and determine if those errors involve manual data movement. These processes are prime candidates for RPA.

Step 2: Identify Individual RPA Use Cases

Never buy RPA software without first identifying the use cases that you want to implement. RPA software is expensive with year-long licenses. Some consulting firms attempt to sell as many licenses as possible–or do a million-dollar analysis project–before even looking for use cases.

Take the opposite approach and find your RPA use cases first. This is not only the more cost-effective tactic, but it also allows you to purchase only the “a la carte” bots you need.

To find the right use cases, ask employees questions such as:

  • What work do you do that you copy and paste data from one place to another frequently?
  • Do you send the same types of emails over and over throughout the day?
  • Do you repeatedly move documents or files from email to a folder or system?

Start small, successfully implement several use cases, scale up, and repeat. To build employee support, only implement a few quick-hit RPA use cases over a few weeks. Get it right, and employees will be asking for many more bots.

Step 3: Calculate the ROI of Each RPA Use Case and Build a Business Case

Identify the cost savings of implementing RPA. Don’t limit yourself to only how RPA can reduce your overhead. Instead, identify ways that RPA can impact downstream operations in other areas of your business.

To calculate the cost benefits of each RPA use case, use the following formula:

(Total number of hours per week an employee works on a process)

Minus

(Time saved by the RPA use case)

Multiplied by

(Fully loaded employee salary with benefits minus RPA software cost for one year)

=

Total savings from the individual RPA use case

Present the cost savings to your leadership team, IT team, and other stakeholders and work together to identify how to implement RPA now and map out how you plan to increase the use of bots in the next 6 to 12 months as the momentum for RPA builds in the organization.

Final Thoughts

 With robotic process automation, credit unions can automate high-volume routine and repeatable tasks. RPA tools are easy to implement and because they work as a front-end layer across existing systems and applications, the ROI is quick. RPA bots boost employee productivity and morale, reduce errors, and free employees up to focus on the member experience, leading to happier customers and higher profits.

Contact us to speed up your RPA analysis for your credit union or bank, we can develop use cases and help you successfully implement Robotic Process Automation from start to finish.

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