By Ray Birch
ORLANDO—Robotic process automation (RPA) is being credited with helping some financial institutions grow without having to add more staff and is increasing accuracy of work performed, according to some experts.
Richard Milam, CEO of EnableSoft, whose company offers an RPA solution, said he’s seen some banks and credit unions use RPA and triple in size without adding markedly to their teams.
“We’ve see cases where financial institutions have grown three-fold and held their operations staff consistent,” said Milam. “They are also eliminating a lot of errors that cost them time and money.”
RPA is an emerging form of business process automation technology based on the notion of software robots, or “artificial intelligence workers.” In traditional workflow automation tools, a software developer produces a list of actions to automate a task and interface to the back-end system using internal application programming interfaces (APIs) or dedicated scripting language. In contrast, RPA systems develop the action list by watching the user perform that task in the application's graphical user interface (GUI), and then performs the automation by repeating those tasks directly in the GUI.
Market Growing Quickly
RPA software is expected to grow from a $629-million market in 2018 to $1.2-billion by 2021, with one new survey showing more than one-third of surveyed financial institutions attribute a 2%-5% revenue growth directly to an intelligent automation strategy that includes RPA.
Milam said credit unions are finding uses for RPA that include issuing new credit cards quickly as needs arise, data breach notification and ensuing actions, and data migration resulting from a merger.
But the key, Milam said, is RPA doesn’t exist to drive efficiencies for the sake of efficiency, Instead, what it does is free workers to be more effective and focus on the things that expand the business.
Richard Milam
“In the example of using RPA to issue credit cards, the front line staff no longer go through several time-consuming steps if a member stops by and says they need a new card,” he explained. “They just hit a key and the process gets moving and is completed. Instead of the member watching the MSR work, now that representative can talk to the member about how the credit union can meet some of their other needs.”
How RPA is Being Used
Milam said credit unions are also using RPA to automate manual processes in the backroom, such as to interface systems that previously did not talk to each other.
“Like loan and deposit systems,” he said. “In some cases RPA is enabling deployment of new products, like small-dollar loan offerings. In other cases credit unions are using the solution when they are doing data migration when they sell or buy a loan portfolio or merge in another CU.”
That was the case at $713-million Vibrant Credit Union in Moline, Ill., which has been using EnableSoft’s Foxtrot for more than one year. Vibrant primarily turned to RPA to handle data migration as it has been aggressively growing via mergers, the CU said. Cost for Foxtrot involves a “low five figures” annual fee for a handful of robots, which includes training, said Milam.
Erik Ristow, chief technology officer at Vibrant, said estimated ROI for the first six months of using RPA was between 433% and 900%. He said in one month, VCU saved between $80,000 and $150,000.
“We have completed five mergers in about a year’s time,” said Ristow.
Eliminating Vendor Charges
He explained Vibrant had been paying its core system provider to do the data migration for some of the five mergers, then decided to go on its own using RPA.
“The big mergers were really expensive to pay our provider to migrate the data,” said Ristow, citing charges of $175-$200 an hour. “But what I also like about using RPA is that we do the data migration on our own time, when we want to do it. So, it saves you money and allows you to do the merger on your own schedule, not your core provider’s. Merger opportunities can come up quickly, and if you have to wait on your provider, which sometimes can have a long waiting list, that could impact the deal.”
Ristow said Vibrant has assembled a small bank of computers in its server room dedicated to RPA.
“They work in the background day and night, and things really move along,” he said. “Sometimes it can take four or five days to get the process down before you get started. But it works great.”
Ristow said Vibrant plans to expand its use of RPA, and next on the list will likely be processing new member leads.
“Leads come in from many sources and we have one person spending four to five hours a day on this, following up on leads,” Ristow explained. “We can save that time and be more efficient in our follow up with RPA.”
What RPA is NOT About
Milam added that RPA is not about eliminating staff.
“We see it more as changing what staff do to make them more effective, doing things that really drive the business,” he said. “Now jobs may change as a result of API, and there could be loss through attrition. But what I see going forward is you won’t have a bunch of clerks running around doing data entry.”