Robotics Process Automation (RPA) – A Transformation lever for Risk & Compliance Management (2023)


Robotics Process Automation or RPA is one of the digital levers that is fast becoming a tool of choice for many banks to automate processes that are standardized, low on exception, and highly manual intensive. Along with the standard benefits that an RPA implementation brings in, it also helps banks achieve compliance and attain a greater degree of control over end user computing (EUC) processes. The adoption of RPA technologies is gradually gaining momentum with investments pegged to touch nearly USD 1 billion by the end of 2019 with the banking and financial services sector accounting for approximately 40%. Furthermore, approximately 10 to 15% of these spends is expected to be taken up by the risk and compliance area.

The risk and compliance function is constantly grappling to contain compliance costs, gain better control of processes, maintain the required operational agility to achieve compliance, and improve system efficiency. The efficiency issues arise mainly due to the presence of legacy systems, the need to collate data from multiple lines of business (LoBs), and error-prone manual processes. In such a scenario, RPA comes across as a powerful solution that can help banks to

  • Improve efficiency without tinkering with the existing Legacy systems
  • Provide required agility to scale as per compliance needs
  • Maintain better control on processes through required auditability
  • Automate manual intensive efforts and reduce errors.

RPA adoption levels in Banks

In the banking and financial services industry, especially in the risk and compliance area, the adoption of RPA is still at a nascent stage. Currently most of the investments are being made in running proofs of concept (POCs) to assess the value or the return on investment RPA implementations bring to the table. Like any technology, RPA adoption can occur in many forms (see Figure 1)

Robotics Process Automation (RPA) – A Transformation lever for Risk & Compliance Management (1)

(Video) RPA In 5 Minutes | What Is RPA - Robotic Process Automation? | RPA Explained | Simplilearn

Figure 1 – RPA Adoption in Banks

Initially banks looked at RPA for short term and tactical gains. However, with RPA technology and the concept gaining maturity, more and more possibilities of leveraging RPA for strategic needs are being explored; examples include judgment based tasks and intelligent rule-based automations. Banks have also started looking to integrate RPA with other digital investments in the areas of Machine Learning (ML), Natural Language Processing (NLP), Chabot’s etc. and are gradually progressing towards the desired state of Cognitive RPA.

RPA as a Transformational Lever

Initially RPA solutions were considered tactical fixes. However, as the digital portfolio continues to evolve, RPA is slowly evolving into a transformational lever that combines with cognitive technologies like ML to carry out strategic tasks without impacting the existing IT landscape. This change in outlook can also be observed in the risk and compliance areas where adoption is gradually moving from simple risk tasks to complex judgement based tasks that involve review and decisioning. Also, banks are investing in RPA at an enterprise level, rather than opting for specific point solutions. These changes clearly indicate that RPA is becoming more and more strategic in nature and banks are undertaking RPA investments to improve efficiencies and save compliance costs.

RPA adoption in Risk and Compliance

In the risk and compliance area, RPA adoption is still in an early stage. Currently, most of the adoption is happening in areas such as KYC onboarding and generation of risk and regulatory reports where the activities are standardized and involve data collation, data aggregation, email integration, and simple rule-based automation to quote a few.

As the concept gains maturity, adoption is spreading to areas like AML alert investigation, credit reviews, risk reconciliation, and generation of high-volume, high-frequency risk reports such as daily LCR reporting. These processes typically involve complex business rules, processing of unstructured data, macros etc.

(Video) Understanding RPA (Robotic Process Automation)

Robotics Process Automation (RPA) – A Transformation lever for Risk & Compliance Management (2)

Figure 2 – Key Risk and Compliance RPA use cases

The banking industry is currently envisioning a target state where RPA can combine with cognitive technologies such as ML, NLP etc. Many banks have started focusing on this and are in the process of identifying use cases that are a good fit. In risk and compliance, judgement based use cases such as limit breach management, risk data quality management etc., are typically good candidates for Cognitive RPA. Though many banks are keen to leverage Cognitive RPA capabilities, they are also cognizant of the fact that it is not desirable to automate judgement based tasks completely in the risk and compliance area due to the nature of the function. Even though some banks are leveraging ML components for risk assessment and decisioning, the output from such cognitive RPA solutions are aimed at improving the turnaround time for Risk processes and providing suggestive recommendations to the risk analysts. The final authority of decisioning is still resident within the risk function of the Bank.

Enterprise Level Platform based approach for RPA adoption

Banks too have started perceiving RPA adoption as transformational initiatives rather than point solutions. Initially when banks started experimenting with RPA solutions, their approach was operational in nature, siloed with very low focus on reusability aspects. With the RPA concept evolving, it is receiving a major boost with more and more banks adopting RPA at an enterprise level. Banks are now forming dedicated RPA Centers of Excellence (CoEs) to manage RPA programs at an enterprise level. The core function of the CoE is to

  • Establish standards for identifying and assessing RPA use cases
  • Develop and Execute use cases across Lines of Business (LoB’s)
  • Deploy and manage RPA installations
  • Capture and manage reusability aspects that can be leveraged across RPA use cases for different LoBs

Robotics Process Automation (RPA) – A Transformation lever for Risk & Compliance Management (3)

Figure 3 – Typical RPA Adoption Framework

(Video) Robotics Process Automation (RPA): A primer for internal audit professionals

Focusing on reusability

Reusability in RPA is another concept that is fast gathering steam; reusability means capturing and managing aspects from a RPA implementation and then leveraging the same in some capacity for subsequent RPA implementations, which eventually reduces development effort. Many banks have started thinking along these lines and are working towards establishing a framework that enables identification of the reusability aspects of RPA implementations. Many third-party RPA tools also provide a library space where the reusability aspects can be captured and leveraged for subsequent implementations.

Challenges in RPA adoption

No Change comes without its share of challenges, even in case of RPA adoption the Banks are facing the following key challenges

  • Regulatory uncertainty over the use of RPA solutions. No formal or defined requirements from regulators on the use of RPA technology for automation has resulted in banks taking a cautious approach to adoption.
  • Unstable business processes – many banks have manual processes that are not very well documented or stable which makes it difficult for them to adopt RPA solutions.
  • Most of the initial RPA adoption has been in silos and banks are still in the process of putting in place an enterprise-wide RPA adoption strategy and governance framework.
  • RPA technologies are fast-changing as they are still evolving

The Road ahead

(Video) Digital Transformation And The Role of Robotic Process Automation (RPA)

As RPA technologies become more and more mature, they will open up many complex problem statements in risk and compliance for RPA adoption. The future of the RPA market looks promising as the key aspects that make RPA preferable are that it does not interfere with the existing IT investments and provides quick and efficient solutions to business users, which makes it attractive for both business and technology stakeholders.

About the Author

Robotics Process Automation (RPA) – A Transformation lever for Risk & Compliance Management (4)

Ajay Katara

Ajay Katara is a Domain Consultant with the Risk Management practice of the Banking and Financial Services (BFS) business unit at Tata Consultancy Services (TCS). He currently leads the BFS Risk Practice’s portfolio on Regulations and Robotics Process Automation. He has extensive experience of more than 13 years in Consulting & Solution design space cutting across CCAR Consulting, AML, Basel II implementation and credit risk, and has worked with several financial enterprises across geographies. He has significantly contributed to the conceptualization of strategic offerings in the risk management space and has been instrumental in successfully driving various consulting engagements. He has also authored many editorials, details of which can be found in his linked in profile (

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(Video) Robotic Process Automation Risk and Chanllenges - Summer 2020 Prof. Vasarhelyi


How does RPA help risk management? ›

It helps businesses ensure that any workflows, financial checks, balances, and processes meet all necessary obligations. RPA can embolden risk management processes with compatibility, optimized workflows, and a much shorter turnaround time.

What is the main purpose of RPA? ›

Robotic process automation streamlines workflows, which makes organizations more profitable, flexible, and responsive. It also increases employee satisfaction, engagement, and productivity by removing mundane tasks from their workdays.

How do I get RPA certification? ›

How to earn RPA certification
  1. Decide which certification is right for you. The first step in getting your RPA certification is deciding which one is the best choice for you. ...
  2. Take an exam preparation course. ...
  3. Prepare for the exam. ...
  4. Take the RPA certification exam.
Feb 3, 2023

Which of the following tasks are not possible by RPA? ›

RPA tools cannot read any records that are non electronic or with unstructured inputs. RPA tools can remove rule based monotonous tasks but cannot replace tasks that require judgements.

What are three benefits of RPA? ›

Let us take a snapshot of some of the advantages of robotic process automation.
  • Cost-Effective. ...
  • Accuracy & Quality. ...
  • Consistency. ...
  • Improved Analytics. ...
  • Increased Employee Productivity. ...
  • Increased Customer Satisfaction. ...
  • Faster. ...
  • Reconciliation from Multiple Systems.

What is RPA in risk? ›

The risk protection arrangement (RPA) for schools.

What are the three most important characteristics of RPA? ›

The common characteristics of RPA systems include cognitive intelligence and AI. To assist bots in making better decisions over time, they may use cognitive automation, machine learning, and computer vision.

What is RPA and its benefits? ›

RPA not only improves efficiency and accuracy in business processes, but also spares human workers from needing to spend their time on dull and repetitive tasks. This frees them up to focus on work that requires human judgement and empathy.

What are the three types of RPA? ›

There are 3 main types of robotic process automation: attended automation, unattended automation, and hybrid RPA.

Can I learn RPA without coding? ›

You can become an RPA expert without being a programmer, even if you don't have any coding skills. You'll need some knowledge of programming languages, but there are more straightforward tools that anyone may learn to use. The demand for RPA developers is growing, with large companies investing more in this field.

Is it hard to learn RPA? ›

RPA system is very easy to use and implement because it focuses on providing help to end-users to navigate. It also makes the employees realize which work is to be done more conveniently and quickly.

How fast can I learn RPA? ›

Yes, the RPA introductory concepts are explained very clearly in this program, and you can complete the program within 90 days.

What are risk and challenges with RPA? ›

Lack of business and IT alignment. Lack of ownership and poorly defined responsibilities. Selecting the wrong business case. Absence of a clear RPA strategy.

Which tools comes under RPA? ›

RPA Tools/Vendors are the software through which you can configure tasks to get automated. In today's market, there are RPA Vendors such as Blue Prism, Automation Anywhere, UiPath, WorkFusion, Pega Systems and many more. But, the leaders in the market are the trio (UiPath, Blue Prism & Automation Anywhere).

How do you solve the RPA challenge? ›

Solved RPA Challenge Using Uipath | Interview Guide
  1. Keep it Clean.
  2. Think about reusability concept/Smaller components workflow.
  3. Useful comments with details what workflow is doing etc.
  4. No Hardcoded Values & Naming Conventions.
  5. Meaningful names of Workflow.
  6. Initialisation & Clean-up Activity.

What are the four important phases of RPA? ›

The RPA life cycle consists of five stages: planning, development, testing, deployment, and maintenance.

What are disadvantages of RPA? ›

One of the prominent disadvantages of RPA is Added complexity. However, RPA makes it easy for businesses to change business processes. It makes it easier for them to make changes step-by-step rather than systematically updating the software. If something goes wrong, RPA makes it difficult to fix the problem.

Which RPA tool is best? ›

10 Best RPA Tools (June 2023)
  • UiPath. ...
  • Blue Prism. ...
  • Automation Anywhere. ...
  • WorkFusion. ...
  • Inflectra Rapise. ...
  • Power Automate. ...
  • Kofax RPA. ...
  • NICE Robotic Process Automation.
Jun 1, 2023

Which are key components of an RPA strategy? ›

The 5 essential elements of an RPA strategy
  • Target processes for RPA strategically. ...
  • Build a business and IT partnership. ...
  • Institute an RPA champion and center of excellence. ...
  • Govern RPA. ...
  • Invest in RPA monitoring tools.
Apr 27, 2020

How does RPA improve compliance? ›

How does RPA help in Compliance? Automation enables businesses from diverse industries to achieve world-class compliance. Once a robot has learned a business procedure, it will repeat it in the same way, every time, with 100 per cent accuracy, allowing businesses to maintain high levels of compliance across the board.

What is RPA in workplace? ›

RPA is ultimately about automating some of the most mundane and repetitive computer-based tasks and processes in the workplace. Think copy-paste tasks and moving files from one location to another, for example.

What are the two types of RPA? ›

In RPA processes, there are two types of bots: attended and unattended.

What is RPA its advantages and disadvantages? ›

RPA does not require a special kind of knowledge, such as coding, programming, or deep IT skills. RPA software is user-friendly, easy to understand, and easy to use. RPA tools allow users to create bots quickly and effortlessly by capturing mouse clicks and keystrokes with a built-in screen recorder component.

What RPA can and Cannot do? ›

RPA is essentially just a robot, akin to the robot arms used in factories on assembly lines. These bots can only perform specific tasks precisely as they're programmed to do. RPA cannot learn - it can only follow instructions or mimic a human performing a task.

What are the risks of automation? ›

Other disadvantages of automated equipment include the high capital expenditure required to invest in automation (an automated system can cost millions of dollars to design, fabricate, and install), a higher level of maintenance needed than with a manually operated machine, and a generally lower degree of flexibility ...

How AI can help in risk management? ›

In risk management, AI/ML has become synonymous with improving efficiency and productivity while reducing costs. This has been possible due to the technologies' ability to handle and analyze large volumes of unstructured data at faster speeds with considerably lower degrees of human intervention.

What does RPA enables ____________________ reduces delivery risk? ›

The robots used in RPA are generally referred to as 'bots' When implemented by enterprises, RPA allows simple integration of activities and software, reducing costs and increasing speed and accuracy of execution, thereby lowering the risk of delivery.

What is the key risk in the implementation of simple or non intrusive RPA? ›

The key risk in the implementation of simple or nonintrusive RPA to get started is security. Although simple or nonintrusive RPA can be implemented without significant disruption to existing systems and processes, it can still pose a security risk if not implemented correctly.

What are the benefits of RPA in audit? ›

Robotics in the audit

RPA is the simplest form of digital labour. Its significance is that it enables data to be collected, analysed or calculated at a speed and scale far greater than a human or team of humans could manage.


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