RPA for Compliance and Risk Management in the UK Financial Sector

The UK banking and financial services sector is in dire need of maturing its compliance and risk management. A recent Nasdaq report highlights that UK banks suffered a loss of $30.5B due to fraud and scams. Cyberattacks have become rampant due to the inefficient process of payment rails tracking.

The UK banking and financial organizations need to address several challenges, including safeguarding data security, financial crimes such as anti-money laundering, mortgage fraud, authorized push payment (APP) fraud, and ensuring compliance with regulations. Maintaining a strong compliance and risk management system is critical for the organizations to gain customer trust and confidence and avoid legal and regulatory penalties—and reputation compromise.

A major problem is that the majority of UK banks and financial organizations still employ manual processing for payment operations. It inevitably raises the risk of error-prone data, delayed transaction processing, incurred operational expenses, and so on.

However, with the adoption and integration of RPA in UK finance, banks and organizations can effectively address persisting business challenges and improve compliance and risk management.

Smart Robotic Process Automation (RPA) can empower organizations to track transaction records, validate compliance activities, and provide real-time audit logs with minimal errors.

RPA in UK finance helps organizations achieve compliance with rule-based and routine task automation. This not only mitigates human errors but also empowers teams to concentrate on complex financial activities and customer needs. UK banks and financial organizations can automate and streamline multiple tasks, including:

• Systematic Document Verification: RPA bots empower banks and financial organizations to gather, process, and archive documented data. It simplifies regulatory filings and audits. It ensures timely submission of regulations to the PRA (Prudential Regulation Authority) and FCA (Financial Conduct Authority). For instance, RPA collects data from multiple sources for AML and KYC processes, ensuring data accuracy and consistency. It further cross-checks data to confirm that FCA has updated information and maintains data consistency to keep FCA updated and limit potentially fraudulent activities. RPA in UK finance monitors ongoing transactions and patterns. This helps in assessing possible operational vulnerabilities and risks that can lead to risk management oversight.
• Verifying AML and KYC: RPA bots help banks and financial organizations to gather, process, and archive documented information. It simplifies regulatory filings and audits, ensuring timely submission of regulations to the PRA (Prudential Regulation Authority) and FCA (Financial Conduct Authority). RPA, for example, can easily collect data from different sources to complete AML and KYC processes on time. Additionally, it cross-checks data to confirm that FCA has updated information and limit potentially fraudulent activities. RPA in UK finance helps in proactive monitoring of ongoing transactions and patterns. This helps in assessing possible operational vulnerabilities and risks that can lead to risk management oversight.
• Real-Time Monitoring and Operational Visibility: RPA in UK finance enables banks and insurers to quickly identify unusual or suspicious transactional activities and share them with the compliance teams for further review. This reduces the overall audit duration and allows the teams to take prompt action to prevent compliance violations. It is important for banks and insurers to check loan application status on time. However, its manual processing can take months, whereas RPA automation can finish the same tasks within weeks or days. Evoke, for instance, helped a major bank resolve customer dispute with dispute reconciliation automation for credit claims. Evoke’s end-to-end RPA automation reduced manual effort by 90% and accelerated processing by 75% with 99.8% verification accuracy. It also helped the company improve its operational visibility with real-time data and activity monitoring.

Considering the correlation between risk management and compliance, banks and insurers need to implement an efficient risk management process to ensure compliance. RPA in UK finance can significantly help in addressing the challenge.

Organizations in UK finance can utilize RPA to expedite policy assessment and ensure timely completion of claims processing. It also accelerates the process of data extraction and validation, routing the claims either for expert review or for automated approval based on the task complexity. Evoke, for example, helped a leading financial company to streamline its claims process for loss mitigation with RPA. Additionally, check the case study where Evoke’s team of in-house RPA experts provided a smart bot that enabled quick document download and data read and thereafter validated the quality of claims applications. It automated 60+ manual steps, improving turnaround time by 80%.

Fraud Control and Management: A recent study by Lloyds Banking Group asserts that fraud is one of the most typical crimes in the UK. It cost banks and insurers more than £11B last year. This has weakened people’s trust in digital platforms and online financial services.

Incorporating RPA for fraud detection in UK financial services can effectively help in controlling fraud. Lloyds Banking Group, for example, implements RPA in UK finance. The company uses RPA solutions in their Fraud and Dispute (D&F) sector to effectively address 95% of fraud events without human intervention. RPA can monitor transactions in real-time, track transaction logs, and flag a suspicious transaction in case it does not fall within the usual rule-based task logic. This helps in strengthening the AML regulations, necessary to counter financial crimes such as corruption and tax evasion.

Assets and License Conditions Breaches: Some UK banks and insurers risk non-compliance due to improper asset management and license conditions breaches. It includes activities such as unauthorized transactions from frozen assets, license use past its expiry, and so on. Adopting risk management automation can be helpful in countering compliance breaches and supervising asset management. For example, RPA can help you scrutinize unusual asset use, licensing agreements, and their regulations. This helps audit and regulatory teams identify potential threats and enhance audit trail processes with automated data logging and recording, maintaining data consistency.

Operational Resilience:

RPA in UK finance helps companies to drastically reduce human errors, operational downtime, and delayed processing. This, in turn, helps companies to improve its operational resilience, adhering to compliance.

Banks and insurers embracing RPA in UK finance can deliver customer services with confidence. They can leverage RPA to accelerate rule-based tasks while they actively work on more complex tasks, such as managing high-stake fraudulent activities and claims processing, among others. However, ensuring proper adoption and use of RPA in UK finance is pivotal for compliance assurance. For its successful implementation, a proper roadmap, an understanding of potential automation processes, and a farsighted vision of business goals are essential. Working with a reliable partner such as Evoke Technologies can be helpful in this regard.

Evoke’s RPA professionals provide a customized roadmap and deliver smart RPA solutions that cater to your specific business and customer needs.

Connect with us to know how.

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