Tag: Corporate Banking

Verification and Valuation of investments are critical components of the audit process, ensuring that a company’s financial statements accurately reflect the value of its investment portfolio. Investments can take various forms, including equity securities, debt securities, and other financial instruments.

The verification and valuation of investments involve a combination of verification procedures to confirm ownership and existence and valuation procedures to ensure accurate measurement of fair value. Auditors play a crucial role in providing assurance that the values reported in the financial statements are reliable and in compliance with accounting standards. The choice of valuation method depends on the nature of the investments and the specific circumstances surrounding each investment.

Verification of Investments:

• Existence and Ownership:

Auditors confirm the existence and ownership of investments by reviewing supporting documents such as trade confirmations, broker statements, and custody agreements.

• Custodian Confirmation:

Auditors may obtain direct confirmations from custodians or third-party institutions holding the investments to verify the company’s ownership and the quantity of investments held.

• Physical Inspection:

For certain physical certificates or non-traditional investments, auditors may physically inspect and verify the existence of the documents.

• Agreement Review:

Agreements related to investments, such as investment management agreements or subscription agreements, are reviewed to ensure compliance with terms and conditions.

• Legal Confirmation:

Legal confirmation of ownership may be sought through legal opinions or correspondence with legal representatives to confirm the validity of ownership.

• Valuation Method Confirmation:

The auditor confirms that the company is using appropriate valuation methods for different types of investments in accordance with accounting standards.

Valuation of Investments:

• Fair Value Assessment:

Investments are often valued at fair value. Auditors assess the appropriateness of the fair value measurement, considering market conditions, pricing models, and assumptions used in the valuation.

• Market Comparisons:

For publicly traded securities, auditors may use market prices as a basis for valuation. They compare the book value of investments to market values, considering any market fluctuations.

• Discounted Cash Flow (DCF) Analysis:

For certain investments, particularly those without quoted market prices, auditors may use discounted cash flow analysis to estimate fair value based on future cash flows.

• Engagement of Specialists:

If investments are complex or require specialized knowledge, auditors may engage valuation specialists to provide independent assessments of fair value.

• Impairment Testing:

Auditors assess whether there are indications of impairment for investments. If indications exist, impairment testing is performed to determine if the carrying amount exceeds the recoverable amount.

• Review of Corporate Actions:

Auditors review corporate actions, such as stock splits, mergers, or acquisitions, to ensure that these events are appropriately reflected in the valuation of investments.

Other Considerations:

• Disclosures:

The auditor reviews disclosures related to investments in the financial statements, ensuring compliance with applicable accounting standards. Disclosures may include details about the nature of investments, fair value measurements, and risks associated with specific investments.

• Subsequent Events:

Any significant events occurring after the balance sheet date but before the financial statements are issued are considered to ensure that the values of investments are still accurate.

• Management Representations:

Auditors obtain representations from management regarding the ownership, existence, and valuation of investments. Management may be required to confirm their intentions regarding the holding or disposal of certain investments.

• Review of Internal Controls:

Auditors assess the effectiveness of internal controls related to the custody and valuation of investments. This includes controls over authorization, recording, and reconciliation processes.

• Capitalization of Costs:

Auditors review whether any costs related to the acquisition of investments are appropriately capitalized and whether there is evidence of impairment if the fair value is below the carrying amount.

Investment criteria are the standards or principles used to evaluate the attractiveness of investment opportunities. The choice of investment criteria is important because it determines how investments are evaluated and selected. The choice of technique for evaluating investments depends on the investment criteria and the nature of the investment.

Here are some commonly used investment criteria:

1. Return on Investment (ROI): ROI measures the profitability of an investment by dividing the net income by the investment amount. It is a commonly used criterion for evaluating investments, particularly in the private sector.
2. Net Present Value (NPV): NPV measures the present value of the expected cash flows from an investment, minus the initial investment. It is a popular criterion for evaluating long-term investments and takes into account the time value of money.
3. Internal Rate of Return (IRR): IRR is the discount rate that makes the net present value of the investment equal to zero. It is another commonly used criterion for evaluating investments and is often used to compare different investment opportunities.
4. Payback Period: Payback period is the length of time it takes to recover the initial investment. It is a popular criterion for evaluating short-term investments and is often used in combination with other criteria.
5. Profitability Index (PI): PI is the ratio of the present value of the expected cash flows to the initial investment. It is a measure of the value created per unit of investment and is commonly used in evaluating capital projects.

The choice of investment technique depends on the investment criteria and the nature of the investment. For example, if the investment criteria include maximizing ROI, then the ROI technique may be the most appropriate. If the investment criteria include considering the time value of money, then the NPV or IRR techniques may be more appropriate.

Savings

Saving is setting aside some money for future expenses or needs. It is the first and foremost step towards leading a financially disciplined life. The savings fund comes as a boon during rainy days. A savings account or bank fixed deposits are some of the popular savings options in India. It is similar to holding cash. Our parents and grandparents have strongly believed in saving money for their children’s future to give them a comfortable life. That’s what kept them going and never touched their savings until and unless it was extremely necessary. While now most of us love to spend the money we earn and follow the ‘YOLO’ trend. Yes, You Only Live Once (YOLO). However, living without any financial hiccups should be the goal.

Objectives of Saving

• A rainy day fund for emergencies
• A down payment for a car or a home
• Putting money aside for a trip, new appliances, or a car
• Short-term educational expenses
• Utilizing alternatives for Tax-Free Savings Accounts

The pros and cons of saving

There are plenty of reasons you should save your hard-earned money. For one, it’s usually your safest bet, and it’s the best way to avoid losing any cash along the way. It’s also easy to do, and you can access the funds quickly when you need them.

All in all, saving comes with these benefits:

• Savings accounts tell you upfront how much interest you’ll earn on your balance.
• The Federal Deposit Insurance Corporation guarantees bank accounts up to Rs. 5,00,000, so while the returns are lower, you’re not going to lose any money when using a savings account.
• Bank products are generally very liquid, meaning you can get your money as soon as you need it, though you may incur a penalty if you want to access a CD before its maturity date.
• There are minimal fees. Maintenance fees or Regulation D violation fees (when more than six transactions are made out of a savings account in a month) are the only way a savings account at an FDIC-insured bank can lose value.
• Saving is generally straightforward and easy to do. There usually isn’t any upfront cost or learning curve.

Despite its perks, saving does have some drawbacks, including:

• Returns are low, meaning you could earn more by investing (but there’s no guarantee you will.)
• Because returns are low, you may lose purchasing power over time, as inflation eats away at your money.

Investing

Investing money is the process of using your money to buy assets that value over time and provide high returns in exchange for taking on more risk. Investments are typically volatile and illiquid. You earn returns by selling your assets for a profit or realising your capital gains.

Objectives of Investment

• Paying for your children’s higher education
• Building wealth for the future
• Saving for retirement

The pros and cons of investing

Saving is definitely safer than investing, though it will likely not result in the most wealth accumulated over the long run.

Here are just a few of the benefits that investing your cash comes with:

• Investing products such as stocks can have much higher returns than savings accounts and CDs. Over time, the Standard & Poor’s 500 stock index (S&P 500), has returned about 10 percent annually, though the return can fluctuate greatly in any given year.
• Investing products are generally very liquid. Stocks, bonds and ETFs can easily be converted into cash on almost any weekday.
• If you own a broadly diversified collection of stocks, then you’re likely to easily beat inflation over long periods of time and increase your purchasing power. Currently, the target inflation rate that the Federal Reserve uses is 2 percent, but it’s been much higher over the past year. If your return is below the inflation rate, you’re losing purchasing power over time.

While there’s the potential for higher returns, investing has quite a few drawbacks, including:

• Returns are not guaranteed, and there’s a good chance you will lose money at least in the short term as the value of your assets fluctuates.
• Depending on when you sell and the health of the overall economy, you may not get back what you initially invested.
• You’ll want to let your money stay in an investment account for at least five years, so that you can hopefully ride out any short-term downdrafts. In general, you’ll want to hold your investments as long as possible and that means not accessing them.
• Because investing can be complex, you’ll probably need some expert help doing it unless you have the time and skillset to teach yourself how.
• Fees can be higher in brokerage accounts. You may have to pay to trade a stock or fund, though many brokers offer free trades these days. And you may need to pay an expert to manage your money.

Over the past three decades, India has experienced immense change in just about every aspect of life. GDP per capita has soared, literacy is up, life expectancy is higher than ever, and the country’s digital economy is booming.

It is expected that consumer spending will double by 2025 and eCommerce penetration will increase by a factor of five, creating an ideal environment for exponential growth. Reports show FinTech Investments in India almost doubled to US$3.7 billion in 2019, up from US$1.9 billion the previous year. This pegs the country as the world’s third largest FinTech hub, behind the US and the UK.

Accessing the growth opportunity that India represents requires deep understanding of a diverse, dynamic economy and a culture that is both ancient and cutting-edge, as well as the latest regulatory and payments environment.

The Government of India launched the National Strategy for Artificial Intelligence (NSAI) in 2018. Also, it launched its flagship project, namely Digital India. The objective of these moves was to transform the landscape of digital technology in a way that it could be integrated with businesses.

Following the outbreak of the Covid-19 pandemic, India started advancing towards achieving its digital transformation goals faster. This has been possible due to an improvement in the country’s digital infrastructure amid a series of subsequent lockdowns to curb the pandemic.

Acknowledging the significance of AI and digital technology, many technology and business leaders have embraced them. This trend is likely to gain traction in the coming years.

Whether one thinks of the Internet or digital technology, both have improved speed and connectivity due to innovation. At present, they are indispensable for business organizations as well as consumers. They are likely to remain valuable assets to business organizations in the future.

India’s rapid digital transformation

India’s digital transformation was jumpstarted by ‘Digital India’, a campaign launched by the Indian government in 2015 aimed at ensuring the country’s citizens are connected through high-speed networks and can access a robust digital ecosystem. The economic rationale behind this campaign is clear; research from McKinsey states that digitisation can create 65 million new jobs by 2025 and add US$1 trillion to the economy. This is a very positive indicator for global companies who are looking to build digital businesses in India.

Digital payments and FinTech are now a big part of life for many of the country’s 1.35 billion people, with 52% of the country adopting some form of FinTech. 99% of the adult population is part of the Aadhaar digital identity system and 60% of that population is under the age of 40. With an estimated 750 million smartphone users you can see how far India has travelled in its rapid digital transformation, providing a strong environment for many digital businesses.

Despite these impressive numbers, digital payments can still increase on a massive scale as a large part of the population has not fully adopted digital payments yet. If you look at eCommerce, it accounted for 3% of consumer spending in 2020, compared to 21% in the US. It is clear that despite India being a huge market and growing fast, it is still early days and entering now can lay the foundation for future growth.

High Barriers to entry

The opportunities India has to offer are huge but changing regulation and rapid developments in the digital and payments landscape can be challenging, making India a difficult market to enter. Every online business hoping to make a successful entry to the Indian marketplace should be aware of these.

Even global multinationals have tried to crack India’s unique market with mixed fortunes. Some, like Amazon, eBay, Uber, McDonalds and Tata group have successfully identified and adapted to the trends and requirements of a hugely multi-faceted country and populace. Others however have struggled to make headways on entry, or even withdrawn altogether as they did not adapt their strategy to the local culture.

To succeed in India, it takes a deep appreciation of hundreds of sub-cultures and demographics. From a payments perspective, it also means understanding that local payment methods are the norm, not the exception. Therefore, offering the full range of payment modes that consumers are accustomed to alongside what are traditional payment methods in other parts of the world will be essential.

India’s unique payments ecosystem

Traditionally India has been a high-cash economy. However, in 2008, the Reserve Bank of India and Indian Banks’ Association set up the National Payments Corporation of India with the goal of migrating to a less-cash economy. The obvious replacement for cash was debit cards and since mobile phone use is so widespread, phone-based payments and eWallets.

Amongst NPCI’s many payments innovations, is the widely used Unified Payment Interface (UPI), which allows instant payments through a variety of services, including PayTM, PhonePe, Amazon Pay, Google Pay and WhatsApp pay. The impact of UPI has been immense and in February 2021, India’s UPI system crossed 2.7 billion transactions with over 100 million users, merely three years after its launch. UPI now fulfils more than half of all digital transactions in the country. The Indian government is exploring launching the UPI app internationally.

Similarly, NetBanking is a local Indian Real-time Bank Transfer product. With this solution, consumers with an account at one of several banks are able to pay for their online purchases via an online bank transfer.

RuPay, another NPCI initiative, essentially functions as an alternative to Visa and Mastercard, providing credit and debit cards, contactless payments, QR code payments and is used in nine other countries.

Equally, another great ‘must have’ for online businesses is the ability to swiftly, securely and seamlessly repatriate revenues, enabling the cross-border settlement of funds in the referred currency such as EUR, USD or GBP.

An API, or application programming interface, is basically software that acts as an intermediary between other pieces of software. As the acronym implies, an API is a program that acts as the interface between applications.

APIs play a crucial role in the Banking as a Service (BaaS) industry. BaaS sometimes called Banking as a Platform (BaaP) or banking Software as a Service (banking SaaS) refers to services that enable banks to provide digital services to customers or integrate with other digital services. BaaS providers like Treasury Prime offer API banking. Treasury Prime also connects fintechs and banks directly with each other so they can build relationships.

A BaaS company is a type of fintech company, and is sometimes referred to as “Fintech Banking as a Service”. Fintech is short for financial technology, and refers broadly to technology for financial operations. BaaS companies provide services to other types of fintechs that need to embed banking services into their applications. In addition to BaaS, fintech refers to payments apps, apps for day trading, neobanks or online-only banks, and other financial technology tools. Examples of top fintech companies include PayPal, Stripe, Square, Gravity Payments, and Affirm.

Benefits of API Banking

• Direct integration and Instant solution; Real time solution for processing banking transaction
• Secured medium of integration; Exchange data or files in encrypted environment
• Highly efficient mode of banking; Reduce turn-around time of banking transaction as initiation as well as reverse status available on customer system on real time. Easy reconciliation
• Saves time; No need to visit bank or uploading transaction files manually.

Artificial Intelligence (AI) has been around for a long time. AI was first conceptualized in 1955 as a branch of Computer Science and focused on the science of making “intelligent machines” machines that could mimic the cognitive abilities of the human mind, such as learning and problem-solving. AI is expected to have a disruptive effect on most industry sectors, many-fold compared to what the internet did over the last couple of decades. Organizations and governments around the world are diverting billions of dollars to fund research and pilot programs of applications of AI in solving real-world problems that current technology is not capable of addressing.

Artificial Intelligence enables banks to manage record-level high-speed data to receive valuable insights. Moreover, features such as digital payments, AI bots, and biometric fraud detection systems further lead to high-quality services for a broader customer base. Artificial Intelligence comprises a broad set of technologies, including, but are not limited to, Machine Learning, Natural Language Processing, Expert Systems, Vision, Speech, Planning, Robotics, etc.

The adoption of AI in different enterprises has increased due to the COVID-19 pandemic. Since the pandemic hit the world, the potential value of AI has grown significantly. The focus of AI adoption is restricted to improving the efficiency of operations or the effectiveness of operations. However, AI is becoming increasingly important as organizations automate their day-to-day operations and understand the COVID-19 affected datasets. It can be leveraged to improve the stakeholder experience as well.

Applications:

• Robo Advice

Automated advice is one of the most controversial topics in the financial services space. A robo-advisor attempts to understand a customer’s financial health by analyzing data shared by them, as well as their financial history. Based on this analysis and goals set by the client, the robo-advisor will be able to give appropriate investment recommendations in a particular product class, even as specific as a specific product or equity.

• Customer Service/engagement (Chatbot)

Chatbots deliver a very high ROI in cost savings, making them one of the most commonly used applications of AI across industries. Chatbots can effectively tackle most commonly accessed tasks, such as balance inquiry, accessing mini statements, fund transfers, etc. This helps reduce the load from other channels such as contact centres, internet banking, etc.

• General Purpose / Predictive Analytics

One of AI’s most common use cases includes general-purpose semantic and natural language applications and broadly applied predictive analytics. AI can detect specific patterns and correlations in the data, which legacy technology could not previously detect. These patterns could indicate untapped sales opportunities, cross-sell opportunities, or even metrics around operational data, leading to a direct revenue impact.

• Credit Scoring / Direct Lending

AI is instrumental in helping alternate lenders determine the creditworthiness of clients by analyzing data from a wide range of traditional and non-traditional data sources. This helps lenders develop innovative lending systems backed by a robust credit scoring model, even for those individuals or entities with limited credit history. Notable companies include Affirm and GiniMachine.

• Cybersecurity

AI can significantly improve the effectiveness of cybersecurity systems by leveraging data from previous threats and learning the patterns and indicators that might seem unrelated to predict and prevent attacks. In addition to preventing external threats, AI can also monitor internal threats or breaches and suggest corrective actions, resulting in the prevention of data theft or abuse.

• Cybersecurity and fraud detection

Every day, huge number of digital transactions take place as users pay bills, withdraw money, deposit checks, and do a lot more via apps or online accounts. Thus, there is an increasing need for the banking sector to ramp up its cybersecurity and fraud detection efforts.

This is when artificial intelligence in banking comes to play. AI can help banks improve the security of online finance, track the loopholes in their systems, and minimize risks. AI along with machine learning can easily identify fraudulent activities and alert customers as well as banks.

For instance, Danske Bank, Denmark’s largest bank, implemented a fraud detection algorithm to replace its old rules-based fraud detection system. This deep learning tool increased the bank’s fraud detection capability by 50% and reduced false positives by 60%. The system also automated a lot of crucial decisions while routing some cases to human analysts for further inspection.

AI can also help banks to manage cyber threats. In 2019, the financial sector accounted for 29% of all cyber attacks, making it the most-targeted industry. With the continuous monitoring capabilities of artificial intelligence in financial services, banks can respond to potential cyberattacks before they affect employees, customers, or internal systems.

AR is an experience where parts of users’ physical world are enhanced with computer-generated input. It can provide an interactive experience of a virtual environment in the real world.

Augmented reality solutions have the potential to substantially benefit the financial services industry. The future of mobile banking may involve apps that allow users to superimpose images and data over their real-world surroundings.

Banks that partner with fintech developers who can leverage augmented reality in banking use cases to offer greater convenience to their customers will be more likely to maintain and boost customer loyalty.

Need

Augmented realities allow users to cover digital information on top of the real-world environment. AR technology is partially immersive experience boosted by heads up display or existing smartphones. Banks and financial institutions can engage customers and create new immersive experiences through millions of existing compatible smartphones. AR can help financial service institutions to engage existing and new potential banking customers.

The need for AR in the banking sector can be deduced by the fact that it will provide consumers to view the information in a concise, engaging as well as in an immersive manner. The banks have found this challenging, and AR can help them in tackling this challenge.

Banks have also faced challenges with respect to enabling greater consumer choice and in providing greater visibility in terms of spending patterns and behaviors. It is another area where banks have encountered issues, but it is also an area where AR can have a profound impact as it will allow consumers to make informed decisions in terms of spending. It will provide customers with a new way of interpreting banking data and information.

Applications:

Virtual Trading

Some companies are making trading a virtual experience by creating virtual reality workstations for trading. Citi uses Microsoft HoloLens to give traders Holographic Workstations. This type of workstation offers 2D and 3D elements that add to the bank’s existing processes. Comarch uses virtual reality in their wealth management software to give users better access to algorithms and trading tools.

Data Visualization

Being able to visualize data is an important tool traders use to help them make important decisions about wealth management, especially as the financial industry becomes more complex and there is more data to analyze. AR and VR add to this experience and make it easier and faster to visualize and organize large amounts of data. Salesforce uses Oculus Rift to create an immersive 3D environment for analyzing data. Fidelity Labs, a part of Fidelity Investments, has also taken advantage of the technology behind Oculus Rift. They created a virtual world called “StockCity” where stock portfolios are turned into a virtual 3D city, where investors can immerse themselves in the data. Also read: Futures be augmented of virtual with AR/VR.

Virtual Branches

Digital-only banks and mobile banks are already here. But someday soon we may be able to go to a virtual bank. If customers are not able to visit a physical branch location for whatever reason, there will soon be given the possibility to go to a virtual branch. The hope is that these branches will be able to provide the same services but exclusively in a VR environment.

Virtual Reality Payments

Some companies are even making payments a virtual experience. MasterCard has partnered with Wearality to create a world where consumers can make purchases without leaving the virtual world. They have a virtual reality golf experience called ‘Priceless’ and players are able to buy clothing in the virtual world, without having to do anything offline.

Financial Education

For both employees and customers of financial institutions, education is important for understanding changes in financial systems. AR and VR have huge potential for teaching people new information in the VR Finance.

Security

In order to create a more secure customer experience, biometric security could be introduced in an AR system that could then connect with a VR world. These could be used to access VR bank services, make ATM transactions, or make payments.

Customer Service

Many financial institutions are also using AR and VR to help improve the experience of their customers. Many banks have AR apps that help customers find the nearest banks and ATMs. When in a city, they can scan the area with their phones and see real-time information about location, distance, and services at nearby banks.

Recruitment and Training

In order to provide high-quality services to customers, financial institutions need to make sure they are recruiting top talent and training all employees to give them skills that will help them do their jobs to the best of their abilities. Some banks are using a VR experience to show tech recruits how innovative and tech-savvy the bank is. Potential employees, as well as current employees, use this platform to form teams and create apps that will help the bank’s customers.

RPA is a technology used to automate manual business procedures to allow banks to stay competitive in a growing market. An RPA banking will provide customers with the ability to automatically process payments, deposits, withdrawals, and other banking transactions without the need for manual intervention. Banks are very quickly able to see an ROI from RPA.

RPA takes full form in banking as technology continues to grow. More and more people are using digital banking, cryptocurrency, and mobile payments. These are only some examples of RPA in banking. These Digital transformation projects remain at the top of the list for many banks and will continue to drive the overall technological growth of the banking process.

Intelligent Automation works in banking:

• IA enables banks to automate complex end-to-end processes.
• These processes typically involve the use of structured and unstructured data.
• Thanks to AI and Machine Learning (ML), IA systems are able to communicate using human languages, classifying, and recognizing ‘sentiment’.
• This understanding of sentiment or language enables IA to operate in a completely automated fashion, even automating workflow steps that would have previously required human intervention.

Role:

Customer Service

Banks deal with multiple queries every day ranging from account information to application status to balance information. It becomes difficult for banks to respond to queries with a low turnaround time.

RPA can automate such rule-based processes to respond to queries in real-time and reduce turnaround time to seconds, freeing up human resources for more critical tasks

With the help of artificial intelligence, RPA can also resolve queries that need decision-making. By using NLP, Chatbot Automation enables bots to understand the natural language of chatting with customers and respond like humans.

Credit Card Processing

Traditional credit card application processing used to take weeks to validate the customer information and approve credit cards. The long waiting period was dissatisfaction to customers and cost to banks. However, with the help of RPA, banks now can process the application within hours. RPA can talk to multiple systems simultaneously to validate the information like required documents, background checks, credit checks and take the decision based on rules to approve or disapprove the application.

Accounts Payable

Accounts payable is a simple but monotonous process in the banking system. It requires extracting vendor information, validating it, and then processing the payment. This does not require any intelligence making it the perfect case for RPA.

Robotic Process Automation with the help of optical character recognition (OCR) solutions can solve this problem. OCR can read the vendor information from the digital copy physical form and provide information to the RPA system. RPA will validate the information with the information in the system and process the payment. If any error occurs, RPA can notify the executive for resolution.

General Ledger

The banks must keep the general ledger updated with information like financial statements, revenue, assets, liabilities, expenses, and revenue which is used to prepare financial statements. Financial statements are the public documents that are then accessed by the public, stakeholders, and media. Considering the amount of detailed information in the statement, errors in the report can very badly affect the bank’s image.

To create the statement, the bank needs to update information from the multiple legacy systems as these systems cannot integrate, verify it and make sure that the general ledger is prepared with no errors. With this amount of data from multiple systems, it is bound to have errors. Here comes RPA to the rescue. RPA is independent of the technology and can integrate data from multiple legacy systems to present in the required format even if the data in the systems are not in the same format. This reduces the huge amount of data handling and time.

Report Automation

Like all other public companies, banks need to prepare reports and present them to their stakeholders to show their performance. Considering the importance of the report, there is no chance for the bank to make an error.

While RPA systems provide data in multiple formats, they can create reports by auto-filling the available report format to create reports without errors and minimum time

Account Closure Process

With such a huge number of customers, it is supposed to get some account closure requests monthly. There can be various reasons for the account closures and one of them is when a client has failed to provide the mandatory documents.

With Robotic Process Automation, it is easy to track such accounts, send automated notifications, and schedule calls for the required document submissions. RPA can also help banks to close accounts in exceptional scenarios like customers failing to provide KYC documents.

Fraud Detection

With the introduction of digital systems, one of the major concerns of banks is fraud. It is really difficult for banks to track all the transactions to flag the possible fraud transaction. Whereas RPA can track the transactions and raise the flag for possible fraud transaction patterns in real-time reducing the delay in response. In certain cases, RPA can prevent fraud by blocking accounts and stopping transactions.

KYC Process

Know Your Customer (KYC) is a mandatory process for banks for every customer. This process includes 500 to 1000+ FTEs to perform necessary checks on the customers. According to Thomson Reuters, banks spend more than $384 million per year on KYC process compliance.

Considering the cost of the manual process, banks have started using RPA to validate customer data. With increased accuracy, banks no longer have to worry about the FTEs and the process can be completed with minimal errors and staff.