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The compliance landscape is becoming increasingly complex with time. The constant changes in the regulatory environment, a lack of understanding of compliance measures, limited technology capabilities, and the uncompromising internet restrictions are the primary reasons why companies are looking for strong compliance measures.

Furthermore, compliance becomes increasingly sophisticated as time goes on, making it more difficult and costly for firms to comply. Regulatory costs in banking climbed from 4% to 10% of banking revenue last year. Now, to ensure successful compliance management, an automation-first strategy or the use of robots is the way to go.

In this article, we will tell you everything about what RPA is, how it helps in business compliance, what its benefits are and how you can effectively and efficiently implement RPA in your business organization. Let’s get started.


What Is RPA (Robotic Process Automation)?

RPA stands for Robotic Process Automation and is a software technology that allows anyone to automate digital operations.

RPA allows software users to develop software robots, or "bots," that can learn, mimic, and then execute business operations based on rules. Users can construct bots using RPA automation by monitoring human digital actions.

In short, demonstrate what you want your bots to do, then leave them to it.

Robotic Process Automation software bots can interact with any application or system in the same manner that humans can, with the exception that RPA bots can work around the clock, nonstop, far faster, and with 100% accuracy and precision.

What is Compliance? Where can Automation Help?

Simply said, compliance involves adhering to laws, policies, and regulations in order to protect data integrity, data security, and employee and customer privacy. Different departments and industries have different compliance challenges.

Governmental mandates and internal corporate policies are the two most common types of compliance. The following are examples of common governmental compliances by industry/business area:

  • Healthcare - Government compliance acts protect patient privacy by requiring healthcare organizations to safeguard patient information. Scheduling, billing, record management, remote care, document digitization, and data entry are critical areas for automation.
  • Banking - Equal Credit Opportunity (ECO)  bans lenders from discriminating against credit applicants, establishes procedures for collecting and assessing credit information, and mandates written notice when credit is rejected. Customer onboarding, report production, trade finance, bank reconciliation, and application processing are all crucial areas for automation in this area.
  • Insurance and financial services -  The federal Gramm-Leach-Bliley Act (GLBA) governs how financial institutions and their related firms protect the personal information of their customers and consumers. Quote to cash, procure to pay, and record to report are all areas where finance can be automated.
  • Employers in all industries are prohibited from adopting adverse employment measures based on race, colour, sex, ethnic origin, handicap, or age under anti-discriminatory laws. Tracking and updating employee information, onboarding, performance management, and payroll are all areas where automation can help.

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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.

Organizations can use RPA to develop robust and top-tier compliance procedures. Automation provides a new degree of control, allowing businesses to track and control their internal business operations. These logs may be checked and monitored at any time, allowing companies to address any compliance issues that occur quickly.

Robots log every activity of them and the humans with whom they interact, providing firms with a 100 per cent accurate audit trail that auditors may access at any moment in the event of a compliance audit.

What Are the Benefits of RPA in compliance?

Here are some ways in which RPA benefits organizations:

1) Better Compliance Management

RPA installation can improve many areas of compliance operations. For example, the capacity of RPA to retrieve and aggregate data from many sources can improve regulatory reporting efficiency by reducing the time spent collecting, synthesizing, and summarizing vast amounts of data.

RPA also makes it easy to map policies for corporate rules, procedures, and processes while ensuring that automation activity is compliant.

2. Increased Productivity

Traditionally, compliance teams have to run a series of separate tests to see if their operations are in conformity with specific rules, laws, and regulations and alter internal policies as needed.

Thousands of these tests must be carried out by a major firm. Planning, document/evidence gathering, test execution, and reporting are required for each test.

RPA implementation can enhance employee engagement by automating repetitive and manual tasks like monitoring and testing. As a result, the employee tasks can be refocused on things like quality assurance and judgment-based monitoring and testing.

3. Increase in Auditability

An audit might happen at any time, and keeping track of staff activity is crucial. However, this monitoring can suffer because of human error, and companies might not get accurate results.

Robots or RPA, on the other hand,  save all their actions in an activity log and provide firms with an audit trail that properly displays which procedures were completed and how and when exceptions were produced, and how employees intervened to resolve the difficulties.

Furthermore, RPA aids in cost reduction, quality improvement, and improved employee satisfaction. Organizations can eliminate legal concerns and avoid litigation and monetary fines by automating compliance.

Organizations can also incorporate internal safeguards that boost day-to-day operations by guaranteeing compliance and complying with legal responsibilities. RPA also helps firms create a safe working environment by improving customer and employee retention.


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What Compliance Processes Are Relevant to RPA?

Any procedure that is very repetitive, in general, is a prospect for RPA automation.

Data entry and data validation are two examples, but bots might also be used for report production and dissemination, emailing customers, sending invoices, administering payroll, organizing appointments, and much more.

There are various tasks in internal compliance where Robotic Process Automation can provide great help, such as:

  • Robotic Process Automation activities can be built to gather data and input information into a risk assessment tool that further evaluates the audit. With bots, this gathering and assessment can run indefinitely, and the result is ongoing risk assessment and audit planning. The output could be programmed to make a recommendation and be configured to suggest a compliance schedule based on rules such as priority scheduling and skill-based assignments.
  • Furthermore, automated testing and its exceptions can be delivered to the control owners for the most basic checks. The ultimate goal of testing is to eliminate audits from the equation. For example, the tasks of Robotic Process Automation might be held by the company, and the bots would then be put to the test as a control.
  • Reporting, as well as reminders for corrective action updates, can be coded for automation and automatic distribution.

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The 5 Biggest Opportunities for Robotic Process Automation to Assist Internal Compliance

1. Analytical data collection and cleansing

An RPA Center of Expertise (CoE) can generate and standardize data for custom analytics, as well as pull data for internal and external auditors, including automation checks for field completeness, duplicates, and validity, among other things. As a result, internal compliance will no longer have to spend time coordinating and acquiring data.

2. Risk evaluation

Bots can assist in automating the data collection and classification stages of the annual risk assessment process. They accomplish this by obtaining early input from participants and identifying key trends. This enables in-person discussions to focus on trend analysis and deep dive into the organization's concerns.

3. Population control

Bots can help in the processing of data populations during sampling and initial evidence gathering for standard evidence for controls. Not to forget, automated bots can do so more efficiently and precisely than humans. This is very useful when dealing with big populations that require a lot of processing time, such as examining hundreds of statement papers.

4. Controls automation

Bots can do control testing, especially in standardized sections where tickets and fields are utilized routinely. Internal audit is no longer necessary to complete those routine checkmarks.

5. Project Management Office (PMO) areas for internal audit.

RPA can help in a number of areas, including:

  • Identifying open items, sending follow-up emails, and keeping track of status, among other things
  • Monitoring progress in relation to a project plan or an annual audit plan (can use RPA to monitor KPIs in the process)
  • Reporting automation - Report templates, audit committee slides, and so on

RPA’s Impact on Driving Value in Internal compliance

Enhanced coverage

Internal compliance experts can receive additional coverage across the organization (more data, transactions, etc.) without increasing the time or FTE required to analyze huge data populations by having a bot manage and drive the whole analytics. RPA also enables teams to identify outliers in data/transactions and focus on them.

Time and money saved can be put towards more value-added interactions.

RPA is especially beneficial to internal compliance teams that constantly engage and coordinate with the company and external auditors. Internal compliance can shift its attention from supporting external compliance operations like evidence collecting and sample gathering to operational reviews with the business, thanks to audit automation.

On-demand access to information on a department's performance

Automation in reporting and project tracking enables on-demand visibility into performance – both in terms of the plan and individual KPIs.


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RPA Use Cases for Compliance

Risk monitoring, risk controls, and risk reporting are areas where RPA is used.

The following are some of the specific use cases that are now seeing a lot of RPA adoption across organizations:

Anti Money Laundering (AML) alerts

The majority of the processes for researching and addressing anti-money laundering warnings are manual or semi-automated, making RPA a viable option.

Onboarding of KYC

Connecting diverse data from numerous internal systems and external sources during the know-your-customer onboarding process is a challenging endeavour.

RPA has the potential to be useful in this domain as well. These robots, for example, can collect and retrieve data from regulatory organizations such as the Securities and Exchange Commission (SEC) and law enforcement agencies such as the FBI and Interpol, as well as assist in the onboarding process. In addition, RPA has been used by several banks in the KYC process, such as document gathering and validation.

Internal and External Reporting

The process of obtaining data and preparing internal and external regulatory reports is largely manual in many banks. For example, daily liquidity coverage and delinquency reports are frequently created manually in banks and can be automated using RPA.

Limit Management

Risk officers assess and close limit breaches or violations as part of the limit management process. Because the resolution entails manual data assimilation from several sources and manual analysis to arrive at judgments, cognitive RPA solutions can assist in the limit management process by utilizing RPA for data assimilation and machine-learning approaches to aid decision-making.

Reconciliation

Reconciliations happen at many levels in banking, and they're also a big part of internal and external management reporting. However, most of the reconciliation operations, particularly in data gathering and preparation, are manual in nature and might benefit from RPA.

Remediation of mortgages

Mortgage lending, in particular, accounts for a significant portion of retail lenders' revenue.

In these remediation scenarios, both banks and regulators want to guarantee that client interaction are responsibly managed. Now practices such as using the interest rate, calculating fees for overcharging/deductions for late payments or deductions for equated monthly instalments (EMI), or handling customer complaints require lots of hard work and precision.

Also, because of the enormous volume, completing all of the corrective stages, beginning with scoping a client refund or modification, might take months.

RPA can solve these problems by automating all the processes while maintaining precision.


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Methodology to Implement RPA in Internal compliance

1. Make a list of the processes you want to automate.

RPA isn't appropriate for many business processes. Instead, businesses should devise a strategy for selecting the best processes and then prioritizing them based on factors such as complexity and return on investment. Then, consider how automating these activities will appear, what it will accomplish, the business context in which it will be used, and how it will fit into future business operations or the overall automation journey.

2. Perform a Feasibility Analysis

Perform a feasibility analysis for each process to determine how much can be automated.

This is a two-step process that involves examining the process and determining technical viability. This assessment should be carried out by the operation user, an SME (Subject Matter Expert), and an RPA expert.

3. Make any necessary adjustments

Determine whether procedures are not structured, standardized, optimized, recorded, or implemented as planned based on the feasibility assessment study. Attempt to re-optimize and restructure the process at this point.

4. Collect user testimonials

A user story defines the aspects of an application that will be constructed from the perspective of the end-user. It goes over all of the user needs in great depth. It's also critical to obtain a thorough description of each operation that will be automated. Develop a process description document with defined RPA processes for the development team based on this information.

5. Begin the development procedure

The development process begins at this step, depending on the RPA workflows that have been generated. Using RPA tools such as UiPath, Blue Prism, and others, the developers generate automated scripts and program code. Because each RPA solution has its own set of capabilities, firms should be very particular when selecting the right tool for their purposes.

6. RPA Process Validation

Conduct extensive testing to examine performance in all possible scenarios and to identify faults when the procedure is run. Send any potential performance or bug issues to the development team for resolution.

7. Double-check and deploy

Once the development teams have corrected the initial tests and problems, double-check the results and deploy the entire RPA solution.

FAQs

What steps should I take to ensure that my RPA systems are compliant?

  1. Move critical data and privileged credentials from scripts and any other vulnerable areas to an encrypted, central location.
  2. Apply the lowest degree of privilege to the RPA bots and only give them privileged access when it's absolutely necessary to complete a specific task that requires access to a secure application or data source.
  3. Secure access to your RPA technology by using complex credentials that are constantly reviewed by RPA administrators, as well as isolating and monitoring RPA processes for suspicious activity.
  4. Create alerts that will stop all activity if any of these things happen.

What are some challenges in RPA Implementation?

  • Wrong expectations of RPA
  • Using the wrong tools
  • Working with an inexperienced RPA partner
  • Inability to calculate ROI
  • Identifying the wrong processes for RPA implementation
  • Technical and operational issues
  • Stopping short of the full, end-to-end process
  • Lack of support from leadership
  • Shortage of skilled team
  • Preparing the workforce for a shift in workload

What Is the Difference Between RPA and Traditional Automation Solutions?

The “ability to learn” is the main factor that distinguishes robotic process automation from classical automation.

The bot's learning algorithm minimizes the number of false positives and offers more accurate findings over time. However, the true benefit of Robotic Process Automation comes from the increased efficiency gained as the automation becomes more precise.

What are some Key Considerations before Implementing RPA?

Before you implement RPA, there are a few things that you must keep in your mind, such as:

1. Define the automation vision and strategy in detail. To do this, seek out procedures that:

  • Have a well-defined Return on Investment (ROI) (ROI)
  • Relate to an area where the company faces a significant business
  • Obtain data that is both dependable and of high
  • Are they rule-based and largely consistent throughout
  • Are they time-consuming and prone to human error?

2. Identify the most viable tests and procedures for automation by defining roles, responsibilities, and structures.

3. Develop standardized documentation and processes for approving designs and deployment methodologies. Don't assume that existing manual procedures are policy-compliant or ready to be automated. Before deploying a new system, some inefficiencies may need to be addressed.

4. Collaborate with your security team to establish bot authentication mechanisms and develop privacy and data security regulations.

5. Clearly define change management processes and procedures.

6. Test and monitor on a regular basis.

Likewise, there are some factors to consider after RPA implementation. Have a look at them all:

  1. Consider metrics and how to track them. For example, how will you calculate ROI over the bot(s)' lifetime?
  2. Consider establishing a robotic centre of excellence (CoE) for improved governance after successful development and rollout.
  3. Devise a strategy if the bots aren't performing as intended.

How does RPA help in conducting background checks and preventing fraud?

Anti-money laundering rules require banks to verify that the source of their customers' funds is legitimate. In addition, assessing the risk of money laundering necessitates regular client monitoring and screening. Regrettably, these required and critical duties can consume a significant amount of time.

You may use RPA bots to swiftly and efficiently execute background, credit, and fraud detection checks on each customer, alerting you to any danger indications. The reports can then be stored in a centralized area so that you can prove compliance when necessary.

What are some consequences of noncompliance?

  • Financial repercussions/penalties: Non-compliance comes at a high price. The average cost of a single noncompliance occurrence is $4 million, while the total cost of noncompliance is $14 million.
  • Audits of compliance: Compliance auditing takes time away from revenue-generating activities for business owners and staff.
  • Suspension or dismissal: A non-compliant corporation may be required to cease operations or shut down entirely, depending on the severity of the violation.

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