Assessing the Usefulness of Business Process Management and Robotic Process Automation in the Financial Industry

In the ever-evolving landscape of financial services, organizations seek ways to enhance efficiency, reduce costs, and improve customer experiences. Two powerful tools—Business Process Management (BPM) and Robotic Process Automation (RPA)—play pivotal roles in achieving these goals. Let’s delve into their scope, benefits, and how they impact the financial industry. Although they have overlapping features, their differences are significant in various aspects. This insight provides a concise comparative analysis of BPM and RPA, focusing on four main criteria: scope, automation level, complexity of implementation, and anticipated advantages.

What is Business Process Management (BPM)?

Business Process Management (BPM) is the deliberate act of designing, modeling, executing, monitoring, and refining business processes.

BPM initiatives are usually supported by dedicated IT products of two types: BPM Suites and BPM Frameworks. The first category refers to pre-built software packages with low-code approach (e.g. PEGA, TIBCO). The second category encompasses coder friendly libraries to integrate in custom developed software products (e.g. Camunda, Activiti).

What is Robotic Process Automation (RPA)?

Robotic Process Automation (RPA) is a technology designed to automate tasks within IT and business processes. It uses so-called “robots/bots” or “digital workers” that emulate human interaction with user interfaces of applications involved in the process.

The primary goal of the technology is to automate standard repetitive time-consuming tasks to save costs, accelerate company digital transformation and re-direct employee efforts towards more creative activities.

BPM vs RPA

Let’s assess the two approaches based on 4 criteria: scope, level of automation, implementation complexity, and expected benefits.

Scope

Business Process Management focuses on managing and improving end-to-end business processes, i. e. comprehensive workflows that encompass all the steps and activities required to achieve a specific outcome: trade settlement process, account onboarding, claims processing in insurance, etc. It involves analyzing, designing, implementing, and continuously optimizing processes for increased efficiency, effectiveness, and agility.
Robotic Process Automation primarily focuses on automating specific repetitive tasks within existing processes. Classical examples could be data entry and updates, invoice processing, some of the HR tasks, report generation and distribution and so on.

Level of Automation

BPM provides a framework for automating tasks and workflows but doesn’t necessarily require automation for every step. While automation can be applied to some repetitive tasks, most of end-to-end processes have critical decision points where human judgment and intervention are necessary. BPM helps to ensure that the right people are involved at the right stages, tracks progress, and provides status visibility, all without requiring full automation of every step. This flexibility allows organizations to balance automation with the need for human oversight and decision-making in their processes.
RPA is primarily focused on automation using software robots to mimic human interaction with applications. As an example, robots can be programmed to interact with invoice data and an accounting system’s user interface to automate the entire process, from data extraction to data entry, with minimal human intervention. This not only accelerates the task but also reduces the likelihood of errors, leading to increased efficiency and accuracy in the accounting department.

Implementation Complexity

Implementing BPM initiatives can be complex and time-consuming. It requires a thorough understanding of existing processes, stakeholder buy-in, process modeling, and potentially significant changes to organizational structure, systems, and culture.
RPA implementation is usually relatively straightforward and less complex compared to BPM. It involves identifying the tasks suitable for automation, developing, and testing the robots/bots, and integrating them with existing systems. RPA can often be implemented with minimal disruption to existing processes since it does not require reengineering and optimizing entire end-to-end processes.

Expected benefits

BPM projects are often expected to bring strategic benefits including improved process efficiency, resource utilization, customer satisfaction together with risk mitigation and improved compliance. BPM’s strategic benefits often require a longer-term perspective to fully realize their impact. While some immediate cost savings and efficiency gains may be evident, the cultural, customer-centricity, risk mitigation, and innovation aspects of BPM contribute significantly to an organization’s long-term success and competitiveness. These benefits may not always be easily quantified in the short term but are vital for sustained growth and resilience in the business landscape.
RPA projects usually aim at delivering “quick wins” in the way of reduced labor costs, increased process speed, accuracy, and scalability. Let’s say, a company receives an average of 1,000 supplier invoices per month. Each invoice takes an average of 10 minutes for an employee to process, including data entry, validation, and approval. If the process is automated, it would save more than 150 hours of work every month.

Which approach to choose?

Overall, BPM and RPA serve different purposes in process management and automation. BPM takes a holistic approach to optimize end-to-end processes, while RPA usually targets specific tasks for automation. Depending on the specific needs and objectives of an organization, they can be used together or independently to drive process efficiency and productivity.

Optimizing the entire transaction processing and settlement operation in a bank is an excellent candidate for a Business Process Management (BPM) project, given its complexity, high volume, stringent regulatory requirements, and the involvement of multiple departments. Proper implementation will yield substantial benefits, including cost savings, increased efficiency, minimized risks, and enhanced scalability. Robotic Process Automation (RPA) could contribute to this project by automating the extraction of data from diverse sources, managing payment processing tasks such as verifying instructions, executing calculations, and creating payment orders, as well as reconciling transactions by comparing records across various systems or databases.

The real question is not whether to enhance processes, but rather which frameworks and tools are best suited to achieve that goal. In the words of Bill Gates:

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

How can Be help?

At Be, we harness our extensive knowledge of the financial sector and blend it with our proficiency in Business Process Management (BPM) and Robotic Process Automation (RPA) to guide our clients towards the most effective strategies for their distinct needs. We are committed to treating each client as unique, tailoring best practices to meet their specific requirements. Contact us to learn about our service offering and start optimizing your processes!

About the authors

Pedro Ferreira Sales is responsible for the Business Process Management service portfolio at Be – Shaping the Future, where he contributes his many years of experience as a line and project manager in process management at systemically important banks. His particular focus is on generating concrete and objectively measurable added value through the optimisation of processes.

Vlad Lapko is a Senior Business Analyst at Be – Shaping the Future. He has extensive theoretical and practical experience in Business Process Management (BPM). His particular focus is on the automation and visualisation of business processes in order to create measurable added value.