“Do you know why banks are using Bots for KYC?”

Let's face it— KYC is known as (Know Your Customer) is one of the most mundane and tedious tasks in banking systems. Collecting documents, inquiring after identities, cross-referencing sanctions lists — there is a lot of work. For customers, it’s frustrating. For banks, it’s costly.

That’s exactly where the RPA development services come in. Today with the use of Robotic Process Automation (RPA), banks are automating these KYC processes to cut costs, lower errors, and maintain compliance — all without losing that human element.

What Is RPA and Why Does It Matter in Banking?

RPA is short for Robotic Process Automation. It enables software robots (known as “bots”) to perform human actions such as reading emails, copying data from databases, or filling out forms — but they do so faster, 24/7, and without mistakes.

That’s precisely why RPA in banking is exploding. RPA Market size is estimated to be valued at nearly $200 billion by 2034. Precedence Research, global RPA Market Size is Predicted to reach $200 billion by 2034 at a CAGR of above 25.9%. Banking and finance head these gains.

So, What’s Wrong with Traditional KYC?

But before we get into more of this, a brief look at what problems banks face with (manual) KYC:

1. Data entry requires too much time

2. Documents are processed slowly

3. High chances of human error

4. Repetitive checks bore employees

5. But there’s always the risk of regulatory fines if something is missed.

Banks are increasingly feeling the heat to onboard customers faster with the highest possible level of compliance. It’s an inefficient process for sure—and that’s exactly why many companies have begun to use intelligent automation services to address the problem.

How RPA Simplifies the KYC Process (Step-by-Step)

Here’s how you can make a lean KYC process even smarter with RPA:

1. Document Collection and Scanning

After a user uploads their ID proofs or utility bills, the bots can scan and capture this data using OCR (Optical Character Recognition) using the bank’s portal (which is usually developed through website development).

2. Data Validation

The bot then cross-references the information automatically with its internal systems and government databases.

3. Sanction List Checks

It’s a quick pass around the world of watchlists, and will alert a compliance team if the customer is flagged.

4. Risk Profiling

Bots can easily determine and calculate a perfect risk score according to the customer’s information and data available. If it is low, the system approves them automatically. If it’s high, you get flagged for review.

5. Record Archiving and Reporting

The bot keeps all records safe and produces reports for auditing.

6. Ongoing Monitoring

Even after that, bots continue to look for evidence of money laundering or fraud within customers’ activity.

This is real-world intelligent automation services in action.

Real Life Results: What are Banks Doing?

Now let’s look at what’s happening in the world out there.

1. A leading Indian bank using Datamatics RPA managed to reduce 50% man-hours, grew productivity by 60% and achieved 100% accuracy in KYC data extraction.

2. State Street Bank deployed RPA, which successfully reduced processing time for KYC by 49%.

3. One bank running UiPath and Blue Prism tools reported saving $1 million a year on its compliance work.

It is evident that even employing RPA development services in KYC comes with actual, tangible advantages.

KYC is Only the Beginning: How RPA Assists in Other Areas of Banking

RPA in Accounting and Reconciliation

Banks also employ bots in accounting functions, such as:

1. Matching transactions

2. Reconciliation reports

3. Generating balance sheets

4. Auditing internal records

RPA automation in accounting and reconciliation eliminates errors and accelerates end-of-month closings. There will be days no longer spent seeking that one mismatch!

Website Development and Customer Experience

Bots are also included in the online portals of banks. For instance, a customer submits KYC documents through a self-service portal, created through website development. Bots basically grab the relevant and useful data and details from a particular section, then check it and the customer is onboarded — no human intervention necessary in this entire process.

Conclusive Advantages of RPA Development Services for KYC 

And these are the primary reasons banks are adopting RPA:

Faster Onboarding

Something that used to take 12 days has been reduced to 2 days or less, as illustrated through case studies shared by Matellio.

Fewer Errors

There are no tired bots, there are no distracted bots. Their accuracy is almost 100% with proper training.

Cost Savings

The operational costs for a bank can be reduced by 30–70% (depending on the process). One UK bank has been able to save up to £27 million a year through the automation of compliance functions (Octoparse).

Better Compliance

Everything is logged and tracked, so there’s always a paper trail.

Employees Focus on High-Value Work

Now, instead of simply keying in data, even the most junior workers can do complex jobs, like detecting fraud or cultivating new business.

Challenges to Keep in Mind

But, of course, RPA is not a magic cure. Banks do have a couple of challenges:

1. Legacy Systems: Outdated software is difficult to integrate with

2. Bad OCR quality: Scanned documents with bad quality may have to be reviewed manually

3. Change Management: Employees may push back against new tech without training

But these problems can be overcome with the right RPA development services from experts.

What’s Next? The Future of RPA in Banking

Then there’s the next wave of automation, when you start combining RPA with AI and machine learning — something that’s referred to as hyperautomation. This generally not only enables the bots to automate and scheduling tasks but also to think, learn from data and details and make decisions further.

Banks are already experimenting with:

1. Document understanding with LLMs

2. Chatbots for onboarding

3. Fraud detection powered by AI

4. Explainable AI for compliance reviews

These are the technologies that will set the stage for intelligent automation services in the future.

Final Thoughts

KYC no longer has to suddenly be a big burden. With RPA for banking, banks can process applications quickly, save money, remain compliant, and ultimately enhance the customer experience.

If you’re a financial institution that has not yet embraced automation or that depends on manual KYC operations, it’s high time you consider RPA development services. KYC to RPA in accounting and reconciliation, automation can help banks to do more with less.

Want to get started? Find RPA consultants who have backend and web development skill sets. That means you can digitise your entire customer journey from beginning to end.