Robotic Process Automation in BFSI Market Size, Market Research and Industry Forecast Report, 2025 (Includes Business Impact of COVID-19)

                                          
Industry Insights, Market Size, CAGR, High-Level Analysis: Robotic Process Automation in BFSI Market


The global robotic process automation in BFSI market size was valued at USD 167.1 million in 2018 and is anticipated to register a CAGR of 31.3% from 2019 to 2025. Banking and financial services, alike other industries, are multidimensional service areas, having several processes running at the back end as well as the front end. Some of the functions in the banking, financial services and insurance (BFSI) sector that could be improved using robotic process automation (RPA) are payable accounts, credit card processing, overall customer service, account closure process, opening accounts and receivables, and mortgage processing, among others. A growing need for improving productivity of banking operations, coupled with the increasing penetration of advanced technologies in the BFSI sector, is expected to boost the demand for RPA significantly.

BFSI organizations are widely deploying RPA and AI to increase their productivity and efficiency. In a highly competitive BFSI market, it has become essential to increase the agility of work and deliver enhanced customer experience. RPA bots can work across different legacy systems to retrieve information available on a digital platform. For instance, bank users can check their accounts online and set up automatic bill payment & KYC verification, among other functions, with the use of internet. These services have reduced manual intervention and are assisting in delivering better customer experience. However, there are various other back-end and front-end office processes that can be automated using RPA solutions.

The awareness about RPA among BFSI organizations has increased over the past years. A significant level of RPA integration into service offerings offered by robot orchestration, Business Process Organizations (BPO), enterprise-level robot deployments, and centralized robot dashboard management has led to an increased adoption of RPA in the BFSI sector. Moreover, the need to eliminate repetitive and time-consuming manual tasks has potentially created growth opportunities for RPA providers in the BFSI sector. RPA offers banks and financial institutions an opportunity to remain competitive in the BFSI market.

The BFSI sector is facing challenges such as intense competition, workflow disconnect, and inaccurate reporting of transactions. Most of these challenges arise due to tedious operational processes. RPA is a concrete solution that can efficiently manage these operational challenges and compliance. RPA helps organizations by handling back-office operations and subsequently freeing the resources to focus on customer service. It helps realize 25 -50% cost reduction by automating repetitive and data-centric tasks and by improving the turnaround time & accuracy of executing different processes. Additionally, software bots can be deployed 24/7 for driving higher levels of productivity and reducing latency.

RPA can be utilized to optimize processes such as fraud detection, new account entry, account reconciliation, e-form extraction, mortgage approval, credit card order processing, and so on. It majorly helps in automating workflows and back-office processes, which are labor-intensive. The primary use of RPA is to replace repetitive clerical tasks performed by humans with a virtual workforce in order to facilitate faster execution of business processes. Currently, BFSI organizations are focusing on optimizing processes and improving the overall efficiency of business operations.

Type Insights of Robotic Process Automation in BFSI Market

Based on type, the robotic process automation in BFSI market can be segmented into software and services. The services segment accounted for the largest market size in 2018 and is also expected to register the highest CAGR over the forecast period. The services segment is further bifurcated into consulting, implementation, and training. In order to cope with the intense industrial competition, service providers are focusing on the enhancement of advisory, training, and consultancy services. These enhancements facilitate cost reduction of various BFSI processes by minimizing the efforts of a Full-Time Employee (FTE).

The RPA services specifically focus on the identification of automation opportunities in different organizational processes. Moreover, the service providers also help in planning the development of a suitable solution, choosing the right vendors, and proofing concepts of the solutions to check their real-time usability. All such activities enable precise deployment of RPA platform, thereby strengthening the core of automation within a BFSI organization. RPA solutions help reduce compliance costs and the overall risks occurring due to information deficits & other operational gaps.

Service Insights of Robotic Process Automation in BFSI Market

Based on service type, the market for BFSI RPA is segmented into consulting, implementation, and training. The consulting segment accounted for the largest market share in 2018 while the training segment is anticipated to register the highest CAGR over the forecast period. The growth of the consulting segment can be attributed to the growing awareness of automation software across several industries. BFSI companies are adopting these solutions to offer enhanced services to customers. Therefore, the demand for RPA consulting service is growing rapidly.

The continuous need for technological transformation is driving the demand for RPA in the BFSI sector. The increasing deployment of RPA solutions is boosting the demand for RPA implementation and training services. RPA providers are focused on offering a customized solution that suits different business requirements. This is expected to drive the demand for RPA services in BFSI over the forecast period. Moreover, the application management and related consulting services are being used to reduce operational costs, enhance productivity, and improve scalability.

Organization Insights

Based on organization, the market for BFSI RPA is segmented into SMEs and large enterprises. The large enterprises segment accounted for more than 60% of the market share in 2018. However, the SMEs segment is expected to gain momentum over the forecast period. The awareness about the use of RPA services & solutions to eliminate mundane processes is increasing among SMEs operating in the BFSI sector. Moreover, the growing need to automate manual tasks is anticipated to drive the demand for RPA in SMEs.

Large enterprises have a higher number of processes that need to be optimized, in addition to a greater need for process optimization & compliance. Moreover, higher spending capacity of the large enterprises potentially gives them additional advantage over other organizations. They adopt RPA solutions to enhance their overall business processes. On the contrary, SMEs have a low budget and limited human resources. Thus, they are focused more on lean management than spending on a third-party solution. The identification of processes that can potentially be automated in SMEs is increasing. Many small financial service providers are anticipated to adopt RPA solutions for better utilization of available resources and enhancement of customer services.

Application Insights of Robotic Process Automation in BFSI Market

Based on application type, the market for robotic process automation in BFSI is segmented into banking and financial services & insurance. The banking segment accounted for the largest market share in 2018. Lack of skilled resources, high personnel costs, and the need to increase productivity are the key factors driving the adoption of RPA in the banking sector. Furthermore, the rising market pressure is impelling banks to seek different opportunities in order to reduce operational costs, maximize efficiency, and accelerate their productivity gains. In addition to enabling easy review of documents, owing to its accessibility, RPA in banks has helped create transparency in an organization, where every transaction can be recorded, categorized, and stored.

The financial services & insurance segment is anticipated to register the highest CAGR over the forecast period. Identifying and automating various processes in the financial services sector is becoming a key priority of RPA vendors. RPA solutions have helped financial services providers to assign employees for value-added tasks to enhance organizational value. The structured legacy systems in BFSI organizations are hard to integrate with the advanced RPA solutions and modernizing of legacy systems becomes a challenge in terms of data accessibility and data migration. In such cases, RPA services, which enable seamless transition, are used. RPA helps organizations automate a time-consuming task so that an employee can focus on customer services by realigning organizational resources.

Regional Insights of Robotic Process Automation in BFSI Market

The North American region dominated the market for robotic process automation in BFSI in 2018 and is expected to continue to dominate over the forecast period. It is estimated that a U.S. bank with USD 10+ billion assets spends an average of USD 50 million per year on KYC compliance, CDD, and onboarding. The increasing cost of KYC and AML compliance, steep fines, and regulatory scrutiny for non-compliance are necessitating banks and financial institutions to consider new technologies such as automation to identity & prevent theft, financial fraud, money laundering, and terrorist financing, as well as eliminate manual tasks, improve compliance with government regulations, and reduce costs of compliance. Moreover, the growing need for process management and automation solutions in the BFSI sector is anticipated to boost the regional market growth.

The Asia Pacific region is expected to register the highest CAGR over the forecast period. An increasing number of financial institutions in the Asia Pacific have identified processes suitable for RPA. Furthermore, BFSI organizations are using RPA and AI in areas such as back-office operations for compliance automation & process streamlining and front-end operations for customer service enhancement. Moreover, an increasing number of businesses in the Asia Pacific region are adopting RPA solutions to increase production through faster execution of business processes, bolster overall financial performance, and maintain a competitive edge.

Market Share Insights of Robotic Process Automation in BFSI Market

Prominent participants in the market for robotic process automation in BFSI include Automation Anywhere Inc.; Blue Prism; Kofax Inc.; Kryon Systems; NICE; Pegasystems Inc.; Thoughtonomy; UiPath; Softomotive; and WorkFusion, Inc. The market leaders are focusing on providing diverse and customized solutions that cater to the needs of every customer in order to gain higher market shares. Moreover, companies such as Automation Anywhere Inc. are expanding their operations in the Middle Eastern region. Digital transformation continues to achieve traction in the region and is supported by different government policies such as Saudi Arabia Vision 2030 and the UAE Strategy for Artificial Intelligence (AI) owing to the exponential increase in customer demand for automation in the region. Mergers and acquisitions are regularly practiced in the market to expand product portfolio, extend geographical reach, and gain market share.

p2 Segments covered in the report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, this market research report has segmented the global robotic process automation in BFSI market report on the basis of type, service, organization, application, and region:

Type Outlook (Revenue, USD Million, 2019 - 2030)

  
Software
  
Services

Service Outlook (Revenue, USD Million, 2019 - 2030)

  
Consulting
  
Implementation
  
Training

Organization Outlook (Revenue, USD Million, 2019 - 2030)

  
SMEs
  
Large Enterprises

Application Outlook (Revenue, USD Million, 2019 - 2030)

  
Banking
  
Financial Services & Insurance