Combining IPA & RPA to Automate Lockbox Processing

November 5, 2020 / Commercial Banking, Financial Services, Intelligent Process Automation, Robotic Process Automation, Use Case

using intelligent automation to process lockbox requests

In yet another example of an automation use case where robotic process automation (RPA) alone cannot get the job done, this week we bring you an example from the financial services realm: lockbox processing. It’s an example of a process that requires an intelligent automation tool to “read” documents that include unstructured content, in this case invoices and checks, before handing off to an RPA tool for additional processing. 

A lockbox is a service that financial institutions including commercial banks offer. Similar to a post office box to which companies have customers send correspondence, a lockbox is a service offered by commercial banks whereby companies can have their customers send payments to the bank. For a fee, the bank takes care of matching each payment to an invoice, helping to streamline the accounts receivable process for its client company. 

RPA alone is not enough

The lockbox process involves two basic types of documents: invoices and checks. Invoices from different companies may look quite different from one another, of course. The same goes for checks coming in from customers. Lockbox processing involves taking the incoming checks and matching them to one or more invoices. 

When you’re talking about thousands of checks and invoices, you can see where the process would be highly time-consuming and tedious for a human. That’s why commercial banks are keen to automate lockbox processing. 

But given the varied nature of those invoices and checks, banks quickly find RPA software, or tools that take a templated approach to automation, are not effective. Such tools only work with content that is highly structured, with no differentiation from one document to the next. 

Related Article: Why Robotic Process Automation Falls Short for Insurance Claims Processing

Lockbox automation: intelligence required

To effectively automate lockbox processing requires a tool with enough intelligence to be able to “read” the invoices and checks like a human would. It must be able to understand and extract unstructured and semi-structured data from invoices and checks, normalize the required data, and map it to a downstream processing system so payments can be reconciled. 

An intelligent process automation tool uses artificial intelligence technologies including machine learning and natural language processing to be able to identify the relevant elements to extract from each invoice and check. It then puts them into a structured format. 

Once the required data is in a structured format, then an RPA tool can be used to enter the data to a downstream processing system. That makes automated lockbox processing an example of a process where IPA complements RPA

Effective tools deliver big payoff

One of the keys to success with financial process automation projects (or any other vertical) is having a tool that’s accessible enough for business people to use, those who are on the front lines and understand the process inside and out. Indico’s IPA platform is one such tool. It’s based on a model that includes more than 500 million data points, enough to provide context to most any document. It’s a simple matter for business people to use the tool to label the various data points that need to be extracted. It takes maybe 200 documents to train the tool; after that you can expect extremely high accuracy and acceleration. 

The payoff is immediate. Financial services companies can accelerate cycle times by as much as 85% using IPA and increase the throughput of their teams by 4x, freeing up significant cycles to be spent on higher-value activities. 

To learn more about how Indico can help you automate lockbox processing, download this white paper from experts at the Everest Group, “Unstructured Data Process Automation.” And feel free to contact us if you have any questions or want to arrange a quick demo. 


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