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RPA vs. API Integration: Which type of automation does your credit union need?

RPA vs. API Integration Which type of automation does your credit union need

RPA vs. API Integration: Which type of automation does your credit union need?

When Credit Union leaders consider automating their back office, they are often offered two options: Robotic Process Automation (RPA) or Application Program Interface (API) solutions. This blog will explain the difference and help credit union executives choose the right technology.

Credit unions across the country are looking for ways to streamline their processes and cut costs. One way your credit union can do this is by integrating RPA or API technology into their existing business processes. However, there are a lot of differences between each technology, and it's important to understand how RPA and APIs differ before deciding which type of automation is best for your credit union.

At first glance, Robotic Process Automation (RPA) and Application Programming Interface (API) Integration seems similar. Both involve software to help automate various business tasks. But at the core, they have different purposes.

If you are a key decision maker for implementing digital transformation solutions for your credit union, this article will help you understand what each is and know if you need RPA over API or vice versa for your credit union.

Then this blog is for you. Let's get started.

What is Robotic Process Automation (RPA)

What is Robotic Process Automation (RPA)?

Robotic Process Automation (RPA) is the technology that allows software to perform tasks normally completed by humans. RPA uses software robots that mimic human behavior to automate repetitive tasks performed by employees across different departments within a credit union. The software can be programmed to complete a range of different activities, including entering information into spreadsheets, changing file names, and updating databases – all without any human intervention whatsoever!

RPA can be thought of as a 'digital workforce' that automates routine processes to reduce costs and improve efficiency.

You might wonder: why would my credit union need RPA?

The answer is simple—automation is essential for any business that wants to cut costs, increase efficiency, and improve customer service.

RPA can help your credit union with these things:

  • Reduce employee turnover by eliminating repetitive tasks that are difficult for humans to do well.
  • Reduce the risk of human error with automated processes.
  • Improve customer service by providing faster response times and lower wait times for customers.
  • Automate manual processes within forgotten systems, such as outdated software or hardware, that no longer work properly or are no longer supported by IT departments.

RPA can be used to automate a variety of different processes across a credit union, including:

  • Compromised Account Management System Alerts
  • Reconciliation of Gap & Extended Warranty
  • Negative Balance Refund Processing
  • Dispute Card Transaction Alerts
  • Daily Wire Credit & Adjustment Processing
  • ATM Network Reconciliation

What is Application Programming Interface (API) Integration?  

Application Programming Interface (API) integration is a type of automation that allows your credit union to integrate with third-party applications. An API is a set of instructions that tell the application what to do and how to do it. 

API integration is the process of taking data from one system and importing it into another. It's a way to automate repetitive tasks and make sure your credit union is able to share information with other organizations in real-time without having to enter it manually  

Where would my credit union need API integration?  

Your credit union may benefit from API integration if you want to connect your core banking system with other software applications, such as accounting software, or if you want to integrate with third-party applications. This can help streamline processes and increase efficiency. 

API integration can help your credit union with these things: 

  • Connecting with third-party software or services over the internet 
  • Automating repetitive tasks across multiple systems (for example: if you have multiple systems that need to interact with each other) 
  • Increase efficiency by sharing data across multiple systems 
  • Enable collaboration between departments or agencies 
  • Solve problems quickly 

APIs can be used to automate a variety of different processes across a credit union, including: 

  • Customer onboarding and account management 
  • Loan origination and servicing 
  • Deposit processing, including account opening and closing  
  • Account aggregation and reporting 
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When to use RPA automation and when to use API automation?

When to use RPA automation and when to use API automation

RPA (robot process automation) and API (application programming interface) are two of the most common types of automation used in the financial services industry. But what exactly is the difference between them, and which one should you choose for your credit union? 

Where RPA works well: It can automate any task that a human being can perform faster and more accurately than a human could. In addition, its ability to repeat workflows makes it ideal for performing routine tasks that don't require human judgment or creativity. Its access to third-party applications makes it an excellent choice for integrating disparate systems. 

Where APIs work well: It allows you to connect applications without having to rewrite code or change how they work. This can be especially useful if your application doesn't have an open API available or if there's no documentation available for how it works internally. You can also use APIs to integrate new applications into your existing workflow without worrying about introducing errors into your system or changing how things work. 

When to use RPA or API for automation: If you want something done quickly and accurately with little human intervention, then RPA is your best bet. It excels at processing large amounts of data 

Anywhere you have a process involving many manual steps or multiple systems working together, you can benefit from implementing an API integration. For example, if your credit union has different departments with different databases, then you might want to develop a way for them to communicate with each other over the network. One way would be by creating a user interface (UI) or application programming interface (API). 

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RPA vs. API Integration: Key Differences

There are a number of key parameters that you can use to help decide which automation tool is right for your credit union. Let's take a look at them below:

Key Parameters 

RPA 

API Integration 

Usage 
  • Mostly used in legacy systems.  
  • Works on the front end of a company process. 
  • Deployed on the back end of a company process.  
  • It interfaces with all third-party software with individual data input. 

 

Advantages 
  • Performs well with legacy systems 
  • Easy to provide business requirements as all processes are well defined and already institutionalized 
  • It can be used by non-technical staff at your credit union, reducing training time and increasing productivity. 

 

  • APIs are fast and can be reused for multiple purposes 
  • Easy to build API connectors that integrate with any third-party applications 
  • Works well with complex problems 

 

Disadvantages 
  • Not suitable for complex automation. 
  • Its own programming capabilities limit it. 
  • It doesn't handle unstructured data well. 
  • It has difficulty handling exceptions and errors without needing human intervention. 
  • Setup is complex. 
  • It can be difficult to ensure that data is being transferred correctly. 
  • You need developers on staff or access to a developer via an API management platform. 
  • There is a high risk of human error during setup. 
Implementation Complexity  Low  High 
Solution Scalability   Low  High 
Time to Market   Low  High 
Cost  Low  Medium to high 
Learning Curve   Low  High 
Maintenance   Medium to high  Medium 
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RPA vs. APIs: Is one better than the other?  

Both RPA and APIs are beneficial in overcoming the challenges of integration and data sharing. At the end of the day, your credit union needs to decide on the type of automation that is more beneficial to its particular needs. 

It's important to note, however, that automation alone is not a silver bullet for increasing your credit union's efficiency. After all, leveraging an RPA or an API requires heavy up-front development on your part. You'll want to assess other areas of your processes to determine how these technologies might play a role in eliminating waste and increasing productivity in each area.  

While it makes sense to start with an RPA if you're just looking to start with your automation journey to solve long-term issues with process efficiency. But if you are a mature credit union, there are other technology considerations depending on your individual IT setup and business needs. 

We are a credit union technology partner that can help you to achieve your goals through digital transformation solutions that empower you to create a better member experience and report data in an easy-to-understand dashboard. Talk to us and resolve your credit union challenges today.   

Janaha

Janaha Vivek

I write about fintech, data, and everything around it | Assistant Marketing Manager @ Zuci Systems.