Reimagining core operational processes for capital market firms: Part II

In this first part of this article, we highlighted practical steps to implement intelligent automation using reimagined end-to-end core processes. We also answered key questions that must be considered before embarking on this initiative. In part two of this blog, we illustrate this approach through use-cases based on our work with our clients.

The operational excellence context

Reimagining core processes that rely on internal structured/ unstructured data and apply intelligent automation levers address a key imperative of the current business environment. Many of our clients refer to it as achieving operational excellence

By leveraging data and insights generated by applying tools such as AI, ML, and NLP a firm can continuously improve its operations. Exhibit 3 outlines the benefits that capital market firms can achieve through such initiatives.

Because of the limited understanding of these automation tools, often the first step is to decide which tools are applicable when reimagining a process. This is greatly simplified by applying a ‘Lego block’ approach. This is a construct to conceptually break down complex processes into logical sub-processes where an AI technique can be utilized to automate the subprocess. This approach divides large processes into amenable process blocks. We have created a catalog of Lego blocks for processes for capital markets categorized by type of firm, LOB, and functional area.

Use Case#1: KYC Workflow

Reimagining a complex workflow at a large wealth management firm

Client Business Process: Know your customer (KYC) during client account opening/ credit application

Pain Points: Manual entry and verification of various client documents resulted in:

• Low accuracy of processing
• High turnaround time
• High operating cost
• Sub-optimal customer and employee experience

Objective: Automate the KYC verification process resulting in operational efficiency and reduced risk.

Approach:

• Design-thinking led workshops with SMEs to understand and document the KYC document ingestion flow.
• Detailed flows creation and data capture for each step of the process
• Identification of appropriate Lego blocks for conducting a proof of concept

Proof of Concept (POC): An intelligent automation platform that supported OCR and machine learning (ML) based document ingestion, classification and extraction of information, and rules-based validation

Implementation and Outcome: With the success of the POC, a platform was rolled out at the enterprise level resulting in significant gains such as:

• Streamlining of KYC processing
• Reduction in turnaround time (TAT),
  • ~60% – 75% improvement in STP (straight-through processing)
  • ~20% – 30% reduction in manual processing
• Fewer human touchpoints resulting in a superior employee and customer experience

The need of the hour: A disciplined and structured approach

The ongoing COVID-19 situation has made it important for capital market firms to run a tight ship. We expect that automation will further accelerate the streamlining of complex manual core processes in response to the economic impacts of the pandemic.

At the same time, scaling up efforts to reimagine and automate processes requires a planned and disciplined approach utilizing the right talent. Many industry players suffer from talent deficits and have lost momentum from prior efforts that did not scale up as expected.

With the careful application of the approach described in this blog, capital market firms are sure to witness considerable success with their automation initiatives as we emerge out of the current economic scenario.

Want to learn more? Contact us for a quick consultation.