A logical and proven sequence in business transformation

Many people reading this article won’t need to imagine the challenges facing global organizations. The new world is meeting the old world head on with visions of an fully automated, manual touch-free service model.

In most global organizations, the scale and complexity of operations creates obvious issues in terms of business and geo-diversities, technology adoption, infrastructure, change management, ethics, and cultural change in the people managing these tasks for many years.

A sequence and method to this madness is key to deriving maximum value from digital business operations.

Issues of scale, fragmentation, and change complexity

Many of our clients face these pressures. One of them, a global leader in wealth management, investment banking, and asset management, recently found several processes that are mission-critical for its traders, risk reporting, and the business as a whole were in need of attention. These processes cater to over 20 million securities – including equities, fixed income securities, and derivatives – and are sourced from a large number of data providers and consumed by over 500 business consumers in the bank.

A highly fragmented technology and operations landscape, changing regulatory pressures in different geographical jurisdictions, data quality and governance challenges, and most importantly the client’s operations and IT detachment from business laid bare the stark reality and provided an opportunity for the client to carry out a sense check across the board.

In an attempt to address some of these issues, the client had already introduced some robotic process automation (RPA) elements to its business functions, but these were piecemeal, tactical, and had been limited in their success. What was needed was a comprehensive operations’ transformation program with a more holistic approach.

ESOAR in action

The approach based on ESOAR that we described to our client was clearly applicable to the case, and the client saw the benefits of the linearity of ESOAR. Introducing robotics early on was suboptimal, as bots only really add value once processes have been cleaned up.

We leveraged ESOAR to assess the entire date operations function across investment banking and wealth management – including over 200 tasks and procedures – helping the client to better understand their operations. This assessment enabled us to identify 61 opportunities for ESOAR improvements, including eliminating redundancies, standardizing processes across business units, optimizing the allocation of tasks across the operating model, automating iterative tasks, and finally robotizing functions where human input adds no value.

As a result, we were able to pinpoint significant savings potential, reduce the risk of redundant processes, and improve the data quality in many aspects.

Eliminate
Elimination of manual interface monitoring, index updates, concurrent audit of manual instrument setups and amendments, temporary instruments amendments once process is automated or robotized, concurrent audit of data quality checks, and funds term sheets and prospects watermarking
ESOAR-Standardize
Standardization of manual entering of instrument setup and amendment request details, setup and pricing templates and the request channel
ESOAR-Optimize
Optimization of instrument setup request templates, setup and update of accurate report rules, the trace function for the creation of instruments, and the knowledge database to support queries resolution
ESOAR-Automate
Automation of non-term sheets instruments setups, BTS bonds setups, EQ setups, instruments temporary amendments processing and reversal, instruments setups and amendments, and municipal bonds, report generation, priority and agent assignment,
ESOAR-Robotize
Robotization of end-of-day pricing for improved accuracy and shorter turnaround time, and license cost reduction

Operations transformation

We implemented the plan for our client in two sequences:

  • In the first sequence, we identified processes for elimination, and acted on them within a month. This enabled us to tweak the operating model and optimize efficiency against higher and lower cost centers, thereby achieving quick wins and savings. Processes were then standardized wherever possible across the client’s business units, and the legacy technology on which they were operating was at the same time improved and in some cases automated or robotized. This entire process sequence is now largely complete
  • The second sequence is all about intelligent automation. A large team has been revisiting all the processes, looking for transformation opportunities of various kinds, including optical character recognition (OCR), supervised machine learning, unsupervised machine learning, cognitive processing, and pure RPA.

The tools we are using are Automation Anywhere for the basic RPA, and WorkFusion for the cognitive processing elements. We first conducted a proof of value (PoV) exercise on implementations in these areas and tackled the challenge of integrating these two tools simultaneously.

This PoV extended to a proof of concept (PoC) that was successfully delivered with machine learning and RPA combined for a complex term sheet process in the bank. We were recognized as the FIRST service provider to implement cognitive plus RPA in the bank with visibility at the CXO levels.

Building on this success, we have gauged the wider potential benefits that might be achieved in the next couple of years. In some geographies, cost efficiency improvements of 30–40% look possible, alongside other benefits, including reduced risk and improved quality.

Last, but equally important – implementation of ESOAR further highlighted the need for cultural change in the way our people considered and embraced automation. We have further initiated and accelerated an augmented workforce initiative to upskill our operations and IT staff to embellish the ESOAR model in order to embed a continuous ESOAR culture into our teams.

The outcomes

The work we’re conducting with our client is still in progress, but it’s already clear that the sequential application of ESOAR methods is achieving significant improvements. It’s also clear that the scope for implementation is both considerable and continuous. With operations on this scale, that is perhaps inevitable.

The implementation of our ESOAR methodology is set to contribute to a range of benefits, including:

  • 30–40% potential improvements in cost efficiency
  • Reduction of over 50 FTEs
  • Improved risk reduction and regulatory compliance through remediation of redundant processes
  • Improved data quality.

Preetham Kamesh is responsible for Capital Markets Business Services with a focus on integrated data management services (IDMS).

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