THE CAPCO TOOLKIT
The reality of Brexit means that most banks will have to migrate a significant number of customers to new or existing EU entities in a very short period. Robotic process automation (RPA) is one solution that could help.
WHAT DOES CLIENT MIGRATION INVOLVE?
Client migration can be broken down into four core stages, with each one presenting multiple challenges, where the common denominator is manual processing across multiple applications:
The first step is to identify the client population that is in scope for migration. A single client’s data can be held across multiple systems, each aligned to business or product lines. The ability to identify duplicate client entries and dormant clients will be key in ensuring that the correct set of clients is migrated.
CUSTOMER DUE DILIGENCE:
Client data could be maintained through siloed processes, the information held on some systems may be outdated or contradictory to other sources. Data cleansing, validation of records and engaging with clients to fill in the gaps, and thus satisfy the Know Your Customer (KYC) requirements in the new location, are key steps that need to take place.
RESTRICTING TRADE FROM CURRENT ENTITY:
Restrictions need to be in place, so that no new orders, settlements or collateral postings can be processed for the migrating client in the old entity. All systems must be checked to ensure clients have no outstanding positions before the accounts are closed. Furthermore, the process needs to be seamless and aligned with the opening of the new account to minimize any disruption for the client.
ONBOARD CLIENT TO NEW ENTITY & MIGRATE DATA:
Client onboarding involves opening a new client account, exchanging settlements instructions and account number with the client, populating client data across static data systems and making it available across the front to back infrastructure of all products that the customer will be trading. Despite the very repetitive and simple nature of the tasks (not requiring any decision-making), in most banks the onboarding process is still highly manual, involving multiple hand-offs across different product and static teams.
WHAT CAN AUTOMATION DO?Multiple use-cases present advantageous conditions for automation. However, the full range of benefits can be attained when the tasks performed have a repetitive and rule-based nature for a high volume of cases in multiple applications. Client migration is an ideal candidate for RPA implementation as it not only streamlines Brexit delivery, but also replaces BAU processes going forwards.
Here’s how RPA can be applied in client migration:
- Analyse data to identify the client population based on pre-defined parameters across multiple systems and prioritization can occur with automation technologies, determining the order of migration according to the bank’s preferred criteria.
- Allow automation of KYC collection and enable predictive AML risk scoring models.
- Automate positions checks and account closure. For example, we have supported a client with a mandate to offboard 25,000+ clients. Previously position checks were conducted manually across 22 systems. With the introduction of RPA, the bank can now complete 4,500 cases daily with just 25 percent robot utilization across just three systems in production. This means saving four weeks’ work of manual work every day.
- Automate account setup and population of data across multiple systems, for example using scripting.
WHAT ARE THE BENEFITS?
- Time and cost savings: RPA simplifies operations and minimizes human dependency, in turn improving efficient and driving down cost
- Improved transparency: When regulators’ eyes are on Brexit plans, RPA can bring improved audit trail and transparency. With system-based reporting for each step, automation enables superior levels of information gathering.
- Simple implementation: Fast and easy to implement, with no changes required to existing IT infrastructure
- Improved client experience: During an onboarding process, a client is contacted on average 10 times. Considering the commercial sensitivity around Brexit, RPA offers higher efficiency and improved customer experience: fewer errors lead to a more straight-through process and the ability to fully re-use existing data limiting client interaction.
RPA increases process efficiency, reduces risk and provides more control. Client migration is an ideal use-case within the Brexit context, but not the only one. RPA can be also applied to account reconciliation, report generation across systems, fraud detection and many other.
We have expertise in taking RPA from a concept level to a state of organisational maturity for our clients. We are also proud to have established a partnership with Blue Prism who are the pioneers and current leaders in the RPA space.
For more information about how we can help UK and EU-based clearing businesses in the run up to Brexit, please get in touch:
RACHAEL ZUKERMAN, PARTNER