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Banks’ Risk function professionals claim their processes need digitization. In this series of posts, we will share insights on using digital, starting with Robotics, to add value to the Risk function.
“I used to spend one hour per credit application, a third of which was spent on inputting credit application details on the workflow. When I was under pressure to provide credit approval or rejection within 48 hours I just could not stand the workflow latency!” Which credit analyst has not complained about time wasted on entering duplicate information in systems, producing dashboards, or having ratings validated?
Risk functions face the challenge of rotating their data production tasks towards data intelligence and risk anticipation. Robotic Process Automation (RPA) can help them do this by improving operational efficiency, and is a first step in a Risk function’s digital transformation.
RPA is a technology that automates human interactions across applications and office software, provided the data is standardized and structured. It is an especially valuable tool for tasks that are repetitive and rule-based. The leading RPA providers are Blue Prism, UI Path and Automation Anywhere.
What are typical RPA use cases and their benefits for Risk functions? Use cases are highly dependent on baseline process criteria such as tool stability, legacy systems, input structure, standardization and frequency. Some typical use cases across the industry include:
Credit analysts copy credit proposal details into Risk systems or workflow. This process can be time consuming and subject to latency, and credit analysts frequently view these data collection actions as not adding value.
RPA can process the workflow from a credit proposal completeness check, to a credit approval submission to validators, to the circulation of a decision and finally to document and decision archiving.
EXCESS AND LIMIT MONITORING
RPA can collect and aggregate counterparty positions to provide frequent updates, daily if need be. Update frequency can be improved to a pace not met in the baseline situation (mainly due to Risk officers’ limited bandwidth), meaning that RPA can also provide qualitative benefits such as better monitoring without increasing workload.
Where reporting is Excel-driven, RPA helps collect input from Risk applications or SharePoint repositories, fills Excel templates and generates PowerPoint presentations that include graphs and tables. This automation allows Risk officers to concentrate on analyzing data and providing comments in the PowerPoint presentation. When non value-added tasks, such as data collection and formatting, are transferred to RPA, working capacity is released for core Risk function activities. Natural Language Generation is the next digital move on Reporting activities, helping generate comments after figures are updated.
RPA can collect contributors’ standardized input via email or SharePoint, and check for consistency and completeness. According to set rules (cell content or format), contributors can even be prompted for their input.
Instead of collecting input, risk officers can focus on remediation. In this case, RPA not only releases capacity for more added-value tasks but also limits the operational risk of missing entries during consolidation.
Broadly, benefits expected from RPA are both quantitative and qualitative.
Quantitative benefits should be put in perspective with the underlying baseline of processes—Risk functions are not operated by large back offices and the median workload of underlying RPA-eligible processes is below 50 man-days. How may RPA projects have a positive payoff then? RPA at scale maximizes benefits for three main reasons:
- It helps replicate RPA software bricks across use cases operated through common applications, which mutualizes development costs across many RPA opportunities.
- It helps centralize processes operated in various locations, which increases the benefits of a given RPA use case.
- It instills a continuous improvement approach to process simplification and standardization, combining RPA savings with process improvement savings.
Qualitative benefits are complementary to quantitative benefits and come in various forms, including:
- Operational risk avoidance. RPA operates steady and consistent routines.
- Steering Risk staff towards value-added tasks. Removing non added-value tasks helps manage peak periods and helps to maintain working hours within appropriate limits during peak seasons.
- Agile monitoring. RPA improves frequency at a marginal minimum cost.
Going back to the credit analyst’s quote at the beginning of this blog entry, with the addition of RPA, she now spends a mere 40 minutes per credit application, with RPA saving 33% of her workload on this activity. Let’s spread the message!
Accenture has a strong track record of RPA projects across Risk functions and has developed RPA assets including an RPA platform and a methodology addressing RPA 360-degree needs—from RPA eligibility assessment, to operating an RPA Center of Excellence, to process reengineering with RPA and business case development. The latest asset we have added is the Intelligent Automation Diagnostic online platform (IAD), which enables our clients to assess process eligibility for RPA and the benchmark benefits they can expect. For our clients, using IAD means a lightened consulting team, a shorter assessment (divide the assessment period by 3) and a benchmark facility.