5 insights on how robotics can drive financial services compliance modernisation - Banking blog

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RPA (Robotic Process Automation) has been implemented widely across financial services institutions to help drive efficiency and effectiveness. As these institutions consider other operations or functions that could benefit from RPA (Robotic Process Automation), compliance stands out as a strong candidate, particularly the area of monitoring and testing.

By understanding the opportunities for compliance automation, taking important preparatory steps, and addressing key implementation considerations, including performing appropriate cost/benefit analyses, financial services institutions can be better prepared to tap into RPA’s potential. Here are five insights on how RPA can enable compliance modernisation in financial services.

1. RPA can contribute to more effective and efficient compliance processes

Several aspects of compliance oversight operations can be enhanced through RPA implementation. Monitoring and testing is an especially promising automation candidate. RPA’s capability to pull and aggregate data from multiple sources could also enhance the efficiency of regulatory, non-financial, and risk reporting as it can help eliminate or reduce the time-consuming processes of collecting, compiling, and cleansing, and summarizing large amounts of information.

2. Monitoring and testing highlights RPA’s compliance potential

Monitoring and testing provides a powerful example of RPA’s potential to transform compliance operations. A large financial services institution can be responsible for executing thousands of tests annually with varying execution frequencies, completion times, and sample sizes. Each test requires planning (inclusive of sampling), document/ evidence gathering, test execution, and reporting.

Applying RPA to repetitive, manually intensive monitoring and testing activities allows institutions to refocus employee activities on higher value areas such as high complexity, judgement-based monitoring and testing activities, quality assurance reviews of results, and root-cause analysis of exceptions.

3. RPA readiness can enhance and accelerate implementation

For many financial services institutions, enhancements to their existing governance infrastructure is likely to be required prior to the automation of compliance monitoring and testing. Key infrastructure components needed to effectively operationalise RPA include:

  • Enhanced governance, including management routines, clearly delineated roles and responsibilities, and revised policies and procedures
  • Issue management, risk management, and reporting, with standardized issue reports populated by bots and validated by humans, including a clearly defined feedback loop and escalation process for reporting issues experienced during automation
  • Change management, with defined management routines for identifying, maintaining, and approving test and related automation changes
  • Skillset development and training, including ongoing capability assessments and roles-based training

4. Three challenges to consider before implementation

Many questions remain to be answered regarding the technical implementation of RPA. While the use of workflow and decisioning technologies has grown over the years, new challenges are arising.

One emerging concern is what happens when there are dependencies among automated activities, such as activities performed by bot 1 that trigger those performed by bot 2? In some instances, implementations are requiring more resources and time than expected, especially in large institutions.

Second, who will own RPA implementation is another important consideration. Depending on the financial services institution, an automation initiative may live in the information technology (IT) department or the group that owns the process being automated. Regardless of who technically owns the effort, the success of RPA implementation will hinge on seamless integration between IT and the business function, and the consistent involvement of those two groups.

Finally, once RPA is implemented, ongoing bot management will require clear definition of how issues will be handled to achieve timely, effective resolution. Also, a defined set of performance metrics, such as key performance indicators (KPIs), is critical for measuring the ongoing effectiveness and efficiency of RPA.

5. RPA is just the beginning

While RPA is demonstrating its capacity to improve process effectiveness and efficiency, expand capacity, boost quality and consistency of outcomes, enable greater scope of coverage, and potentially reduce costs, it’s also a harbinger of more to come. Breakthroughs are occurring in cognitive automation, artificial intelligence, and other tools which promise to automate ever-more judgment-based, complicated tasks.

Our take: RPA done right can be a valuable tool

Two considerations are worth keeping in mind in exploring RPA’s potential use in compliance. First, it is not a panacea; however, it can be a highly effective tool for enhancing process efficiency, and it is gaining wide acceptance in financial services institutions.

Second, it’s impractical and unwise to try and automate everything; institutions will want to perform a cost-benefit analysis to determine whether undertaking an RPA effort makes business sense. Other levers, such as people and process initiatives, can also deliver big returns.

Finally, it can be helpful to remember new tools and techniques are emerging constantly that may provide previously unimagined opportunities. While something may be impossible today, who’s to say it will still be tomorrow?

This content was first published on the Deloitte US webpage with its original authors listed in the Compliance Modernization: Focus on 5: Robotics Process Automation report.

Antonio Russo

Antonio Russo - Partner, Service Delivery Transformation, Zurich

Antonio heads Deloitte’s Service Delivery Transformation in Switzerland. He has over 15 years of experience advising companies across various industries in Shared Services, Business Process Outsourcing, and Global Business Services and has delivered various large transformation projects.

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Comments

  • We fully agree with you : Robotic Process Automation is a very helpful tool to enhance compliance, and not only in financial services!

    Posted by: on November 3, 2017 at 14:42

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