Robotic Process Automation (RPA) for Investment Managers

Robotic Process Automation for Investment Managers RPA

Resorting to Robots: Robotic Process Automation for Investment Managers

The robotic process automation (RPA) market is slated to expand by 3,400% over the medium-term, exploding from $200m in 2017 to $7bn by 2025, and IT research firm Gartner estimates that 70% of financial companies are already using or piloting RPA. Given this outlook, CBXmarket hosted the “Resorting to Robots” webinar last month and explored strategies for implementing and capitalizing on RPA in investment management spaces. Featuring Bonnie Dallum, the CEO of RPA Officer, in conversation with CBXmarket’s VP of Strategy and Marketing John Mizzi, the pair discussed the impact that automation can have on asset managers’ workflows. Check out the main takeaways below.

RPA complements human capital. It’s not a replacement.

A common misconception is that RPA will reduce costs by eliminating employees, but that paints an inaccurate picture, said Dallum. While companies can achieve up to 50% in savings by utilizing automation, RPA doesn’t replace current systems of operation. Instead, it works as an “add-on” to the current state, sitting on top of a firm’s existing technology stack to streamline procedures. One of the core benefits of RPA is employee satisfaction, since bots reduce mundane work and allow human capital to focus on more challenging tasks and direct their efforts towards alpha-generating activities.

Automation yields the highest returns when implemented to facilitate tasks that are low in complexity yet high in volume and frequently repeated. For example, reading documents, responding to client communications and receiving invoices can all be accomplished with RPA. The ability to enable front-, middle- and back-office functions enables businesses to achieve another benefit: scalability. With RPA, investment teams can scale processes in the future and continuously customize bots to fit their evolving needs, said Dallum.

RPA can aid asset managers in three key areas.

Asset management teams can utilize bots to benefit three specific areas—trade processing, reconciliation and fund administration. By taking advantage of RPA, investors reliably increase compliance. According to Dallum, “Compliance is one of the biggest benefits that managers can reap from implementing RPA—whenever you automate a specific control or process, compliance improves.”

During the trade processing phase of a workflow, RPA can be used to match trade orders and verify transaction details. It also slashes processing times by removing the need to manually upload data files. Additionally, teams can use automation to create and send alerts to handle exception reporting.

The reconciliation process currently involves redundant and disparate recordkeeping systems, expending human capital to confirm information and requiring a physical presence to update books. RPA can alleviate backed up queues by automatically retrieving and comparing records while minimizing human error. Bots can facilitate the hand-off of data across systems and ensure money has been transferred into and out of certain accounts.

For fund admin roles, functions include consuming and repackaging data, and RPA can streamline these tasks as well. Deploying bots can automatically validate rules-based accounting methods and reduce overhead for management teams. RPA can aggregate data on a regular basis and be triggered to massage, download and distribute data files from the moment that order information is received in the trade management systems, according to Dallum.

Successful deployment requires a company-wide effort.

Achieving successful implementation will require an organization’s front-, middle- and back-office teams to be in sync. Investment teams who want to capitalize on RPA’s benefits will need to champion the technology to executives and employees. Dallum recommends that managers create a strategy to communicate the payoffs that automation can yield and to develop an objective method for self-analysis. This way, teams can effectively identify and prioritize what functions to automate and which tech is best-suited to the company. RPA is more than a “quick win,” and asset managers will need to build a lasting framework that assesses the risks and opportunities if they want to achieve a long-term impact for their investment teams.

Want to learn more?

Watch our webinar on RPA – presented in conjunction with RPA Officer.

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