Managing Risk More

Effectively Through
Intelligent Automation
blueprism.com
Aligning Operations to
Risk and Compliance
Strategy
Risk and compliance teams within financial services institutions are responsible for ensuring
that organizations balance the need for change and growth against the risks of failing to
meet the demands of regulators and stakeholders. They face multiple challenges, not
least from an uncertain geo-political environment and the post-pandemic recovery.

As well as coping with unpredictable market forces, banks are in the midst of
implementing significant changes to their operating models as they adapt to
evolving customer expectations and competition from big techs and fintechs.

It means financial institutions need to launch more relevant products

and services, but to do so within ever more complex regulatory
regimes. There’s a need for agility and speed on one hand, but the
requirement to achieve change without introducing operational or
financial risk on the other.

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 Dealing with
growing workloads
According to research undertaken by SS&C Blue Prism and the International Compliance
Association (ICA)1 with professionals across the world, the vast majority (86%) of teams need to
deal with bigger workloads than they did even two years ago.

And it’s not just volumes of work that are increasing, but there’s also a lack of clarity about
what is coming down the track in the near future. Risk and compliance teams need to
react quickly when new sanctions against companies and individuals are introduced
overnight, as happened during the Russia/Ukraine conflict.

But they also need to be prepared for new areas of regulation, whether that
relates to emerging instruments such as cryptocurrencies or the growing area
of compliance with environmental, social and governance (ESG) guidelines.

1 Online research with 254 professionals across the world undertaken by the International Compliance
Association in March/April 2022.

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Using
technology
to manage risk
and compliance
While the combination of factors currently faced by risk and compliance
teams is unprecedented, the range of tasks they need to complete day-to-
day involve similar processes: sourcing, organizing, and checking data, making
accurate decisions on the basis of that data, and ensuring that the business is
updated with reports, and also protected from regulatory transgressions.

What has changed is the way in which those processes are powered with modern
technologies, notably intelligent automation, which uses software known as digital
workers to undertake time-consuming data sourcing, checking, and reporting tasks.
Human workers then have the space and time to focus on the interpretation of the data
and to liaise more effectively with other departments to ensure necessary steps are taken.

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 Banks are already using intelligent automation to improve
the speed and accuracy of processes such as know your
customer (KYC) and anti-money laundering (AML) checks.

Automated processes can run 24/7, do not make rekeying errors,

and make light work of tasks that not only take much longer
when managed by humans, but also free up risk and compliance
professionals’ time for higher value contributions to the business.

Crucially, intelligent automation provides full keystroke-level auditability,

which means risk and compliance teams within banks can automatically
report when and where an action was completed, and a decision made.

The good news is that intelligent automation is available today and can work
with feeds from core banking systems without having to wait for wholesale IT
transformation. As can be seen from the six real-life use cases outlined below, digital
workers can access data sources just as humans do, but much faster and without errors.

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 Bridging the disconnect
However, as our research finds, there is something of a disconnect between the growing workloads
faced by risk and compliance teams and the adoption of technology that will not just make their
lives easier, but that will also help banks deal with the higher volumes, unpredictability, and
complexity of regulation.

When asked how their organizations had responded to higher resource requirements, a
third (33%) said they had hired more people while almost the same proportion (29%) had
increased individual workloads, undoubtably placing more stress on existing teams.

Only 21% of those reporting higher resource requirements have addressed the
challenge through increased investment in technology. Where organisations are
increasing headcount alone, this suggests that they are simply continuing to
apply existing systems and controls, albeit in greater volume.

Not only does this disconnect run the risk of acting as a brake on banks’
efforts to change and adapt to new market conditions, but it also
makes it more difficult to attract risk and compliance professionals
who want to work with modern toolsets and technologies.

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If all banks are doing is to hire additional skilled professions to fill in more spreadsheets, then
they are unlikely to be using those people on the front line to fight financial crime in the most
effective way. Inundating them with admin means they do not have the bandwidth to use their
knowledge and training to develop better processes and look for patterns of fraudulent use.

The way forward will be for risk and compliance teams to find examples of how banks are
already automating basic processes such as KYC and AML checks, then communicate the
benefits of digital workers to senior decision makers. These include:

Automating and speeding up manual or repetitive jobs

Freeing up time to upskill the workforce

Creating more engaged employees

Building a clear audit trail for tasks and decisions

Improving the accuracy of checks and reporting

Accelerating response times by the risk and compliance team

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 The way forward
Whatever the future holds for the financial services industry, it’s clear that there’s a need to bridge
the current knowledge gap and equip banks’ compliance teams with the automation tools they
need to be as prepared as they possibly can be for the way ahead.

Investment at the front line in automation, means banks free up budget and people’s time
to focus on what really matters – better risk management. With space and time, people
and teams can develop more effective ways of meeting regulatory requirements.

At the same time, better admin processes mean less burden on customers and
reduces the risk of them dropping out during the product application process.
And with a reduced admin burden operational teams can respond in a more
planned and considered way to regulatory change, which means that
strategy and operational teams align better.

There is little doubt that both change and unpredictability in the

banking sector are here to stay, and that the current approach to
either increase the workload for risk and compliance teams, or
continue hiring more people, in the era of what has been called
“The Great Resignation” is unsustainable.

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Intelligent automation
in action: six use cases
1. African bank meets critical compliance deadline
A large African bank had inadequate data on high-risk clients and lacked the ability
to quickly review their accounts. Customer information was stored in multiple, non-
integrated banking systems hosting different product lines.

When the country’s central bank wanted to check up on anti-money laundering

(AML) arrangements, it gave the local bank two months to conduct a detailed
review of more than 24,000 customer accounts. Each manual review of an
account took three hours, which meant that the bank would need to hire
an additional 375 people to complete the review in time. If it missed the
deadline, it would face a significant fine.

Using an SS&C Blue Prism digital workforce, the bank built a

portfolio of evidence for each client using information sourced
across all product lines and systems, significantly increasing
efficiency and speed. Bank employees were freed to spend
their time analyzing the data gathered and improving
output quality. The bank met the deadline for account
analysis and reporting and avoided a financial penalty.

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 2. Global bank investigates anti-money laundering alerts
At one global bank, more than 650 million transactions are regularly reviewed across
200 million accounts for evidence of money laundering and financial crimes. A
team of 250 people were required to look though multiple systems to gather
data on potential fraud, and to decide whether alerts were false positives
(which made up 90% of flagged transactions) or actual crimes.

The bank employed digital workers from SS&C Blue Prism to check
payment alerts from the anti-money laundering (AML) system against
multiple data sources, including credit histories, sender names
and addresses. Digital workers also perform internet searches to
check whether an individual or company has been involved in
fraudulent or criminal activities.

The system creates a full audit trail of decisions made

about financial transactions so that the bank can
respond quickly to regulators if necessary. The number
of transactions flagged has been reduced by 65%
and more than 200,000 hours have been given
back to the business for higher value work.

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3. Middle Eastern bank reduces fraud with
fully automated account profiling
This large Middle Eastern bank, along with others in the region, had seen
a steady rise in identity theft and other fraudulent incidents. It was already
using digital workers for admin heavy processes and decided to set them to
work on anti-fraud activities.

Digital workers were trained to understand the context of a transaction before

determining whether it was fraudulent. They now use analytical capabilities to
understand the unique transaction requirements that every customer makes, then use
machine learning and analysis to match a set of rules against each customer transaction
risk profile, accounting for product, legal, jurisdiction and local regulatory requirements.

The bank has achieved a 70% reduction in fraud cases and monitors 15,000 bank transactions
every day, 24/7. Digital workers have delivered greater operational efficiency, higher accuracy and
a significant reduction in processing time when checking customer transactions.

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 4. British bank automates fraud
handling, saving time and limiting
customer risk
When customers call into this UK bank, an advisor collects basic
information and records a list of suspected fraudulent transactions.
Payment service regulations mandate that if a customer reports
fraudulent transaction on a debit card before 2.30 pm, the bank must have
the money back in their accounts by the end of the same day. With 6,000 to
7,000 transactions reported each month, it was almost impossible for staff to
meet the deadline.

The bank brought in digital workers to investigate fraudulent transactions, accessing

three different mainframe systems, and handling the process from end-to-end,
including reporting fraud to teams within the bank and generating customer letters.

Customers can rest assured that any fraudulent transactions will be managed quickly and
effectively, minimizing the impact on their accounts. The bank has not only improved customer
service levels but is assured of compliance with government regulations.

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5. Regional bank manages bounced customer payments
more fairly and consistently
Customer advisors in this regional bank received a list of transactions every morning
from the previous day that were rejected or due to be rejected due to insufficient
funds being held in an account. The customer advisor would review each
individual case and decide whether to pay it, pay it and charge the customer,
or bounce the transaction completely.

Business rules were in place, but there were unique judgements applied
to each decision, resulting in an inconsistent approach.

Now digital workers review the queue of insufficient funds and

apply business rules consistently for each customer, removing
human judgement and ensuring fairness. They complete the
process before customer advisors start work in the morning,
which means employees have all the information they need
and can focus on more value-added work.

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 6. European bank keeps customers happy during
onboarding process
A European bank knew it needed to provide a faster and easier onboarding
process to provide a higher level of customer service, as well as improve
regulatory compliance and reduce fraud. It also wanted to improve cost
efficiencies and employee satisfaction by eliminating manual and
repetitive tasks.

Overall, it needed to reduce the number of customers lost because

of an inefficient onboarding process for personal account
opening, mortgages, credit cards, overdrafts, loans, student
accounts and business products.

Today, digital workers handle the customer onboarding

process automatically. When a customer applies for
an account or product, digital workers collect and
verify the customer’s identity. Using the bank’s
KYC services, digital workers authenticate the
customer, screen them against watch lists
and update the application record. As a
result, 75% of the onboarding team have
been redeployed to higher value tasks
and customers enjoy a seamless
onboarding experience.

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About SS&C Blue Prism
SS&C Blue Prism intelligent automation
redefines the way work is done. Some 20,000
financial services and healthcare organisations,
from the world’s largest companies to small-
and mid-market firms, rely on SS&C Blue Prism
for expertise, scale and technology.

To learn more visit blueprism.com and follow

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