The Digital Workforce Re-defining Capital Markets Operations

Transcription

1 The Digital Workforce Re-defining Capital Markets Operations

2 Table of Contents 1 Digital Workforce Digital Workforce The Context Digital Workforce State of Practice 3 2 The Opportunity for Capital Markets Firms The Potential in Capital Markets The Business Case for a Digital Workforce Look Beyond Cost Optimization Impressive Results through Automation! Some Use Cases 5 3 Realizing the Opportunity Hexaware s Approach and Enablers 5

3 1 Digital Workforce 1.1 Digital Workforce The Context Global Banking and Capital Market firms are re-inventing processes and operating models to stay relevant in the digital future; where customers, employees and partners are expected to be connected in real-time, where transactions are expected to typically be straight through; reconciliation and settlement type activities will be history! And millions of dollars are being poured into enterprise-wide digital transformation initiatives, be it re-writing customer facing applications, implementing BPM, implementing composable enterprise architecture, investing in analytics and big data, digitization of business processes, and an endless list of similar initiatives. However, firms are far from achieving Digital nirvana; reaching there could be a 5-7-year journey (provided the destination remains constant. with the rapid advances in technology, and rapidly evolving views on what it means to be digital, the goalpost will keep shifting!) Meanwhile, armies of people spread across captive shared services centers, third party BPOs, and distributed operations teams in various lines of business, will continue to spend a significant amount of time and effort on routine, repetitive tasks; This translates to high run the business costs, but also takes the capacity away from contributing to efforts towards Digital transformation. The Promise of the Digital Workforce: Non-invasive automation technologies like robotic process automation and machine learning promises to quickly configure robots that can mimic human tasks, without the need of heavy integration effort of digital transformation approaches, at a fraction of the cost. We can call these robots as virtual Full Time Employees(FTEs) that are a part of the workforce (in the sense that they represent available work execution capacity) that is rapidly scalable, less error prone than humans, have zero fatigue and present a good near term solution for optimizing Operations, even as true digital transformation initiatives wait to fructify. The impact of the Digital workforce and what this means for operations performance, customer experience, future state operating models, operations staff, and operations leadership is probably the most important conversation in the hallways of global firms. Several Banks and Capital Markets firms have started their journey towards establishing a Digital workforce, but the examples of successful, scalable deployments adding measurable business value are few and far between. 1.2 Digital Workforce State of Practice While a Digital Workforce holds immense promise, this is yet to be realized. Organizations globally are in the various stages of their automation journey; and it is difficult to separate the noise from reality, given the significant amount of publicity around automation by various players in the automation space be it tool vendors, consultants or service providers. Publicly available information on successful automation use cases, and information on effective approaches to undertake the journey is scattered and difficult to make sense of. A recently published research by Horses for Sources (HfS), which was sponsored by Hexaware, was undertaken as a survey of senior stakeholders across industries globally, to get at the real state of the automation practice. Some extracts from this survey by HfS are reproduced below, that shed light on the key drivers and state of practice when it comes to automation execution and creation of a digital workforce: The key driver for organizations in re-defining their operations, is to drive down cost Investing in AI technologies, in process automation and robotics are mission critical or increasingly important to more than 81% and 82% respondents

4 Organizations are also considering a range of technologies that make up the Digital Workforce continuum. Organizations are actively evaluating or are already piloting Digital Workforce So clearly there is a significant momentum being generated around these disruptive technologies and the promise of the Digital Workforce is beginning to come to the forefront of discussions in several global enterprises. 2 The Opportunity for Capital Markets Firms 2.1 The Potential in Capital Markets Several firms in the Capital Markets industry are actively exploring the shift to Digital Workforce. While other industries are also keen to catch-up, Capital Market entities are ahead in evaluating opportunities and in establishing the beginnings of scalable automation programs, with some examples of at scale implementations. A unique feature of the Capital Markets space is the varied customer base and customer profile. This makes it inevitable for organizations to carve out a niche for themselves yet offer multiple commoditized products. The workforce in the industry is also spread across a wide spectrum of skill and competency. An Investment Bank, for example, may offer high-end Research and Advisory services but may also help clients with their need for Reference Data & Reporting. RPA and other automation techniques like AI, Blockchain, NPL have helped Banks to cater to their customers efficiently and faster. Use of innovative tools have helped companies improve their efficiencies across most of the functions, irrespective of the complexity and decision making involved. A high-level view on automation potential across different functions is depicted in the continuum below:

5 Benefits of automation depend on multiple parameters including current levels of automation, discrete offerings in the space, nature and variability of the source or input, volume etc. Impact of automation in a function like Client & Regulatory Reporting, for instance, will be very high. In general, contents in periodic Reports are largely standardized and the basis of calculation / inclusions / omission do not change very often. The manner of presentation is typical and frequency of Reporting remains unchanged. These features make this function a good target for automation and an effective implementation will save more than 40% effort for the organization. On a similar note, Reconciliation is another such area with tremendous potential to automate. On the other hand, the benefits may be slightly subdued in niche functions like Research and Analytics or Advisory. A smaller scale coupled with discrete decision making, makes it slightly difficult to automate these functions end-to-end. Having said this, big pockets within these functions, like data collection and upload, data standardization, preliminary analysis, Reports etc., can still make it good opportunity. 2.2 The Business Case for a Digital Workforce Look Beyond Cost Optimization Often the key driver to automation decision is cost optimization. However this is just the tip of the iceberg. The real intangible benefits makes it a more compelling proposition for organizations to consider jumping onto the Digital Workforce bandwagon. Regulatory Compliance has always been a key focus area in the Capital Markets space. The reporting and compliance requirements can only be expected to become more stringent over a period of time. In such instances, a Digital Workforce will be the key to drive towards excellence. A good RPA tool implemented to precision will help in critical tasks like completion of Reconciliations before the cut-off, Generation / Dispatch of reports to client and regulators ahead of deadline, help in Trade Verification / Confirmation, clear Exceptions in Reference Data etc. Further, automation tools can go a long way in improving Customer Delight. These tools can work side-by-side humans and complete a lot of tasks in parallel thereby reducing the overall time taken to get back to the customer. BOTs can reduce the average handling time for customer requests by almost 45-50% with the same accuracy levels or even better than humans. The Digital Workforce is a relentless workforce working 24X7 (subject to the availability of the underlying applications). In that sense, BOTs continue to respond / transact even during holidays and off-hours. This further enhances end-user experience and adds value to the Capital Market firms. 2.3 Impressive Results through Automation! Some Use Cases Below are some Use Cases highlighting benefits to the customers post implementation of RPA in critical Capital Markets functions. By the very nature, any delay in meeting the deadlines in these functions will not only have a P&L impact but will also lead to serious reputation / regulatory setbacks for the organization. Payment investigation: A leading Global bank optimized their payment investigation process, resulting in 47% TCO savings, using robotic process automation (107 human FTEs moving to a target state of 59 human FTEs + 16 BOTs). Reconciliation: Hexaware helped a global reconciliation utility to save 46% in TCO, through an extensive diagnosis exercise carried out by Hexaware; The analysis was carried out across the utility s global locations(137 human FTEs moving to a target state of 79 human FTEs + 35 BOTs). Settlements: Helped in saving 30% in TCO in the settlements function, analyzed through a diagnostic exercise for a global settlement function handling seven global securities markets (129 human FTEs moving to 90 FTEs and 43 BOTs). In these examples, RPA implementation will optimize operations substantially. Productivity savings would therefore be the key driver to such decisions. However, apart from making operations lean, RPA also helps in delivering higher levels of accuracy, within shorter handling times and that s what makes the proposition more compelling. 3 Realizing the Opportunity Hexaware s Approach and Enablers Hexaware has helped many of its customers in their Digital Workforce journey. Hexaware, with its deep understanding of the Capital Markets domain and the operating environment in this industry, has been helping its clients navigate the turbulence of this change and guarantees a smooth implementation of appropriate automation technologies of their client s business. Hexaware s focus has always been to pass on the benefits to the clients, without any fear of cannibalization.

6 Domain first approach We work with 10 of the top 25 global Asset Managers, 4 of top 10 full service Banks, 3 global Custodian Banks our customers have Assets Under Administration(AUA) of over USD 35 Trillion and Assets Under Management(AUM) of over USD 15 Trillion. We use this in-depth domain understanding to identify use cases for automation driven transformation that can result in tangible business value Digital Managed Services Unique engagement model that accelerates benefits, while transferring risk of the automation journey to Hexaware Based on the principles of Operate and Learn to intelligently Automate, Leverage best in class tools, Guaranteed Benefits Banks and Capital Markets firms can realize savings from Day 1 of working with Hexaware, which helps precipitate change and enables rapid adoption of automation across the enterprise In any engagement, if the processes are outsourced, we would lift out the current scope of work, deliver savings upfront, and progressively automate In engagements wherein the processes are in captive/shared services center, we would deliver automation as a service while taking on accountability for automation effectiveness We leverage our accelerators Digital Operations Command Centre, Configuration Manager, Robo Bank, to drive improved value DMS enables the customers leverage Hexaware s indepth domain knowledge, implement RPA in complex technology landscapes involving multiple platforms and legacy systems, which is a typical scenario in global Banks and Capital Markets firms. Further, Hexaware insulates the client from the risk of implementation and guarantees benefits upfront. About Hexaware Hexaware is one of the leading, global providers of IT, Application, Infrastructure, BPO and Digital services. Our business philosophy of Shrink IT, Grow Digital allows customers to significantly shrink commodity IT spend while partnering with them to embrace digitalization. The Company focuses on key domains such as Banking, Financial Services, Capital Market, Healthcare, Insurance, Manufacturing, Retail, Education, Telecom, Travel, Transportation and Logistics. Hexaware focuses on delivering business results and leveraging technology solutions by specializing in services like; Application support, development and maintenance, Enterprise Solutions, Human Capital Management, Business Intelligence & Analytics, Digital Assurance (Testing), Infrastructure Management Services, Digital and Business Process Services. Founded in 1990, Hexaware has a well-established global delivery model armed with proprietary tools and methodologies, skilled human capital and SEI CMMI-Level 5 certification. For additional information logon to: NA Headquarters Metro 101, Suite 600,101 Wood Avenue South, Iselin, New Jersey Tel: Fax: India Headquarters 152, Sector 3 Millennium Business Park A Block, TTC Industrial Area Mahape, Navi Mumbai Tel : Fax : EU Headquarters Level 19, 40 Bank Street, Canary Wharf, London - E14 5NR Tel: Fax: APAC Headquarters 180 Cecil Street, #11-02, Bangkok Bank Building, Singapore Tel : Fax : Safe Harbor Statement Certain statements in this press release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Hexaware has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. marketing@hexaware.com