Insights

How Intelligent Automation Can Transform Asset and Wealth Management Space

Maureen Doyle-Spare, General Manager, Asset & Wealth Management at UST

Industry Overview

While the industry has experienced a significant rise in growth in 2021 and conditions that have driven markets to hit record highs, they are at an inflection point. They are poised with the expectation of rates to march higher, targeted fiscal stimulus is retracted, and central banks rein in asset purchases.

With this market instability and as intense free pressure continues there is an increasing demand to provide higher value services at lower fees and expense ratios while focusing on creating top-line growth.

It is expected in 2022, firms' growth acceleration will be created through a range of tangible and intangible factors that span four key dimensions:

• Customer Expectation of Personalized Value-Added Services
• How they Engage with those Services with New Advisory Models
• Increase Top-line Growth by offering clients the ability to achieve purpose through their investments and focus on their sustainability profile
• Creating a secure, frictionless ecosystem to provide greater discipline over their cost structure and drive innovation which will be challenged with anticipated sustained inflation

Queue Intelligent Process Automation

As a result of revenue growth, operating costs have significantly increased for various reasons. One of the main cost drivers is to support a decaying fragmented infrastructure that has been stressed over the years and most recently with the increase in new business growth. To add, the industry is experiencing an increase in compliance costs due to changes in regulation and the expectations to introduce (both strategically and tactically) new or alter existing processes to meet individual client demands.

The financial service industry, regardless of the sell side or buy side, over the past 5-10 years, has been on a journey to implement a digital operating model. Unfortunately, most Asset and Wealth shops have been behind. However, due to the impact of Covid and the explosion in Fintech, there is a new sense of urgency to implement a digital operating model. Digital operating models, if done properly, should enable efficiency, improved control, and scalability. This introduces a significant change in mindset for the industry because, traditionally, the industry has been relatively slow to embrace digital. Implementing a digital operating model will require top-down support to support a program of change that will include multiple pillars: large-scale technology change, next-generation data architectures, and, most importantly, a change in business operating models.

Intelligent Automation - A simple way to transition to digital

The term intelligent automation is a widely accepted description of a group of technologies or techniques that are either used in isolation or together to automate processes. Intelligent automation (IA) combines robotic process automation (RPA) with advanced technologies such as artificial intelligence (AI), analytics, optical character recognition (OCR), intelligent character recognition (ICR), and process mining to create end-to-end business processes that think, learn, and adapt on their own. Intelligent automation is sometimes referred to as intelligent process automation (IPA) and hyper-automation.

For wealth managers, asset managers and asset servicers, intelligent automation provides an opportunity to quickly address current challenges and create a more efficient, effective, scalable, and controllable operating model. If done properly, firms are delivering a broad set of benefits. In addition to cost savings, firms achieve lower client touch points, reduced operational and regulatory risk, and happier employees.

Intelligent automation is a catalyst for standardization. Quick configuration is key to delivering IA benefits quickly. IA tools are dynamic and are becoming more and more user-friendly with the introduction of low code / no code concepts. This, if properly controlled, can reduce the dependency on developers to drive priorities. The real power of IA is to leverage a string of technologies to address inefficiencies across the entire process. Vital to implement automation using an agile framework, with the iteration of proof of concepts that deliver minimal viable products.

Use Cases of Intelligent Automation

Here are two common use cases that can benefit from intelligent automation. All these examples can leverage multiple techniques such as RPA and IDP (OCR) to create powerful solutions quickly. For example:

Client Lifecycle Management– there is a demand to provide a best-in-class client experience across the entire client lifecycle ecosystem. New account setup/maintenance is a common example. Traditionally onboarding analysts would gather necessary documentation from the clients involving both soft and hard documents, the redundant process of entering the static data into multiple in-house systems, and redundant touch points between the client and wealth manager. By leveraging Intelligent automation, the process can be reengineered by leveraging the combination of RPA and OCR to digitally gather and scan the documents to extract the required client data. This significantly reduces cost and improves accuracy and overall control of the process.

Order Management – operational risk reduction in operating models is a common objective for most firms. Due to age, fragmented operating models, and a limited budget for enhancements, order management platforms suffer from capacity, flexibility, performance, and reliability issues. Firms may have an in-house order management platform, but they tend to be older and not very easy to adapt to clients changing demands.

This means firms are still very dependent on using user-defined tools such as spreadsheets to provide a quick offering to client requests. While this does create flexibility and a bespoke element of client service, it is accompanied by risky offline processes. Intelligent automation can help firms manage and reduce risk by combining RPA and IDP (intelligent document processing) techniques.

Intelligent automation challenges

Many wealth managers, asset managers, and asset servicers continue to explore such options. Still, they can become frustrated or be held back by resource constraints, the time required, and the high costs associated with achieving desired benefits.

• First, it's not a tech problem because intelligent automation techniques have been successfully proven. It is about the relationship between humans and technology and the element of trust. This challenge is being addressed through glass door automation, which gives users transparency to the tasks that are completed in the background.
• Second, firms struggle with where to start their automation journey and building a strong business to support it. Senior leadership buy-in and support from the top are critical to support the development and communication of change management programs to help employees to adapt. Selecting the right level of ROI and setting the right metrics to track progress will lay the path for future implementations.
• Third, as the skies of the pandemic start to clear, firms need to be smart about putting together a digital strategy that embraces intelligent automation and the changes in operations that come with it.

Summary

It is imperative to focus on opportunities with the highest impact on your business with a proven platform that can benefit your organization. UST SmartOps is an AI-powered cognitive automation platform that holistically learns and reimagines your business processes while intelligently digitizing and compressing manual workflows. UST SmartOps empowers Asset and Wealth Managers and allows them to focus on the opportunities that create the greatest value.