RPA in Compliance: Have you taken the leap of faith yet?

“I’ve the same concluding question, again. The coverage of automation looks incredible, business benefits sound brilliant, but are you certain this is going to work as proposed and solve the problem in hand?” asked me a business leader, from one of the world’s leading banking and financial companies. This was 18months ago during our fifth round of review for Robotic Process Automation (RPA) proposal for one of their commercial products’ massive sanction screening operations. My response was unaltered from the last four times – “Yes, I’m certain. You can take the leap of faith”.

Their business unit was being cautious, for obvious reasons, but after four months of extensive analysis of our proposed technical solution, probable risks involved & economy of scale (ROI) revolving the subject they finally turned out to be courageous enough. We had a handshake and started the project. And in less than 8months, when the automation was implemented successfully & became fully operational, they were ecstatic in their launch announcement, calling out this robotic solution as one of their best ‘Pioneering Innovations’ with over 50% of automation coverage from their previously manual-heavy operations. Their journey from learning about RPA all the way to implementing it and becoming front runners in the organization was iconic.

This article is neither about RPA nor its visionary utility in Financial Services. The internet is already flooded with gazillion white papers on those subjects, one can easily get lost in their depth.

Through this write up I just want to channelize my firsthand experiences, learnings & recommendations on the positive paradigm shift RPA can bring to the Compliance unit within any financial institution. 

Compliance World needs RPA. Period.

Compliance norms & regulatory burdens are ever increasing, and so is transaction volumes rapidly, creating more tasks for this department in financial organizations to maintain appropriate levels of control and remaining compliant. Ironically they also want to remain lean on the headcount & streamline operations. In my view there is no better stone than RPA to hit these two birds together effectively. Having said that, subject of RPA can be intimidating in terms of trust issues on bots, use-case selection and most sensitive topic of replacing human workforce. Let me make an attempt to address the frequent raised concerns. Most of these elements are also applicable broadly over the RPA practice. 

1. Get the Basics Right

RPA execution knowledge is obviously needed before investing in it, mentally and financially, but interestingly enough that is not the first step in such kind of operational transformation journey. RPA is primarily intended to gain efficiency & free up human bandwidth, but it’s not a silver bullet to solve all our compliance operational problems. It is meant to be one of the tools in your toolbox, not the only one. Therefore it is imperative to comprehend the problem first that it is meant to resolve.

We must get the basics right by taking the journey in three logical steps: ANALYZE, OPTIMIZE and AUTOMATE.

Analyzing entails getting a good grip on the process or problem you’re trying to solve. It becomes a unique business consulting assignment in itself, with outputs like process maps & related artifacts, with a flavor automation. It also produces insightful byproducts like gap analysis & sometimes pretty obvious recommendations to fix few peripheral issues.  

Optimizing is the core of this journey. This is where we perform process revamping to make it better, more scalable, leaner & technically futuristic from its current state. It is ‘the’ crucial opportunity point to fix an ineffective process, because if we end of automating a poorly-designed process we’re only going to create its automated version, and that is going to defeat the purpose.

Finally, Automating through RPA framework as the final milestone of process re-engineering.

2. Selective Start

RPA, in an ideal scenario of an automation transformation roadmap, is intended to automate an entire process, from start to finish. However, from practical perspective, we should begin this roadmap with selective coverage, weighing in the criticality of the tasks and their respective business risks on failure or errors. One of the many ways of selective automation is bifurcating the process map into Level 1 and 2, where L2 activities are business critical decision making junctions, with higher complexity of algorithm. To build upon the trust on bots we should start with L1 in the first phase, and then work towards an evolution for embracing L2 as well, eventually as part of the roadmap.      

3. Identifying Level 1

L1 are low risk straight forward tasks based on well-defined static business rules. Let’s take an example of sanctions screening or transaction monitoring process. From common observation across organizations the most time consuming tasks for the operators/investigators are logging into different places (DBs, applications, tools, external websites) to pull required information. Second in line is the definitive patterns of SOPs which consume that information to take the decision or necessary action. By practical deduction don’t you think they become obvious pick for L1 categorization? We can make operators happy, more efficient by alleviating them from mindlessly collecting volumes of data or redundant repetitive SOP clicks. 

4. RPA Augments your Workforce, NOT Replaces them

RPA immediately brings Robots into our minds and there is a common perception it will eventually take away most human jobs, but it is a misguided notion. 

It can never replace human judgment, oversight and problem solving. Needless to say there are handful of processes in Compliance world that will not require (or should have never needed) any level of human handling, as explained in ‘Identifying L1’ section. But looking at current level of RPA maturity in the industry, we’re implementing a pseudo-RPA (also referred to as RDA – Robotic Desktop Automation) model at most use cases where analysts work in tandem with bots, making the human workforce faster & more-than-ever relevant by allowing them to focus only on making intelligent business decisions.

It’s about time that organizations step-up in their employee education and communication practice on the subject of RPA & pro-actively avoid any impact to their staff morale. All RPA projects should have adequately high levels of employee engagement during all relevant phases i.e. use-case identification, current state-assessment, optimization, quality assurance, training and ongoing maintenance. Statistically it leads to higher staff satisfaction and elevated productivity.

Teams should feel empowered, not threatened by RPA to support the firm’s visionary voyage.

Time to take a Checkpoint

Compliance LoBs across financial institutes, with right guidance & governance, and due diligence in all four above mentioned KPIs, are realizing a major operational uplift from RPA in a relatively short period of time.

Regardless of the RPA Maturity Index for these financial institutes, which may vary on relative scale depending on their use case complexity & selection of RPA tools, it is enabling them to take a quantum leap in terms of efficiency of their Run-the-Business Compliance Operations to free up the budget and talent, to focus on Grow-the-Business enterprise initiatives.

So have you taken that leap of faith of yet?