How RPA Works for Money Managers: What RPA Can and Can't Do

The Case for Automation and RPA

Robotic Process Automation (RPA) helps wealth and asset managers speed up processing times for reporting and other tasks, as well as improve data accuracy.

According to a KPMG report, Robotic Process Automation can cut costs for financial services by as much as 75%.

In addition, a Deloitte-supported study found that asset management firms that embraced digital transformation and automation saw a 13% increase in productivity, 8% growth in AUM, and 7.7% growth in revenue.

And by automating many tasks, organizations can focus efforts on higher-level processes where the human touch is most valued.

What's more, a study commissioned by UiPath and conducted by Forrester Consulting revealed that RPA leads to increasingly engaged employees, as they are freed up to do work that is more important and meaningful.

Bobby Patrick, the chief marketing officer at UiPath, said:

“Employees today struggle to perform under the weight of mind-numbing, repetitive work... As the study finds, the reality is that RPA allows employees to engage in richer interactions with others, perform work that requires more brain power, and make fewer mistakes."

But what can RPA specifically do for investment firms, and are there any limitations? And just "who" is actually doing the work? (We'll answer the latter question first.)

This is not a bot

What Are Bots? How RPA Works

A bot is an automated software, and it acts as a "digital employee."

A bot is not a physical robot, nor is there an external device that is doing the reporting.

Bots perform tasks that are routine and predictable in nature, and they complete the work faster than it would take humans.

The bots are programmed with a logic, for example:

  • If x-step occurs, then perform y-step.
  • When a = b, then do c.
  • When a ≠ b, then do d.

Once the bots are programmed to "memorize" processes and know how to react to common scenarios, it's all smooth sailing, assuming everything was set up properly.

That is how RPA works.

RPA Use Cases for Investment Managers

As mentioned before, any task that has routine, predictable steps can be automated.

Let's look at use cases in how investment managers can use RPA, for example in the case of processing alternative investments. Think about custodian statement downloads and report generation for private equity and hedge fund statements.

When breaking down the steps to complete these tasks, it may seem like it takes very little time to complete.

However, when there are multiple statements to download and multiple reports to prepare, the time adds up. Not to mention, the human element and mundane nature of the work increases the odds for error.

A few minutes here, a few minutes there, and pretty soon you're talking about real money.

Let's explore further how RPA works in what steps can be automated.

1. Logging In to Accounts

With RPA, you can automate the username and password login process for servers, VPNs, custodian sites, web portals, locked files and folders, etc.

From there, the automated process allows you to retrieve files, folders, and other required data points.

2. Reading Emails

The bot can identify emails sent from a specific sender, and it can read subject lines and content within the email.

The custodians generally send structured emails in terms of subject lines and content, so it's easy to program the bot to identify and extrapolate key pieces of information.

3. Downloading Custodian Files

In addition to reading emails, the bot can download attachments within the email.

Or once logged in to the custodian site, the bots can find file locations and begin downloading statement PDFs.

Private equity and hedge fund statements are good examples of files that can be downloaded from a website or email using automation.

And within the portfolio accounting system itself, the bot can begin the daily custodial transaction data download.

If needed, the bot can then convert downloaded files into a desired format and rename the files according to specifications.

Download our Automation Guide for RIAs

4. Extracting and Inputting Statement Data

RPA functions can extract data from fields and send the data to a desired location.

In the process, the bot can create a new price file, for example, and input all the necessary pricing data.

As an example, if you need to extract data from a PDF and place into an Excel spreadsheet, bots can easily do that kind of work.

As long as everything has been set up correctly, RPA eliminates the human error element associated with manual data input.

5. Translating Data

When data is to be sent from the custodian, the information is not always formatted in a way that the portfolio accounting system can recognize what it means.

The good thing is these translation issues have predictable solutions, and a bot can follow a series of steps to translate data so that securities and security type info are properly accounted for.

6. Performing Quality Control Checks

If data is missing or formatted inaccurately, RPA can identify where those issues are. It can even show which accounts remain unreconciled.

7. Sending Emails and Notifications

After reports through RPA have been completed, the bots can then attach files and folders, and send required information to the desired recipients.

If  a staff member needs to let colleagues or clients know that the reports are ready, the bots can handle all of this.

What RPA Doesn't Do

RPA can help identify unreconciled accounts, but given the unique scenarios around cash and positions breaks, RPA does not reconcile accounts.

But considering how robotic processes have handled the above functions, an investment firm can still save so much time in their processes.

As a result, they can spend more time focusing on reconciliation proper and less on slower, manual steps.

But would it still be possible for reconciliation itself to be fully automated? Yes.

AI (Artificial Intelligence) would be that solution, and analyzing the breaks in its very nature is not how RPA works, as it's not an automated function.

RPA is not AI.

RPA is a matter of performing predictable functions, whereas AI requires thinking and decision-making based on context. AI-based solutions at this point are not yet in a mature and marketable position, but at least RPA can free up time for identifying and fixing recon breaks in the meantime.

Getting Started with RPA

One now understands what RPA is and how RPA works for investment managers, along with the benefits of automation.

While RPA is not AI, Robotic Process Automation still helps investment managers save time and money not having to perform manual processes.

As for getting started with RPA, some wealth and asset management companies have IT teams to set things up, but others may not have the resources or expertise to implement Robotic Process Automation. In that case, they should look for third parties that can do it for them.

At Empaxis, we are experts in RPA. We are partnered with UiPath, and we help wealth and asset managers save time and money by automating their routine tasks, like the ones we mentioned. What's more, we don't just set up the bots; we can reprogram and maintain the bots.

If you are interested in learning more about RPA and seeing a demo, contact us.

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