Robotic Process Automation - Deloitte

Robotic Process AutomationIn Risk and Compliance for Banking and Finance2018Risk Advisory

Robotic Process Automation - In Risk and Compliance for Banking and FinanceIntroductionRobotic Process Automation refers to a software application (or BOTs) that replicates the actions of a human user with the userinterface of a computer systemComputer Coded SoftwareWalking, talking auto-botsPrograms that replace humans performingRepetitive, rules-based tasksPhysically existing Machines processing paperCross-functional and cross application scriptsArtificial Intelligence or Voice Recognition andreply softwareHigher levels of regulation and more challenging regulatoryexpectations in recent years have resulted in significant coststo financial institutions. This coupled with a greater demand fortransparency and rigor has brought the role of technology tothe forefront.The application of Robotic Process Automation (RPA) to riskmanagement and regulatory compliance, has the potential todisrupt the Financial Services world. Already, RPA is helpingfirms to support components of compliance processes in acost-effective, flexible and timely manner.Over the last couple of years, we have established ourcredentials in the Innovation and RPA ecosystems with financialinstitutions, industry bodies and FinTech/RegTech startups.Our initiatives span across development of client strategy,world class research, and accelerator and incubator programs.We believe that the first-hand knowledge and experiencegained from our initiatives, together with our existing expertisein risk and regulatory matters, our global presence andconnection with leading financial institutions, enables us toprovide unparalleled services to help business leaders assessand realize the opportunities created by RPA.The subsequent pages detail our offerings applying RPA in the areas of riskmanagement and regulatory compliance.02

Robotic Process Automation - In Risk and Compliance for Banking and FinanceRegulatory ReportingSuited to: CCO, C-suiteProblemStatementRegulators require a wide array of regulatorysubmissions from banks at varying frequencies andacross the functional areas – financials, asset quality etc.HistoricalProcessBanks are at different stages of implementationof ADF (Automated Data Flow) systems. However,regulatory returns involve significant manual process oftransforming source dataRPA EnabledProcessDisparate GoldenSources DataRealized/PotentialBenefitsAccuracy of information submitted to the regulatorProblemStatementThe checks are performed by testing compliancethrough a manual process using compliance checklistHistoricalProcessComplianceChecklistsRPA EnabledProcessBots per productperformingcompliance testsAchieve continuous testing for compliance for 100% ofthe trades for compliance with regulatory requirementsand internal limitsReturnCompilationFull audit, review, approval and workflow functionalityand avoiding any regulatory penalties and reputationimpactBanks require to adhere to a large volume of regulatoryrequirements and perform post trade compliancechecks for the trades executedDataPreparationData Collationand PreparationRealized/PotentialBenefitsTrade SurveillanceSuited to: C-suite, CCO, IA,FO, BO03

Robotic Process Automation - In Risk and Compliance for Banking and FinanceCompliance TestingSuited to: CCOProblemStatementChief Compliance Offficers are required to performindependent testing of compliance to key regulations tobe able to certify business unitsHistoricalProcessThe checks are performed by testing compliancethrough a manual process using compliance checklistsRPA alBenefitsAchieve continuous testing for compliance withregulatory requirements and internal policiesBanks collect an array of documents from theircorporate customer to undertakepost-sanction monitoring and computation of keyfinancial and risk indicatorsProblemStatementClient data is submitted in disparate formats andcomputation of ratios is a manual processHistoricalProcessCustomerDocumentsRPA EnabledProcessOCR, DataCollationBots forcomputationof ratiosData inLMSAchieve automation of computation of risk and financialindicators for 100% of the clientsImproved data collection for future risk analysis andmodel tionBots forComplianceTestingCredit Monitoring/CollateralSuited to: C-Suite, BusinessHead, CRO

Robotic Process Automation - In Risk and Compliance for Banking and FinanceExpected Credit LossComputationProblemStatementThe new accounting standard IndAS will require banksto compute ECL every quarter to compute the provisionsfor the financial statementsHistoricalProcessManual computation through excel sheets using datadumps from the risk functionsRPA EnabledProcessData Extracts withPD, LGDDataPreparationBots for ECLComputationRetail holesaleRealized/PotentialBenefitsSuited to: CFO, CROSeamless quarterly computation of ECL for reporting offinancial statementsBanks need a large number of models for riskquantification and capital computation across riskcategories and productsProblemStatementAnnual validation of models. Due to large number ofmodels, not all models get validated every yearHistoricalProcessModel Outputs andActual OutcomesRPA EnabledProcessDataPreparationBots for runningstatistical testsContinuous validation of model outputs, its impact andmodel performanceRealized/PotentialBenefitsModel PerformanceSuited to: CRO05

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Robotic Process Automation - In Risk and Compliance for Banking and FinanceDemos and Point of ViewsDemo - Regulatory ReportingConnectors: Robotic Process AutomationA quick-reference guide to how RCA plays out in global business services,shared services, and outsourcingDeloitte POV, 2016Peter Lowes, Frank Cannata, Jason Barkham, Subodh ChitreCognitive Technologies: The Real Opportunities for BusinessExamines the evolution of cognitive technologies and how it is being used inorganizations todayDeloitte Review, 2015David Schatsky, Craig Muraskin, Ragu GurumurthyRedesigning Work in an Era of Cognitive TechnologiesAnalyzes the impact of disruptive technologies and how new possibilities forwork redesign can provide greater value to business and customersDU Press, 2015David Schatsky, Jeff SchwartzDemo – Trade SurveillanceThe Robots are ComingExamines the increasing appetite for robotics leadership and discusses howimplementing robotics can improve the Finance functionsDeloitte UK POV, 2015Richard Horton, Nick Prangnell, David Wright, Dupe WitherickShow me the Money: Autonomics in Business Process OutsourcingExamines how autonomics hasthe potential to be a disruptor in the outsourcing industryDeloitte, 2015Marc Mancher, Simon Tarsh,Dan Kinsella, Richard SarkissianDemo – Compliance AggregationAutomate This: The Business Leader’s Guide to Robotic ProcessAutomation and Intelligent AutomationExplains the basics of enterprise automation using RPA and introduces thecapabilities behind Intelligent Automation Deloitte POV2015Peter Lowes, Frank Cannata, Subodh Chitre, Jason BarkhamBeyond Automation: Strategies for remaining gainfully employed in theera of very smart machinesReviews current thinking around automation and suggests businesses lookat automation as a form of augmentation Harvard BusinessReview, 2015Thomas Davenport, Julia Kirby07

ContactsRohit MahajanPresidentRisk AdvisoryE-mail: rmahajan@deloitte.comAbhay GuptePartnerRisk AdvisoryE-mail: agupte@deloitte.comAshish SharmaPartnerRisk AdvisoryE-mail: sashish@deloitte.comAruna PannalaDirectorRisk AdvisoryE-mail: apannala@deloitte.comDeloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private companylimited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL andeach of its member firms are legally separate and independent entities. DTTL (also referred to as“Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for amore detailed description of DTTL and its member firms.The information contained in this material is meant for internal purposes and use only amongpersonnel of Deloitte Touche Tohmatsu Limited, its member firms, and their related entities(collectively, the “Deloitte Network”). The recipient is strictly prohibited from further circulationof this material. Any breach of this requirement may invite disciplinary action (which may includedismissal) and/or prosecution. None of the Deloitte Network shall be responsible for any losswhatsoever sustained by any person who relies on this material. 2018 Deloitte Touche Tohmatsu India LLP. Member of Deloitte Touche Tohmatsu Limited

Seamless quarterly computation of ECL for reporting of financial statements Realized/ Potential Benefits Realized/ Potential Benefits RPA Enabled Process RPA Enabled . Demos and Point of Views. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company