Adopting cloud solutions strengthens client services

Back-office automation supports financial institutions’ digital initiatives

Where can financial institutions and wealth managers stand out from their competitors these days? Certainly not in the area of back-office processes and performance. Today the battleground is elsewhere – in the areas engaging customer experiences and seamless end-to-end financial services.

As clients seek faster and more personalized services, financial institutions have the opportunity to make an immediate and significant impact through an update to their business model. Working with cloud solutions, specifically, the automation of back-office processes, has the potential to create new and engaging client experiences through intelligent digitalization and automation.

According to Accenture, financial institutions are hesitant to invest in a full-scale cloud transformation. And though it seems that back-office processes are the last place that financial institutions should be focused on or investing in, emphasis on unseen back-office processes will ensure higher efficiency rates, and cost-effective compliance.

The challenges of changing business models

Back-office resources are going global

For most financial institutions, improving operational efficiency is a costly endeavour as they have already focused heavily on improvements through standardization, core automation, and centralization. From a global perspective, back-offices in separate countries also no longer make financial sense. Moving forward, the challenge is how to integrate and optimize an external system and find skilled back-office resources. This level of investment in new technologies such as robotics, AI, and machine learning comes with an initial cost, of course. But it often pays off with improved performance, lower total costs, and increase margins.

“63% of financial institutions surveyed have no roadmap with key performance indicators to measure progress to the cloud.”

Accenture

Since financial institutions and wealth managers rely on follow-the-sun operations, global workflow passed between offices in different time zones must be efficient. This creates some challenges; to ensure that an integrated external system is equally efficient in every region and to be able to access global expertise when and where it is needed without the cost burden of duplicating specialist skills across different markets.

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A stable and robust platform for BPaaS clients worldwide

Focus on new ways to ensure great and consistent client services

To deliver a nearly human-free back-office, a platform must constantly evolve from real life. Our vision of a world-class level of automation came to fruition through years of working with top financial institutions and running back-office operations. The Avaloq platform gives BPaaS clients STP rates approaching 100% and reversal rates that are close to zero. A state-of-the-art control room monitors processes continuously across operations, reducing risk and ensuring safe, reliable back-office operations for all clients.

Our commitment to future innovations through our investment in robotics, AI, and machine learning technologies also benefits our BPaaS clients. Avaloq invests in the use of RPA and other automated BPaaS services to pursue newer applications of AI and machine learning, for example, using AI/natural language processing to transform unstructured data into structured data that can be processed through an Avaloq API module. A recent collaboration with a Swiss university is focusing on securities transfers that convert unstructured data from position transfers requests from market counterparties received as email, PDF, and Excel files into structured data.

Centralization is just one aspect of the changing back-office operations model. For the future, we see the back-office, once populated by teams of task specialists, region by region, as a place for process specialists, bridging the roles of process owner and task specialist. BPaaS clients will benefit from trained and certified staff focused on client interactions for problem-solving, how to identify new opportunities for efficient client onboarding, and using advanced technologies like machine learning and AI.

If you would like to know more about how an BPaaS model can help ease back-end burden, visit our dedicated BPaaS web page. Or get in touch and let our cloud experts provide you with the insights you need to accelerate automation through BPaaS.

“Avaloq has a well-established BPaaS offering, with successful installations in Europe and Asia in a number of local and global banks. This offering has grown in credibility after a few years in the market, and it is a differentiating factor for this vendor.”

Vittorio D’Orazio

Senior Analyst at Gartner

Our roadmap

Continuous improvement of our solutions – for the near and long term

We continuously aim to develop and further improve our BPaaS service and offerings. Avaloq is working on different activities, which for example include:

  • Make onboard of clients as standard as possible (Processes, SLAs, System)

  • Standardize back-office processes and functionalities of new client (one-time)

  • Automate and improve via the three main levers: Native STP improvement, RPA and AI/NPL

  • Centralize as much as possible to leverage economies of scale. Target locations per country: max 2.

  • Off- and nearshore depending upon client business and willingness. Strong onshore governance

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