Like other leading software developers (including salesforce.com, Microsoft and Google), Avaloq knows it has unrivalled expertise in running its own software. We have the experience that comes from working with 135 global banks and running the day-to-day back-office operations of 36 banks around the world. We have worked out the very best ways to fine-tune the Avaloq platform and configure processes that deliver world-class levels of automation. Our BPaaS clients enjoy STP rates approaching 100% and reversal rates that are close to zero, and our first-hand experience of running back-office operations enables our R&D teams to exploit the full potential for automation that’s available within the software.
Our BPaaS goal is to create a back office that’s as close to human-free as possible. We’re doing this by continually improving our best practice processes within the Avaloq Banking Suite and using robotics, AI and machine learning to handle integration with external applications and feeds. Thanks to our state-of-the-art control room, we’re able to monitor processes continuously across our operations, reducing risk and ensuring safe, reliable back-office operations for all our clients.
Robotics and AI/ML
Avaloq has been applying robotic process automation (RPA) techniques since 2017, when we worked with a leading supplier, Automation Anywhere, to create an initial ten bots in areas like global trade processing, global income and market messages. These bots integrate Avaloq with third-party software such as Microsoft Office, global messaging and web-based custodian tools. In 2019, we tripled the number of bots. We now have 79 live bots serving 19 clients, with 240 daily runs.
To further automate BPaaS services where Avaloq’s software, alone or combined with RPA, cannot address a particular problem, we’ve identified several use cases in which the application of AI and machine learning could be used. We’ve identified eight use cases in AI/natural language processing to transform unstructured data into structured data that can be processed through an Avaloq API. The first use case we’re developing is for securities transfers, where today’s requests for position transfers from market counterparties are received as email, PDF and Excel files that require reading and interpreting to allow unstructured data to effectively become structured. We’re working on this project in collaboration with a Swiss university and we expect to go live with the first clients in early 2020.
With Avaloq making such investments in robotics, AI and machine learning technologies, all our BPaaS clients are able to take advantage of these revolutionary technology platforms without having to invest in developing them. The community aspect of our BPaaS operations means that Avaloq is also able to share best practices across clients, speeding up time to market for these new technologies for all Avaloq users.
Locations and skills
Avaloq currently supports global clients from three service centres in Switzerland, Germany and Singapore. We’ve recently begun operations in Pune, India, to provide further support for IT development and maintenance for the existing centres and assist in facilitating follow-the-sun working. All these centres are connected in a global service mesh to ensure continuity of operations and to enable teams across the globe to support our clients, irrespective of location. We expect our service centre network to continue to grow in the coming years (e.g. new country operations), as we’re finding more and more banks that are interested in working with us to transfer existing operations and make the transition to a service model for the back office.
An additional service initiative, in the last year, has been to improve client access to our highest skilled resources by establishing centres of excellence within the service centre network. While client-specific tasks that regulators insist must be processed locally are spread across our service centres (with data, of course, maintained locally, where this is required), those tasks that are location agnostic (such as trade processing) are being centralized to create pools of expert resources that can be quickly and easily accessed by all our clients.
This centralization programme is just one aspect of the changing model of highly-automated back-office operations. As every bank seeks to achieve these high levels of efficiency, the roles played by our staff, like the staff in any bank, are changing equally rapidly. Historically, the back office has been populated by teams of task specialists, region by region. In the future, we’ll see back-office staff becoming process specialists, bridging the roles of process owner and task specialist. Staff will increasingly focus on client interactions for problem-solving and to identify new opportunities for process innovation and restructuring (e.g. efficient client onboarding), using advanced technologies like machine learning and AI. To enable this transition, Avaloq has invested heavily in training and certification programmes (for example, looking at topics like design-thinking principles and continuous improvement methodologies) for all of our global service centre teams. This will ensure that individuals can develop their skills in step with the digital transformation of back-office infrastructures and roles. Our BPaaS clients all benefit equally from our investments in this transformation of skills and competencies.