How Robotics is Making an Impact on Commercial Lending - AFS Best Practices Leadership Council Webinar
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AFS Best Practices Leadership Council
Webinar
How Robotics is Making
an Impact on
Commercial Lending
June 10, 2021
Vision to see the future...experience to get you there. afsvision.com
Agenda
• What
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is RPA Agenda
how ittopic
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• The
0:00 AM –RPA marketAgenda
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• AFS experienceSpeaker Name, Title
with RPA
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• RPA applications in commercial lending
Speaker Name, Title
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• RPA benefits and disadvantages
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Speaker Name, Title
• Technology
0:00 AM – 0:00 AM alternatives related
Agenda topic title to RPA
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May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 2
Poll Question How many on the call today have used or have already implemented RPA in their commercial lending business? • Yes we are actively using robots • Not yet but exploring options • Not in commercial lending but in other parts of the bank • No experience in our institution
Robotic Process Automation (RPA)
What Does It Do? How Does It Work?
• Robots are virtual workers that can complement businesses’ staff. Robots perform relatively simple,
rule‐based repetitive tasks, which can allow humans to focus
on more complex needs requiring subject matter expertise
and/or judgement.
• Robots must be their own entitled “users” or entities, and
must be granted limited or full access to the applications
just as human users of applications must.
• Robots are usually programmed to replicate the actions of
system users, performed via integration between RPA and
systems’ User Interfaces (UIs).
• In many instances of RPA technology deployment, one or
more robots are linked to a special processor/controller
robot, which coordinates, controls, and monitors the actions of the robots tied to it.
• Robots are capable of interacting with a wide range of applications.
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 4
RPA Market Growth: Dramatic, and Will Continue…
Table 1. Worldwide RPA Software Revenue (Millions of U.S. Dollars)
2019 2020 2021
Revenue ($M) 1,411.1 1,579.5 1,888.1
Growth (%) 62.93 11.94 19.53
Source: Gartner (September 2020)
Robotic Process Automation (RPA) Market Growth
Market Size in U.S. Millions $2,700
2016 2017 2018 2019 2020 2021 2022 2023
Source: Datamation
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 5
Various RPA Vendors May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 6
AFS Experience with RPA
In working with our clients, we have learned of various applications for RPA in the commercial
lending space, particularly in servicing loans and updating the “system of record.”
Candidates for tasks that can be completed using RPA should be:
• Repeatable
• Predictable
• Not overly complex
• High volume
• Capable of being defined by a human
AFS has experimented with RPA tools and created several prototypes to work in conjunction
with the AFSVision commercial loan system:
• Taking information from one source and “seeding” an electronic credit file with information from the
source to complete a task
• Applying information received via email notice to queue up the application of a transaction
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 7
AFS Experience With RPA: Syndications Notices
As a member bank in a syndicated deal, processing notices and applying the financial
transaction is characterized by the following attributes.
• Large manual effort – Banks may receive thousands of notices per day
• Resource intensive – A person needs to review the email or fax to determine what the action needs to
be on which customer’s account
• Potential for data entry errors if the notice is
misread
• Significant time can be spent with agent bank
reconciling differences
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 8
AFS Experience With RPA: Syndications Notices
Borrower
$ Investor
How do I
Email $
Investor apply this?
$ Investor
My Bank
$
Pays Interest to FAX
the Agent Investor
$
Agent Investor
$
Agent
Investor
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 9
AFS Experience With RPA: Syndications Notices
Robot’s Role Human’s Role
• Robot monitors an email • Quality control the transaction
box for notices to make sure the payment was
• Reads the email applied properly
• Saves notice to a common • Execute the transaction to
directory credit the loan for the
• Logs into the loan system payment
• Creates a workflow for an • Get a pay raise!
interest payment Learnings
• Searches notice for the • Robot can perform these tasks
loan number, amount, and and take over the “mundane”
payment type actions
• Applies payment • Requires consistent message
• Attaches notice to the format – 80/20 rule
workflow and routes it to • Took approximately three
an approver weeks to develop using non‐
technical staff
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 10Other RPA Applications in Commercial Lending Search Enterprise Content Management (ECM): RPA is used to search the contents of the bank’s ECM to automatically gather relevant loan documents, combine them into a PDF, and send a notification that the file is ready for review, in the context of loan audits and the credit renewal/review processes. Creating credit requests via Customer Relationship Management (CRM): RPA is used to capture information entered into the CRM to generate the shells of credit requests, filling in all relevant information captured by the CRM. Produce customer letters: RPA produces various types of customer letters, generated under specified conditions, including requests for detailed financial statements, often a part of the credit request process. Customer requests are stored in and retrieved from a dedicated database, from which RPA generates letters and places them into one or more queues for officer review/sign‐off. May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 11
Other RPA Applications in Commercial Lending KYC assistance: RPA boosts the speed of customer verification during the customer onboarding and verification processes by automatically validating customer data on government websites. Payments: RPA validates and inputs payment transactions received from borrowers to loan servicing systems. Collateral release: When loans are paid off, RPA validates if the loan is cross collateralized, changes the loan status, and opens up a workflow to queue up the release process for approval. May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 12
Other RPA Applications in Commercial Lending Loan officer hierarchy: RPA generates setup and maintenance transactions for loan officers and other commercial lending staff assigned to the loan in order to keep the commercial loan system in sync with changes in the workforce and loan reassignments. Legal document review: When coupled with an Optical Character Recognition (OCR) technology, RPA accesses the bank Enterprise Content Management (ECM) system and the commercial loan system to perform a major portion of legal‐document review and complete corresponding document checklist(s). Initiating the loan boarding process: After a loan has been approved, RPA accesses and reads the boarding sheets produced by the small business origination system and populates a post‐ approval workflow, attaches the worksheets, and places it in a queue for a human to review, validate, and approve the final booking. May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 13
Other RPA Applications in Commercial Lending Deferrals: Process deferrals for PPP loans. Late charge and auto charge changes: RPA reads account information and turns on or turns off certain functions, such as late charges or whether the borrower should come on or off automatic payment charges. FX, index rate and pledge code updates: RPA reads a file containing the current values for various rates and codes and then updates the system of record with the most current information. Upload borrowing base amounts: Receives information from an ABL system and updates the borrowing base amount on the loan system in order to restrict availability based on the value of the collateral. May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 14
RPA Key Benefits
• Augment human workers with a scalable, 24/7 digital workforce
• Business units no longer have to rely totally on a technical team or vendors for process automation
• RPA allows automatic logging of each step in a process that could otherwise be manual and difficult to
track
• RPA solutions can typically be implemented and modified quickly to reflect changes in business
processes faster than traditional solutions
• Requires less technical knowledge for implementation
• You don’t have to pay overtime
• Humans can be reassigned to higher level tasks, creating job satisfaction
• RPA is faster at executing a task than a person
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 15RPA Key Disadvantages
• RPA does not easily automate long‐running processes — it’s best applied to repetitive “tasks” that
require minimal “human judgement”
• May create problems if application software is upgraded or UI changes (without advance planning and
potential adjustment of the RPA application)
• RPA may need significant enhancement or maintenance if processes change often
• Non‐governed RPA implementations can create potential problems for businesses if RPA proliferates
• Certain of the RPA tool sets are easier to implement and use/program than others; however, the more
powerful ones require the most expertise to use effectively
• If there is an error in the RPA programming or input source, a mistake could be repeated many times
before identified
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 16Poll Question Has anyone been asked to stop using RPA in their business due to issues or for better alternatives? • Yes, we needed to put a stop to the use of Robotics • Partially for a particular application due to an issue • No, we continue to use and build Robots for various purposes
Alternatives to RPA with the AFSVision Commercial Lending System
The following may also be used as alternatives RPA.
APIs
• AFS offers numerous and powerful APIs that work in concert with AFSVision and facilitate system‐to‐
system integration, which can often streamline and/or improve the user experience
AFS ISIP Tool (Inbound Scheduled Interface Process)
• Formatted interface to process a variety of inbound activities (financial, non‐financial maintenance)
• Can be scheduled or ad hoc interface
• Updates records on AFSVision real‐time
Out of the Box Workflows
• Processes specific to commercial loan servicing tasks that can update AFSVision Account Servicing while
still maintaining dual control (advances, payments, risk rating changes, collateral maintenance, etc.)
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 18Technology Alternatives Related to RPA
RPA, Cognitive Technologies, Intelligent Automation, AI – Overlap
Cognitive Technology: Speech and image Concept Level: Similarities, Overlap, and Differences
recognition, for example
Artificial Intelligence: AI, an area of focus is Artificial Intelligence
unstructured data – IBM’s Watson is an example –
applied to tasks requiring human judgement
Machine Learning: Associated with Artificial
Intelligent
Intelligence; algorithms refine themselves, and get Automation
Cognitive
Technologies
“smarter” as use cases are processed
Intelligent Automation (IA): Combination of one or Robotics
more of the above with “end‐to‐end” automation
Venn Diagram
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 19How is RPA Making an Impact on Commercial Lending
• Creates efficiencies and cost savings (1 BOT = 10% the cost of a human)
• Ideally suited for an agile approach to development of automation/prototypes
• Business case may be required for each application as well as governance on the process
• But the “people side” of RPA is just as important:
• Changing the nature of how robots are viewed – become part of the staff and not threatening
• Encourages staff to come up with ideas and to document what they do
• Creates new job opportunities for the “humans” and feeling better about their work efforts
• “Replacing the Robot in People”
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 20Harness Automation to Create a Digital Solution for Commercial Lending
Middle Market • Small Business • Wholesale • Corporate • CRE
May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 21Questions?
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May 13, 2021 Vision to see the future...experience to get you there. ©2021 Automated Financial Systems, Inc. All Rights Reserved. Confidential & Proprietary. 23
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