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BLOG. 17 min read

Benefits of Intelligent Automation for Alternative Investment Firms

Investors need faster, more personalized customer experiences, and alternative investment firms need to focus on providing those friction-free experiences, even in the face of economic turbulence and increasing regulatory requirements burdening investment managers. Even for firms using legacy or outdated systems and processes, the pressure is building for those firms—no matter how well established—to find new ways to stay ahead of the competition. 

Often, firms rely on people acting as glue to keep clunky processes operational, rather than investing in digital transformation. Those employees get stuck with inefficient, manual tasks like creating handwritten documents or spreadsheets. 

As fees fall, debt rises and customer expectations increase, intelligent automation (IA) and other next-generation technologies play a critical role in the future of alternative investments. 

IA can help the alternative investments sector adapt to the changing business landscape through growth, diversification, improving the investor experience and becoming more agile. 

Automation in Alternative Investment Management 

There’s a need to grow and diversify risk acquisition within the alternative investments sector. However, given the skills shortages for roles like research or data science (roles that can be hard to fill), organic growth seems to be a thing of the past. And attracting talent is not the only challenge for firms. 

Current Challenges in Alternative Investments 

Providing a better customer experience is essential for attracting new investors—particularly the digital-native generation set to inherit significant sums from their older relatives—and as new competition in the alternative investment sector democratizes investment for new cohorts, firms are feeling the pressure to deliver those enhanced experiences. 

To stay ahead of the competition, firms are adopting hybrid models for their products, mixing illiquid private market assets with more flexible investments. By combining more complex products and reporting with a much larger market, firms can avoid the need for investment in additional, complex IT systems by using automation and artificial intelligence (AI). 

In the current environment, firms are facing many challenges: 

  • High-interest rates 
  • Cheap borrowing ending 
  • Increased competition 
  • Demand for lower fees 
  • Requirements for better auditability 
  • Cryptocurrencies emerging 
  • Increasing regulation 
  • Changeable client expectations 
  • Portfolio value optimization 
  • Environmental, social and governance (ESG) regulations 

Intelligent automation can help firms contend with all of these challenges. 

Finding solutions 

Firms require dynamic systems and a strong governance model to thrive in the shifting business landscape. While automation can deliver the required flexibility, it should be implemented strategically with automated processes beyond trading and foreign exchange. 

Firms need to implement scalable automation across the entire enterprise to truly optimize their operations—from front, middle and back-office work. 

At SS&C Blue Prism, we look at total digital transformation through a broad lens that combines the goals of unifying the workforce, transforming journeys and scaling across the enterprise. 

Moving Toward Total Transformation 

IA is a broad concept of cognitive technologies routing in business process management (BPM), robotic process automation (RPA) machine learning (ML), artificial intelligence (AI) and other next-generation technologies. 

IA infuses your processes with digital workers that are designed to identify and remove inefficiencies in your business operations—slow turnaround times, lengthy handoffs and rework caused by manual processing errors. 

By giving those processes to digital workers, IA frees your employees to focus on higher-value, strategic work. Additionally, the customer experience (CX) improves with higher quality and faster output of services. 

Unify the workforce 

IA enables firms to apply the right resources to the right job by connecting the human and digital workforce. 

Digital workers are able to operate 24/7 without breaks and with minimal handoffs and delays—and they are trained to access the same systems as employees. They loop people into their work as needed, and they document their own performance for enhanced transparency and auditability.  

Furthermore, ML and AI-powered digital workers can take on work in growing complexity because they learn as they work. For example, digital workers can integrate natural language processing (NLP) to handle simple customer inquiries via a chatbot. 

In a constantly fluctuating market, firms need IA’s adaptability and granular reporting to stay on top. 

Transform journeys 

From front to middle to back-office processes, IA transforms customer and employee journeys by connecting work at every level. IA creates a more standardized, cohesive workflow by aligning work to business goals, eliminating functional silos and reusing best practices and procedures.  

Structured, repetitive manual tasks are prevalent at most firms, and digital workers are perfectly programmed for these tasks because they operate without mistakes and at a much faster pace than their human counterparts. Essentially, when digital workers free your employees from tedious tasks, those digital workers are allowing employees to focus on decision-making and strategic initiatives rather than taking work away from them.  

For example, digital workers can fill out client data across multiple systems and perform background checks, allowing your people to focus on the customer. Plus, you can accommodate your changing workloads by scaling the volume of digital workers up and down.  

Beyond that, predictive AI technologies allow your digital workers to anticipate future trends and build operational models to support emerging levers for growth, such as new investment products and services. 

Firms must consider adopting modern, technology-driven workplace practices in order to attract and retain the best employees and support a loyal customer base amid a continuing global skills shortage. 

Scale enterprise-wide 

From onboarding new clients more quickly to filing documents and flagging forms with missing or incorrect information, IA streamlines your firm’s operations at every level. 

By automating research, reconciliation, auditing and reporting processes with IA’s keystroke-level auditability, firms and agents gain the confidence that their decisions are based on accurate, near-real-time data. 

The right automation platform allows firms to build onto standalone projects to deliver strategic deployment of digital workers across the entire organization, empowering people, customers and companies. 

How Can Intelligent Automation Add Value to Alternative Investment Management? 

After that foundational exploration of IA technologies, here are some use-case examples of how IA can improve functions in the alternative investments sector: 

  • Investor onboarding: Digital workers extract and process data from unstructured formats to support your client services team. Example: populating fields from a handwritten subscription form into the correct systems. 

IA reduces onboarding time by up to 75%. 

  • Reconciliations: Digital workers give near real-time data transparency for senior leaders and clients, and give firms up-to-date pictures of available investment funds. 

IA names and archives documents with 100% accuracy. 

  • KYC and AML checks: Digital workers can maintain regular KYC and AML checks when validating new clients, relieving your compliance teams from having to perform periodic background checks. 

IA helps firms achieve a 30%+ efficiency gain. 

  • Regulatory and client reporting: By sourcing, accessing, ingesting and displaying data, digital workers can reduce the time to complete manual reports within a siloed system. 

IA can improve firms’ turnaround times by 75%. 

  • Investment research: Digital workers can free up analyst and investment manager time for higher-value decision-making by sourcing and gathering information from online sources for analytics and insights.  

IA enables firms to collect 80% more data and data sources. 

Best Practices for Implementing Intelligent Automation 

Implementing automation in a way that’s scalable across an organization requires strategy. When considering an intelligent automation program, firms should address the following in their business case:  

  • Senior management buy-in and commitment to adopting automation across the firm. 
  • A federalized or centralized approach to governing automation activities. 
  • An automation-ready culture established across your organization. 

The “automation journey” is the stages an organization goes through when adopting intelligent automation. Your automation will be more robust, secure and scalable when you follow specific steps, helping you deploy automation more easily to other business processes when needed.  

Four key stages of the automation journey 

  1. Identify the processes to automate first: Process intelligence uses task and process mining to determine areas that are good first candidates for automation.  
  2. Create a plan to remove bottlenecks: Uncover and eliminate process inefficiencies using insights gained from process intelligence, making the processes easier to automate.  
  3. Set business goals: Use accurate and detailed reporting, and develop strategic outcomes with a level of detail that goes beyond time or cost savings.  
  4. Gain organization-wide buy-in: Initiate awareness and education programs to communicate the benefits of IA to everyone in the firm. 

Finding the Next Target 

Your firm must consider continuous innovation and improvement to build an effective IA program. Your business goals should be a moving target of constant progression. 

The next step in the automation journey is for alternative investors to consider how they can align their use of IA with their business growth goals. 

Humans alone can no longer keep up with the volume and complexity of data across multiple asset classes, as well as new levels of analytics and transparency requirements. A digital workforce can transform how alternative investment managers respond to the changing market. 

Want to read more about how RPA and IA can transform the alternative investments sector? Download our free "Technology on a Trajectory" e-book. 

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