The client is one of the largest banks in the UK and provides commercial financing solutions to businesses including factoring, invoice discounting, asset-based lending, asset financing and more. As a market leader in the commercial finance segment, the client has a 16% market share that translates to £3.7 billion.
The client faced challenges with carrying out due diligence on a regular basis with respect to monitoring ageing of invoices and contra-trading activities and reached out to Firstsource for its expertise.
- The frequency of the check deposits ranged from monthly for high risk clients to half yearly for low risk clients.
- 55% clients required a monthly contra check on a client base of 8000
- Purchase and sales ledgers had unstructured data for e.g. names were represented differently for the same clients (in abbreviated forms, Ltd. as Limited, etc.) This required a thorough visual check to identify the correct matches and posed as a major impediment to automating the process.
- Contra check could therefore be carried out on a sample basis of 40% i.e. 1800 out of 4500 clients due to process complexity.
- The financial exposure on the remaining 60% posed a major risk which could be addressed only by increasing penetration of contra checks to 100%.
Firstsource provided solution for two key products of the invoice finance portfolio – invoice factoring and invoice discounting.
- The solution incorporated robotics with fuzzy logic to deliver 100% accuracy in the process.
- It included PDF to Excel conversion software to structure all forms of unstructured data.
- It used MS Access for database management.
- As the success of the automation was dependent on the accuracy of matches, it was identified that the automation generated far more accurate matches compared with the task being performed by a person, especially where business names would start with a number.
- Contra check completion percentage increased from 40% in the pre-automation phase to 95% post automation. This ensured that all the clients that required a contra check were covered from a risk perspective.
- Risk exposure was reduced by £3.5m per month.
- Timely completion of risk-monitoring measures for all the qualifying clients
- An activity that took 30 minutes to complete per client, currently doesn’t require any manual intervention
- Percentage of clients processed straight through increased from 86% in the first month to 95% in the third month once the solution was implemented
Reduction in monthly risk exposure
Increase in contra-check completion