Stay ahead of risk: Firstsource reduces monthly risk exposure by £3.5m for a major UK bank

£3.5 million
Reduction in monthly risk exposure
100%
Increase in contra-check completion
Stay ahead of risk: Firstsource reduces monthly risk exposure by £3.5m for a major UK bank
Case study

Background

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.

Business challenge

  • 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 solution

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.

Business impact

Quantitative benefits

  • 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.

Qualitative benefits

  • 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
£3.5 million
Reduction in monthly risk exposure
100%
Increase in contra-check completion

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Firstsource is a leading provider of customised Business Process Management (BPM) services. We specialise in helping clients stay ahead of the curve through transformational solutions in order to reimagine business processes and deliver increased efficiency, deeper insights and superior outcomes.

We are trusted brand custodians and long-term partners to 100+ leading brands with presence in the US, UK, Philippines and India. Our ‘rightshore’ delivery model offers solutions covering complete customer lifecycle across Healthcare, Telecommunications & Media and Banking, Financial Services & Insurance verticals.

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