£130M reduction in risk exposure at UK bank’s invoice finance division

The challenge: To make it less costly and risky to serve clients well

One of the UK’s largest banks provides invoice finance solutions to thousands of clients, servicing 30,000 lending transactions a day.

The bank’s invoice factoring and discounting operations ran on inflexible, legacy platforms and mainframes. The client-service team had to use 26 different “green screens” for account maintenance, cash allocation and risk management.

This culminated in: process bottlenecks, limited visibility into risk exposure and poor operational health.

And the processes were so clunky that the bank averaged 60 complaints a month.

The solution: Intelligent Automation to integrate, standardize and simplify

To improve the client experience, Firstsource worked with the bank to make it simpler for employees to manage various stages of invoice finance processes.

We implemented an automation-based solution designed to integrate multiple systems, create new interfaces and reduce complex processes. 30 were improved with Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML) and good old fashioned workflow improvement.

By identifying bank’s most manually-intensive activities and replacing them with simpler workflows and helpful automations, a number of crucial steps improved including:

• Unstructured data was automatically extracted from emails and PDFs and integrated throughout the process
• Debt verification in the factoring division was completed through entirely automated email campaigns
• Sales ledger reconciliation was automated in invoice discounting
• Risk management activities like aged and over-credit limit calculations were automated
• Month-end risk analysis of sales ledgers and creditors is now automated, applying client rules for funding decisions
• Activity flows were streamlined based on queues with case management and workflow solution

And all this data is now available to leaders to understand how the operation is performing in granular detail.

Solution rollout process

To develop fit-for-purpose automations Firstsource took the invoice finance division through a thorough Discovery process. This helped us to quickly identify 30 processes with high-opportunity for automation.

Test and Launch approach introduced first automations in a phased manner and allowed for colleagues to be trained on new processes. Afterwards, the full solution roll-out only took a few months to complete.

The result: Lower risk exposure and a better client experience that’s more efficient to deliver

75% of automations were deployed within six months. Within 12 months, the bank estimated Intelligent Automation gave them the equivalent benefit of 93 full time employees (FTE).

The bank’s annual risk exposure owing to inaccurate reserves was reduced by over £130M ($170M). This was underpinned by 100% contra-check completion, up from 40% before automation, and reducing monthly risk analysis from 20 days down to just 3 days.

The whole operation also ran more efficiently with a 40% reduction in turnaround time on reconciliation processes. Payment accuracy rate also increased to 99.6% (up from 98.3%) and accuracy of cash allocation reached 99.8% (up from 98%).

The client experience also improved dramatically. The bank’s Net Promoter Score (NPS) went from +31 to +45. And customer complaints went down considerably from 60/ month in 2016 to 8/month in 2021 — that’s an 87% reduction in 5 years.

All this with a 25% reduction in cost-to-serve equal to £20M ($26M) over 10 years.

To learn more about our automation solutions for invoice factoring and discounting check out our invoice financing solution.