During a webinar hosted by low-code cloud-based automation platform provider Appian, RJ Rondini in BBH’s alternatives servicing business reflected on the source of the problem:² “We were exchanging information with clients via email, and we were sharing that with internal employees via shared drives and Excel files.” With depositary services straining under the volume of work one thing became clear: they needed to automate tasks to speed up processes. So began the move from email and Excel towards data fluency in alternatives.

This case study article explores how BBH’s depositary services team has adopted new technologies to fix smaller problems that add up to reduce a high degree of manual work in the alternatives space, speeding up processes and reducing risks by digitizing documents, capturing, and translating data to solve breaks, and sets out the steps which other firms facing similar issues may consider.

Scaling automation: The evolution of depositary services

The move toward automation began with depositary services exploring, together with other business teams in fund administration, how new technologies could automate tasks that are outside the remit of core business platforms and that have been difficult to automate, like those in private markets.

In financial institutions, nothing happens in isolation. So, while specific use cases targeted process transparency and documents handling, the end goal is to scale automation, by providing business users with the tools to automate and improve processes and customize day-to-day tasks within a flexible framework of the activity and data required by, or connecting, larger systems. In this way, the automation tools were democratized for people to use to address a specific problem.

With a focus on automating processes, depositary services have evolved the way it works in three development streams, by:

• Digitizing interactions, building interoperability and creating transparency between stakeholders using workflow tools
• Capturing data from these workflows, visualizing them and automating analysis to enable stakeholders to focus on exceptions
• Automating further with customizable apps, enabling business users to focus on value work

These streams are underpinned by a power user model, which guides people, or business users, through user adoption, enabling automation at scale and for multiple asset classes.

Digitizing interactions, building interoperability and creating transparency between stakeholders using workflow tools

Given depositary services’ role in monitoring an AIF, its alternative investment fund manager (AIFM) and other services providers (e.g. transfer agent and fund administrator), the first step was to review how all of these stakeholders interacted with each other and to design a digitized process of asking for and reviewing high volumes of documents and information from these stakeholders. “Like a smartphone digitizes interactions between companies and their consumers and vendors using apps, we want to build the same in depositary services to take in feeds, collect data and show it in a way that empowers business to execute reviews and make decisions more quickly,” explains Baptiste.

The business developed a workflow app to streamline document sharing, storage and review processes in fund transactions between servicing teams. The app guides users through each transaction in a structured framework that also provides the flexibility needed in private markets. All stakeholders have transparency into the document review process, including workflow management between teams, down to who should verify what information, to ensure a quick and efficient review of the transfer of ownership of assets, whilst generating real-time KPIs of the review process. Having access to a client web portal means these stakeholders have access to the workflow app by default.

“We are digitizing the back-end processes and meeting our goal of providing that level of transparency and interactivity to clients thanks to an enhanced front end interface,” says Baptiste.

Ainun Ayub, Head of Alternatives Product Europe and Asia in BBH’s alternatives servicing business adds: “Digitizing enables us to eliminate paper, streamline document storage and provide an accessible historical archive of all transactions in a fund.”

Capturing data from these workflows, visualizing them and automating analysis to enable stakeholders to focus on exceptions

Depositary services also developed dashboards to capture the information from these workflows, providing real-time views of activity status, volumes and exceptions.

The dashboards can be customized by each team and each user. For example, a dashboard that tracks each asset that a client has bought or sold in the fund shows transactions with the number of documents pending review and the documents that are missing, to ensure adequate recordkeeping and the transfer of ownership of the assets.

The dashboard tool can receive information from multiple sources, including third party files. It automates the analysis of high volumes of data, which is then aggregated and presented in powerful visual summaries. At a glance, users can hone-in on the most important focus areas and drill down into the detail to enable highly targeted and efficient interactions with clients and other stakeholders. For example, the depositary services team uses the tool in meetings with other teams to discuss potential issues identified by their monitoring. Instead of correcting any information offline once those meetings have happened, the team can show managers the dashboard and exceptions for their clients during those meetings and capture updates on the go.

“We’re creating multiple dashboards ourselves and regularly update them based on feedback received from our people,” says Baptiste. “Using the tool, we can quickly adapt to feedback or any process or file format change. These modifications do not require Systems experts, the power is in the hands of the business.”

Automating further with customizable apps, enabling business users to focus on value work

Automation is an ongoing endeavor and, since there is so much customization in alternatives, the business users need to decide which tasks are most important to automate as they can vary from team to team and user to user.

Tasks include capturing data from any file format sent by stakeholders, performing a level of enrichment, translation, and validation, reconciling data and managing exceptions in a controlled way.

So, a platform toolkit has been created to enable business users to automate these unique and specific tasks themselves. “Business users can consume data, transform it and automate reconciliations. Those users can make the modifications to the source code themselves using business friendly tools and these changes are instantly implemented,” says Baptiste.

Private market processes need to be flexible to accommodate variability, explains Ainun. “However, it’s not the Wild West, and there is a governance framework with controls embedded in the toolkit and documentation to evidence the process change.”

“In addition, by giving the tools to the business users, we cut out the need to explain a unique business process to a systems developer who then needs to translate it back to the design and build of the automated task.”

The future: More learning for more automation

With the pace of growth in private markets, the relationship between people and technology is changing rapidly. This requires an evolution of skillsets of people to extract the full value of technology. For example, the dashboards toolkit involved learning some basic coding and, in a few clicks, Baptiste had started creating his own dashboards and modifying code to solve for exceptions.

“We can easily adapt the code to the updated source files received or new rules to be applied without having to create a Change Request with multiple layers of approvals and a few weeks/months delay. The time to market for implementing innovative solutions is very short compared to leveraging firmwide systems resources.”

The big challenge is finding the time to work on it, as learning these tools requires a couple of weeks of time investment to really focus on it, he adds. “But people will learn to code because they want to adapt. And the more people who want to learn, the more we create dashboards to solve for manual tasks, and the more other people want to learn to speed up their processes. That’s the future, right?” {<Right>}.