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CAPITAL MARKETS

Intelligent Process Automation Leads to Fast and Accurate Compliance Screening of Bond Investments


The Challenge

Institutions investing in private bonds on behalf of pension funds and high net worth investors must accept complex contractual agreements and parameters for approved types of issuances. Meeting these terms of contract and remaining aware of the changing financial services regulations are difficult tasks. Making mistakes is a costly process that can result in both financial and legal risks.

A global financial services organization wanted to improve its internal compliance process to ensure that private bond issuance for its high net worth investors aligned with the contracts established by those clients. The organization’s system for recording and reconciling trades did not readily accept trades for private bond issues, which were infrequent, high-value and unique. This prevented the organization from running standard compliance prescreens on private bond issues. The organization had developed a Microsoft Excel spreadsheet to capture more than 700 different investment parameters set by its clients, along with a datasheet into which bankers would manually import the terms of each new issue. The process was risky, as it was based on individual banker’s knowledge of clients.


Our Approach

Cognizant’s intelligent process automation (IPA) team reviewed with the organization how the terms and conditions of its multiple client investing agreements could be digitally indexed and cataloged in a single database. We developed a formal process to eliminate the manual process—by scanning and converting the characteristics of each individual bond issue into a similar set of parameters. We also used Blue Prism to develop and implement an automated process that compares these datasets and determines which bonds best align with investors’ parameters. The scripted automated agent creates issues in advance, eliminating financial risks and legal liabilities, as well as the organization’s risk of non-compliance.

Leveraging IPA to Optimize the Compliance Process

Cognizant helped the company reengineer its compliance process and complemented its internal initiatives to use IPA for back-office and middle-office business processes to reduce costs. Implemented in four months, the solution resulted in an immediate return on investment. The organization now can model different combinations and permutations of investments to better match bond investments to specific investors’ needs.

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Formalized database

of 700+ different investment parameters set by its clients

Faster, more accurate compliance screening

of bond investments through the use of IPA

Reduced compliance cycle

for individual screens from weeks to a single day


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