DIGITAL INTELLIGENCE · • Data Sources • KYC Template • Authozaotii rn and ID Web Scraping Data Collection Text Conversion Preprocessing Machine Learning an AI Auto article

DIGITAL INTELLIGENCE DELIVERS OVER 50% EFFICIENCY ACROSS 20 MARKETS FOR HSBC OPERATIONS

REGULATORY EXPERTISE ARTIFICIAL INTELLIGENCE

DIGITAL INTELLIGENCE

© EXL Service, Inc. All rights reserved.

EXLSERVICE.COM

CASE STUDY


Traditionally, client lifecycle management (CLM) processes have been

highly manual, inefficient, and cumbersome. This results in delayed

processes, impacting customer experience and potentially exposing

organizations to financial crime risks.

Know Your Customer (KYC) is an integral part of the CLM processes. The

ever-changing regulatory landscape coupled with the need for vast

amounts of data from various sources further complicate the process of

creating a KYC profile. Typically, analysts research a number of sources

for client information such as formation details, legal IDs, ownership

and key controllers. This collection, assessment and organization of

customer information is manual, repetitive, time-consuming and open

to human error.

HSBC aimed at transforming these manual processes through

automation to achieve reduced turnaround times, higher throughput and

better quality, at sustainable costs. The automation of mundane tasks

would also allow analysts to focus on exceptions and critical processes.

To achieve this objective, EXL leveraged Digital Intelligence to create a

product for HSBC, powered by AI and advanced automation; one with

potential to expand from a KYC and exits management tool to an end-

to-end CLM solution.

Context EXL’s in-depth banking and financial services experience, coupled

with HSBC’s subject matter expertise, helped articulate the problem

statement, design a future state and create a solution in record time.

The first working iteration of the platform was delivered in 10 weeks

The product now supports KYC research for 20+ markets across

Americas, Europe and Asia.

“ Typically, analysts research a number of sources for client information such as formation details, legal IDs, ownership and key controllers. This collection, assessment and organization customer information is manual, repetitive, time-consuming and open to human error.”

2EXLSERVICE.COM © EXL Service, Inc. All rights reserved.


Orchestration KYC research provides client information required to process a KYC

profile. Research is required when a new client is being on-boarded,

during a periodic refresh or when a material trigger is identified. Before

EXL’s digital solution, the process was time-consuming, complicated,

and prone to human errors.

Research analysts previously collected information from at least three

sources per client, reviewed every data element, resolved conflicts,

and arrived at answers for KYC questions. They would then validate

the data and answers using evidential documents which were ranked

by relevance and annotated. These documents would be reviewed for

sanctioned countries, etc. This entire process could take over five hours

per KYC profile. EXL used digital intelligence to create a solution that

addressed the business problem using a combination of automation,

advanced analytics and natural language processing.

The solution currently searches over thirty sources to identify and

ingest client information. It then uses proprietary algorithms to resolve

conflicts and arrive at a set of answers for more than 100 KYC questions.

The tool also customizes the output (data and documents) based on

user roles, region and entity type.

The solution allows the analysts to now focus on critical tasks and

resolving exceptions, rather than the time-consuming tasks of

collecting, ingesting and arranging data.

Once the right information for a particular client was identified using

analytics and AI, the data is automatically aggregated to make it easily

accessible by human employees. Rather than spending their time

hunting down information for each individual client, the platform let

HSBC’s workers focus on resolving exceptions where the information

for a client couldn’t be found, mistakes or other unique circumstances.

The platform uses machine learning to improve itself based on these

exceptions, decreasing the chance of similar errors in the future.

“ The solution currently searches over thirty sources to identify and ingest client information. It then uses proprietary algorithms to resolve conflicts and arrive at a set of answers for more than 100 KYC questions.”

Transformed KYC Process

• Client Name• Country of

incorporation• Ticker

• Data Sources• KYC Template• Authorization

and ID

WebScraping

Data Collection

TextConversion

Preprocessing

MachineLearning an AI

Auto articleclassification

NLP

Data ConflictResolution

SystemsIntegration

Scheduler

• Registration• 10-K, 10-Q• Evidence

Screenshots

Supporting Documents

Name

Matching Algo Aggregated Data

StructuredSummary

DocumentClassification

• Image• Scan• Electronic

Document

• 3rd Party Data• Web Scraped

Data

Analyst Data Collection

Analyst Data Processing

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INPUTCLIENTS PROCESS OUTPUT


EXLSERVICE.COM


EXL (NASDAQ: EXLS) is a leading operations management and analytics company that designs and enables agile, customer-centric operating models to help clients improve their revenue growth and profitability. Our delivery model provides market-leading business outcomes using EXL’s proprietary Business EXLerator Framework®, cutting-edge analytics, digital transformation and domain expertise. At EXL, we look deeper to help companies improve global operations, enhance data-driven insights, increase customer satisfaction, and manage risk and compliance. EXL serves the insurance, healthcare, banking and financial services, utilities, travel, transportation and logistics industries. Headquartered in New York, New York, EXL has more than 27,000 professionals in locations throughout the United States, Europe, Asia (primarily India and Philippines), South America, Australia and South Africa.

For more information, see www.exlservice.com/legal-disclaimer

Outcomes Using EXL’s platform, HSBC could collect the data required by KYC regulations faster and more accurately than ever before. KYC research now takes 90

minutes instead of five hours, with the platform covering approximately 70% of the overall volume of work across 20 different countries. Client exits

only take around one hour instead of four hours, with agents only needing to go through seven steps instead of 35.

The platform provided a solid foundation for HSBC to benefit from a 75% productivity increase in the customer exit process and 100% accuracy rate

for KYC research. HSBC is positioned to be able to scale this platform into an end-to-end solution, capable of portfolio monitoring and flagging of

suspicious accounts among other use-cases. Finally, the elimination of manual tasks resulted in $6 million in savings and enabled the deployment of

personnel to higher value activities.

To find out more about how EXL uses Digital Intelligence to help banks and finance organizations transform, visit this link.

Client Challenge

• Streamlined KYC processes

• Faster customer profiles without sacrificing accuracy

• Simplified ongoing monitoring

• Reduction in manual effort and overall compliance costs

Context

• KYC remains an inefficient, labor intensive, expensive process for most banks despite significant investments

• EXL developed a solution using its strength in banking analytics, deep experience in financial services regulations, and collaboration with its leading industry partner, HSBC

• This solution addresses the accuracy and productivity problems of KYC, simplifies ongoing monitoring, and reduces manual efforts and overall compliance costs

Orchestration

• Banking analytics expertise and data scientists

• Advanced automation to enhance data aggregation

• AI to prioritize information gathering

• Machine learning for ongoing improvements

• Compliance experts focused on exception processing

Outcomes

• $15+ million in savings

• Shortened turnaround time for client selection and exit management processes by as much as 75%

• 80-100% increase in efficiency for data aggregation

• 100% quality

SOLUTION SUMMARY
