Client:

A leading US-based global investment bank.

Challenge:

The client’s operations spanned the entire life cycle of syndicated loans. eClerx provided support on both sides of the table, where the bank acted as an agent on the deals as well as the participant lender. With a rapidly growing portfolio that included 2,000 agented deals, 7,000 participant deals, and a monthly trading volume of 15,000 trades, the client faced significant challenges in enhancing process efficiency and scalability. Some of the key challenges were –

• Feeding credit agreement data into the booking system was a time-consuming, error-prone process, leading to inefficiencies in downstream systems.
• High Volume of incoming participation notices, especially at month-end and quarter-end, resulting in processing delays and the accumulation of past dues.
• Due to increased trading activity in both primary and secondary markets, the operations team struggled to keep pace, resulting in a backlog of trades requiring attention.
• Cash breaks were aging across multiple functions, caused by trades not being closed, pending past dues, and delayed cash settlements from agents.

Solution:

eClerx undertook a comprehensive front-to-back review to drive operational efficiencies by leveraging multiple technology solutions.

Product Solutions

• eClerx implemented a digitization solution, powered by Gen AI, to automate the digitization of non-standardized and complex documents such as credit agreements, drastically reducing manual intervention.
• The digitization capabilities were extended to manage incoming notices. All notices were digitized and indexed to corresponding scheduled events within the central loans workflow, enabling faster processing of payment transactions.
• An automated agent follow-up tool (auto-chaser) was introduced for pending notices, significantly reducing the proportion of notices received after their effective dates.

Tactical Solutions

Deployed tactical tools like Robotics and Alteryx which were utilized to automate and streamline repetitive tasks.

• For trade processing, robotics was used to reconcile lender positions in the booking system with trades in ClearPar and to book trades into the bank’s system.
• Alteryx was employed to identify and match offsetting debit and credit entries responsible for multiple cash breaks. Pending breaks were automatically labelled and assigned to the relevant business units on the same day, expediting their resolution. Enhanced logic enabled the automatic matching of multiple breaks to a single entry, improving the reconciliation process.

Analytics and Dashboards

• eClerx addressed foundational operational issues through root cause and trend analysis. This included analyses related to the creation of past dues, agent-specific trends, and the underlying causes of cash breaks, helping to control operational volumes and improve processes.
• Power BI dashboards were developed to provide real-time tracking of past dues, cash breaks, and pending trades, ensuring transparency into open risks and preventing the accumulation of unresolved items.

Impact:

• A remarkable 50% reduction in the time required to process credit agreement data and unnecessary delays eliminated through the introduction of AI-powered digitization
• Efficiency in processing incoming notices was especially evident during high-volume periods at the end of the month and quarter, as automated indexing and follow-ups resulted in a marked decrease in overdue items.
• 52% to 80% improvement in the daily clearance of scheduled at month-end/quarter-end.
• 80% reduction in past due spillover beyond 30 days
• Trade settlement was achieved at T+7 compared to the industry average of T+13.

Robotics and Alteryx solutions streamlined the reconciliation of trades and resolved complex cash breaks more effectively. Meanwhile, Power BI dashboards provided the operations team with near real-time visibility into past dues, cash breaks, and outstanding trades. These insights strengthened risk management and ensured better prioritization of tasks, ultimately preventing the accumulation of unresolved issues.