BPA Drives L&R Efficiency
For many the financial services industry, there can be confusion between BPA and RPA. Business process automation, known as BPA, has proven most effective at driving efficiency for licensing and registration operations. Robotic process automation, or RPA, is often seen as the ultimate enabler of efficiency, which is true in other applications. Here, we explain the difference.
Process Management v. Saving Keystrokes
Robotic process automation (RPA) replicates human keystrokes in a repeatable process, such that a bot enters data in fields on a screen to create records, and in some cases, completes a transaction. In short, RPA simply takes over what the licensing person is doing today. Business process automation (BPA), by contrast, actually triggers a transaction based on a time-based requirement, an event, or a business rule. Such automated transaction creation, along with management by exception, enables considerably higher efficiency than simply saving keystrokes.
With BPA and straight-through processing, a system can automatically identify an obligation and execute the process to meet it. For example, a system can be programmed to generate license renewals 45 days in advance of their expiration date. This ensures that agents don’t lose their licenses, which avoids the problems and expenses—additional fees—of license reinstatement. When an exception appears, say an aberration in an agent’s background, the system can route it to appropriate departments for review before the renewal is officially submitted.
When licensing management is integrated with a compensation system, it can use an agent’s production data to measure performance. If performance falls short, say against a particular metric, the system could generate that agent’s termination and appointment termination correspondence automatically and hold all actions related to the termination through any mandated notice periods.
BPA manages transactions that are triggered by events on a different system as well. A good example is address and name changes—one of the top reasons that producers are flagged with a regulatory action. Usually an agent will make any such changes in the HR system. When the systems are integrated, say feeding data through RegEd’s Xchange, licensing management automatically generates the required new form amendments and the CCR filing with NIPR. In short, a feed from HR triggers a transaction in licensing, and pushes it out for regulatory action. Data used from different system keeps a firm compliant and reduces the potential for a fine or headache over a simple task.
Rule maintenance is another area supported by BPA. Usually a developer must manually change any rule parameters within a system. With BPA, a system can be configured to allow an administrator to make changes in real times through a simple user interface. A good example is P&C insurers having to manage underwriting company changes for a particular state. With robotic processing (RPA), a carrier would have to make those changes manually or bring in a developer. With BPA, administrator access rights allow changes as needed and the system automatically generates the new appointments and, if necessary, terminates the old ones.
Significant Cost Savings
Just-in-time appointments and straight-through processing are other efficiency drivers. Some large carriers can spend upwards of $50 million a year in appointment fees—a significant sum. The most efficient licensing operations generate appoints on demand at the time new business is placed, avoiding the significant expense to support nonproductive producers. Agents are usually appointed in multiple states during the onboarding process, anticipating they will place business in each. Most carriers can save considerable costs when they enter agents in their systems, issue the writing codes, and automatically generate an appointment, sending it to the state, with no intervention, only at the time it’s required.
More Compliant with Less Interaction
Straight-through processing is a type of BPA that removes human contact in transactions. For example, in licensing, if all conditions and business rules are met, a transaction goes straight through to the NIPR gateway. Renewals are a good use case. The system notifies agents of their CE obligations and asks for background information to be updated. Once completed, renewals are generated and pushed to the state automatically. Say an agent in the northeast obtains a new P&C license in New York. That agent would be appointed automatically once that system receives the information, downloaded through NIPR alerts to the appropriate carriers. Based on the state and that customer’s business rules, there could be multiple appointments. Or, if that same agent were to get another license independently, say to sell health insurance on the side. That agent’s information would likely come in from the PDB, but the carrier’s system wouldn’t generate the appointment, although it may notify compliance about the agent getting a license outside the company’s selling agreement.
To summarize, BPA integrates the front end and enables insurers to update business rules in real time, with no need for development, and the cost savings is significant. RegEd’s Xchange solution leverages BPA to drive such efficiency, speed time to markets, ensure transactions are always in good order, and enables management by exception.
RegEd is the market-leading provider of RegTech enterprise solutions with relationships with more than 200 enterprise clients, including 80% of the top 25 financial services firms.
Established in 2000 by former regulators, the company is recognized for continuous regulatory technology innovation with solutions hallmarked by workflow-directed processes, data integration, regulatory intelligence, automated validations, business process automation and compliance dashboards. The aggregate drives the highest levels of operational efficiency and enables our clients to cost-effectively comply with regulations and continuously mitigate risk.
Trusted by the nation’s top financial services firms, RegEd’s proven, holistic approach to RegTech meets firms where they are on the compliance and risk management continuum, scaling as their needs evolve and amplifying the value proposition delivered to clients. For more information, please visit www.reged.com.