Advancing Client Outcomes Through Technology

Written by: Dee Sommerville, Head of Commercial Banking Middle Office – JPMorgan Chase, and Anish Bhimani, Chief Information Officer, Commercial Banking – JPMorgan Chase

 
Though the client journey may begin with a phone call or meeting, long-term success is dependent on what happens after negotiations are complete and agreements are signed. Specifically, the true measure of success rests in how clients’ needs are handled once the sale is made and downstream implementation and service professionals get to work.

Throughout 2020, our Commercial Banking (CB) client onboarding team executed over 220,000 product implementations across multiple geographic, service and product level complexities. Aligning the right person to the right work at the right time was critical to providing an optimal experience for our clients—but until recently that work had been a relatively manual process.

Historically, our implementation managers relied on a series of labor-intensive, qualitative analyses of teamwide capacity and workload metrics to assign implementations. We knew there had to be a better way.

Last year, our CB Middle Office organization—comprised of teams across client implementation, service and experience—reimagined how to quantify incoming work requests and route them based on attributes such as team member availability, training, and existing client assignments. Shifting to an automated decisioning model would further streamline our operations and advance the overall client experience.
 

From Concept to Realization

Working together, our CB business analytics and technology teams designed, developed, and deployed The Assignment Assistant—an algorithm-powered portal that interprets, quantifies and recommends work allocations based on a multitude of factors and conditions.

  • Using a statistical approach, we identified the key attributes of an assignment and how those factors impacted the way work had historically been allocated.
  • By identifying the most complex attributes of a request, we were able to score and categorize each implementation.
  • This data helped us better understand each assignment’s impact—including effort, duration, capacity and requests currently underway with the same client.
  • We were able to create a holistic view of a team’s workload, enabling us to better field incoming requests and assign them based on resource experience and availability.
  • In addition to streamlining end-to-end workflows, the output provided critical insights and metrics into a task’s relative complexity and requirements to deliver superior outcomes.

 
Feedback from managers who participated in the pilot was extremely positive, with one commenting, “The Assignment Assistant has put data at my fingertips. It’s helped me place the right work with the right resource, faster and more accurately than ever before. The result is a more precise deal assignment flow and a better client experience.”
 

These Three Were Key
    1. We wouldn’t have reached this point without rethinking traditional boundaries and role expectations across functional groups and project teams. Crucial breakthroughs came from business analysts, technologists, data scientists, and operational managers. Innovation is every team member’s responsibility.
    2. A strong data infrastructure was critical to our approach. Companies often have more data than they realize. The key is to harness the power of that data to provide insights into how to evolve your business and provide better client experiences.
    3. Building with an iterative approach in mind was a priority. We designed the platform to enable continuous improvement and technology advancements over time.

 

Evolving with Our Clients

In 2021, we’ll migrate The Assignment Assistant to an enhanced, scalable in-house tool that accelerates our Artificial Intelligence and Machine Learning gains. Building on this cloud-based platform will significantly reduce the time needed to make updates while enabling ongoing improvements through a self-learning algorithm. Complexity is ever-evolving in our business, and this solution will be there to ensure clients and colleagues benefit from the power of technology automation and insight.

We’re excited to support this year’s Windy City Summit, and we hope this sparks creative collaboration across your own teams.

NextGen Treasury: Your Digital Roadmap

Content Sponsored by BMO

Digitizing payments has become more important than ever as organizations look to increase working capital, create efficiencies, potentially reduce costs and minimize risk. Furthermore, the COVID-19 pandemic has pushed many businesses to adopt automation as a way to address these concerns across the broad community of suppliers, customers, and partners.

According to a 2020 survey by the Association of Financial Professionals (AFP), nearly 60% of respondents said their organization was very likely or somewhat likely to convert the majority of their B2B payments to suppliers from checks to electronic payments. Only 5% indicated they have no plans to convert.

Journey to Digital Payments Infrastructure

But what does that journey to implementing a digital payments infrastructure for corporates look like? Susan Witteveen, who heads the Treasury & Payment Solutions group at BMO Canadian Commercial Bank, recently moderated a discussion with three experts to discuss best practices:

  • Robert Lowther, Senior Vice President of Finance at MNP
  • Megan Kells, Head of North American Treasury and Payment Solutions, Product at BMO
  • Matthew Bleecker, Director of Payments Optimization Strategy at BMO

 

View On-Demand Recording of Panel Discussion

This panel discussion took place on February 8, 2021, and is being shared with the permission of BMO.

CLICK HERE to view the on-demand recording or read an edited summary of the conversation.

Three Tips to Help Keep Your Business Safe from Scammers

Fraud is on the rise with the current pandemic, and now is not the time to let your cyber guard down.

Scammers use widespread events like this to take advantage of people and companies, and with so many of us working from home now, it’s important to keep in mind the following safeguards when using online banking sites.

These three tips can help.

1.  Keep employer data secure when working remotely

If you’re using your personal devices when working remotely, be sure to follow your company’s IT department policies and report any suspicion of viruses or computer performance issues to the appropriate authority at your company. Examples include:

  • Reduction in processing speed
  • The computer locks up, reboots or restarts unexpectedly
  • Unusual pop-up windows
  • The computer cannot be restarted or shut down

 

2.  Avoid business email compromise situations

A prevalent ploy known as phishing involves fraudulent communications designed to trick you into divulging personal, financial or account information. These scams can include emails that connect you to fraudulent websites and request personal information.

Phishing emails have also been used as vehicles for malware or computer viruses that silently capture information, such as passwords and user IDs, from the infected computer to commit wire and ACH fraud.

Avoid clicking links in email messages, even if they appear to be legitimate. Instead, make a quick phone call to confirm the email can be trusted or type the legitimate URL into your web browser.

3.  Obtain a secondary form of authorization before making changes that would impact any type of money transfer – check, ACH or wire transfer.

Fraudsters have tried to steal billions of dollars from businesses by posing as company executives and ordering huge wire transfers. These scams can be in the form of emails, phone calls or texts and may refer to specific individuals or business functions such as payroll, human resources and accounting. A common tactic is to convey a sense of urgency and/or secrecy. Often, the emails arrive late in the day, just before a holiday or weekend or when the purported sender is out of the office.

If you receive an email that appears suspicious, be sure to check the authenticity of the email prior to performing any wire transfers. Never act upon changes to payment instructions from an email or fax message alone. Instead, check the validity of the instructions from the requester with another trusted party at the company, using a different communication method.

The above examples are not comprehensive, there are many and varied types of scams out there. While the convenience of online transactions and the internet makes our life easier, we must take reasonable precautions to keep safe. For more information on current fraud issues, bookmark these websites and check back as they are updated regularly:

Scams and fraud attempts are unfortunately on the rise, but by staying vigilant, we can better protect our businesses and our personal data.

This article was reposted with the permission of CIT Group Inc. ©2020 CIT Group Inc. All rights reserved. CIT and the CIT logo are registered trademarks of CIT Group Inc. Deposit and loan products are offered through CIT Bank, N.A., the FDIC-insured national bank subsidiary of CIT Group Inc.

ESG in Strategic Asset Allocation (SAA): A practical implementation framework

Authors: Gunnar Friede, Guido Lombardi, Peter Warken, Jason Chen, Dirk Schlüter, Robert Bush, Francesco Curto, Eric Legunn  

Much research has been made in the past few years about how to integrate ESG in various asset classes; however, ESG research on a total portfolio level—or strategic asset allocation (SAA) level—is still very limited. As a 2019 PRI publication put it, the integration of ESG aspects in SAA “is an area that has received relatively little coverage about what it should mean in practice” 1 

This study seeks to address the current blind spot of research to further facilitate ESG integration comprehensively at an overall multi-asset portfolio level. The specific objective is on (i) understanding the potential impact of integrating ESG factors on risk-adjusted returns, (ii) what is the best approach to pursue to minimize impact. Our analysis concludes that it is possible to have portfolios that reduce significantly ESG risks without meaningfully different risk-adjusted returns vs traditional index SAAs at relatively low levels of tracking error (“TE”). We estimate that the optimal ESG impact can be achieved for TEs between 75 and 100bps, although an investor’s preference between their risk budget and ESG utility function will determine their appropriate trade-off between these two measures. Other findings:  

  • ESG integration can be run for either individual asset classes or at a total portfolio level. The combined approach (optimizing the SAA and implementing via ESG indices) is the most efficient approach from the standpoint of total ESG utility versus tracking error.  
  • Basic integration optimized across regional indices, sector indices, and ESG Indexes provides different levels of ESG 1 Principles for Responsible Investment. (September 2019). “Embedding ESG Issues into strategic asset allocation frameworks: Discussion paper.” improvement that depends highly on index/fund selection. The impact can vary from a reduction of 10% to F-rated (highest risks) stocks and carbon intensity to as much as 80% and 50% respectively for the same tracking error of 25bps.  
  • Changes in regional weights (e.g. having much more Europe vs the US than in the standard market-cap-weighted portfolio) improves the portfolio ESG characteristics only slightly. 
  • Better (ESG) results can be achieved by constructing the SAA with traditional sector indexes instead of regional ones.  

Much better results can be achieved overall by allocating to ESG indexes. In this latter case, the share of worst ESG-rated securities 2 can be reduced by ca. 80% and the carbon footprint by 50% vs the traditional SAA – for tracking errors as low as 0.25%.  

In the spirit of simplicity and wide applicability, our work has been focused primarily on liquid global asset classes for which there exist a replicable set of underlying indices. As such, we established this framework by leveraging readily available passive ESG indices, which we find sufficient in achieving the various parameters such as climate risk alignment. While we recognize that alternative asset classes and instruments can play a significant role in enhancing the ESG characteristics of a strategic portfolio, this framework is focused on presenting an intuitive, implementable solution for liquid asset allocations. 

This article was reprinted with permission. Read the full paper here. 

 

1Principles for Responsible Investment. (September 2019). “Embedding ESG Issues into strategic asset allocation frameworks: Discussion Paper. 

2Ratings are based on the DWS ESG Engine. See appendix for more details. 

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