Challenge:

This case study focuses on the analysis and extraction of key performance attributes for exotic asset classes, such as Hedge Funds, Interest Rate Swaps, REITs (Real Estate Investment Trusts), and Private Equity. The overall challenge faced by our client was to train their software engine based on a limited set of 10 documents to effectively process hundreds of complex financial statements. The following specific challenges were identified:

1. Inability to process large and complex statements efficiently.
2. Existence of numerous taxonomies used for similar transactions across various statements.
3. Extraction and interpretation of information from multiple footnotes to derive accurate insights.
4. Prohibitive costs associated with manual operations, making scalability difficult.

First Rate Professional Services Solution:

To overcome these challenges, First Rate implemented a solution that integrated Robotic Process Automation (RPA), Predictive & Cognitive Automation, and machine learning capabilities. The key features of the solution included:

1. Machine learning integration: The software was built with autonomous and assisted machine learning capabilities, enabling it to learn and improve over time.
2. Easy addition of new formats: The solution allowed for the rapid addition of new statement formats with minimal effort, ensuring flexibility and scalability.
3. Data format creation: A comprehensive data format was developed to encapsulate transactions, holdings, securities, and related metadata from raw custodial files.

Highlights of the Solution:

The implementation of the software solution yielded several noteworthy highlights:

1. Auto creation of Security Master: The system automatically generated a security master based on the existing asset classes, reducing manual effort, and improving accuracy.
2. Dealing with multiple data sources: The software efficiently handled multiple data sources through its delivery and automation capabilities, ensuring seamless integration.
3. Intelligent Security Identifier Recognition: The solution incorporated advanced algorithms to recognize and interpret security identifiers, enhancing data accuracy and reliability.
4. Extraction of unstructured data: The implemented algorithms effectively extracted relevant information from unstructured data, eliminating unnecessary data and improving efficiency.
5. Automation of analyst actions: The software's processes were able to mimic analyst actions in an automated fashion, reducing the need for manual intervention.
6. Fully automated reconciliation process: The solution implemented a fully automated reconciliation process that tested incoming data for inconsistencies and identified unusual but plausible situations, such as large one-day gains or losses.
7. Data destination: The system provided a streamlined data destination for the processed information, ensuring it could be utilized for further analysis and reporting.
8. Auditing and accountability: The software included robust auditing and accountability mechanisms, allowing for traceability and ensuring compliance with regulatory requirements.

Conclusion:

By leveraging Robotic Process Automation, Predictive & Cognitive Automation, and machine learning capabilities, First Rate Professional Services successfully addressed the challenges associated with processing complex financial statements for exotic asset classes. The implemented solution demonstrated significant improvements in efficiency, accuracy, and scalability. The software's ability to extract key performance attributes from diverse statements enabled financial firms to make informed decisions based on accurate and reliable data. Overall, First Rate Professional Services software solution revolutionizes the way financial institutions handle and analyze data related to exotic asset classes, providing a more efficient and cost-effective approach for the industry.