The Intersection of Technology and Growth

The Intersection of Technology and Growth

ROBOTICS

February 2019

2 ROBOTICS

CREATING BETTER OUTCOMES

Rattled by intense pressures on growth, investment institutions are

facing a high-stakes test of strength when it comes to their future.

Tinkering with strategies is no longer enough. To stay ahead of the

competition, firms must be bold.

In an unforgiving environment, investment institutions are laser-focused

on emerging tech tools as the new drivers for growth. In our annual

Growth Readiness Study,* nearly half (48%) of respondents recognize

emerging technology as the top enabler of growth over the next five

years. This is up dramatically from 18 percent just one year ago.

Decision-makers are putting tech upgrades ahead of other routes to

growth, such as strengthening in-house investment expertise or even

increasing investments in new asset classes. Those leading the pack are

taking a fundamental look at their strategies and the transformative

technologies that will set their business on the path to success.

One way firms are building their digital future is through robotic process

automation (RPA). Following rules-based tasks, robots become virtual

resources that execute programmed activities like gathering, collating

and validating information, performing certain calculations and

generating reports. They can even alert teams to take action. And an

RPA solution can be quickly integrated into a company’s existing

systems without interrupting underlying technologies.

BUILDING ON OUR DIGITAL FUTURE WITH ROBOTICS

At State Street, we’re using RPA to enhance the quality and speed of

processing client deliverables, and to reduce risk by eliminating manual

processing. It’s also helping free up resources from labor intensive, re-

petitive tasks so that we can focus more time and attention on higher

value-add activities for our clients.

A core component of our business strategy, new technologies are help-

ing us achieve our end-to-end vision. RPA has been an important part of

this plan as we refine workflows and create an environment that facili-

tates straight-through processing.

As we think about new ways to standardize the investment lifecycle,

mechanisms such as robotics help us create greater efficiencies and im-

prove accuracy. RPA allows us to streamline operations, accelerate de-

velopment of artificial intelligence, reduce risk and improve the client ex-

perience.

Our mission is to help our clients achieve better outcomes. By fortifying

our technology foundation, we’re building systems and platforms that

create new routes to growth.

*The State Street Growth Readiness Study 2018 was conducted by Longitude Research in

July and August 2018. Respondents included 516 industry executives from 20 countries,

spanning investment, operations and distribution roles, and representing institutional asset

owners, asset managers and insurance companies.

57%

More than half of the

respondents in our survey

said RPA will be a high

priority for their business.*

4 ROBOTICS

Q: What is the value of robotic process automation

(RPA)?

A: RPA offers virtual resources 24/7 that can perform tasks

uninterrupted and unattended. It has allowed us to improve

our service levels and quality because tasks are executed

consistently and delivered faster. From a risk perspective, it

removes manual activities. Time to market is another big

benefit. We’re able to quickly develop an RPA solution for

our clients as we work to sharpen our own longer-term

transformation strategy.

Q: Can you share some examples of RPA at State

Street?

A. One of the services we provide to our clients is ensuring

the data we maintain on their behalf is consistent with their

broker. Instead of having users download hundreds of re-

ports from a broker’s website, then bring them to a staging

area so our recon engine can pick them up and take action

depending on the findings of the recon activities, robots do

all of these tasks. We free up resources to focus on more

value-added work instead of those repetitive, labor-

intensive activities.

Another example is in corporate actions. Our clients send

us their elections and we need to make sure they are accu-

rately reflected in our internal system. This is an area where

we cannot afford to have errors. The robots pick up the in-

formation from our client and execute these tasks accurate-

ly and consistently.

Q: Where is State Street in its RPA journey?

A. We have assembled a technology and design delivery

team to build out our framework, assess opportunities and

design solutions that support our clients’ needs. We’re us-

ing our core capabilities of process excellence to fix pro-

cesses before we automate them. We’re also working on

use cases that go beyond RPA, and are taking advantage

of more intelligent capabilities such as machine learning.

Q: How are State Street’s people and technology work-

ing together to create better outcomes for clients?

A. We’ve all heard the “doomsday” predictions that robots

will take the place of humans. In reality, automation is help-

ing elevate the role of people in our workforce. Robots are

excellent at quickly performing repetitive, basic tasks and

matching patterns. But they often fail to understand what

matters and why. Humans are able to pick out important

information and discard the rest.

In one instance, we had a team that was spending much of

their time addressing manual data entry issues. With an

automated solution now in place, robots our doing more of

the data-intensive work. As a result, our team is almost en-

tirely focused on working with clients on forward-looking

strategies. This symbiotic relationship is helping us equip

our clients with the insights they need to make better deci-

sions — faster than ever.

Q&A / MICHAEL DEMISSIE

Head of Robotics Transformation and Lean Management

The views expressed in this material are the views of Michael Demissie

from the period ended February 28, 2019 and are subject to change

based on market and other conditions.

5

ROBOTICS IN ACTION / CASE STUDY

Modifying Settlement Dates

CLIENT CHALLENGE

Ahead of plans for a large system

change, an existing client sought an

automated solution to modify settle-

ment dates depending on whether a

transaction was cash or wire.

The client wanted to settle wired unit

subscriptions on T+1, while allowing

cash trades to settle on T+0.

THE RESULT

Four robots continuously operate

and process trade activity for this

client five days a week.

Each day, this automated solution

processes 6,000 trades and makes

approximately 100 trade adjust-

ments.

In total, the automated process has

screened approximately 540,000

transactions and adjusted settlement

dates for approximately 2,500 trans-

actions.

OUR SOLUTION

Using robotic process automation,

we implemented an automated solu-

tion that removed the need for manu-

al intervention, eliminating the risk of

human data entry error:

• Our automated system now

identifies activity posted T+0 and

adjusts activity based on rules-

based tasks

• The client’s trades are pro-

cessed straight through from

when they send their daily trade

activity to when they see trades

on either a T+0 or T+1 basis

This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future

performance and actual results or developments may differ materially from those projected. Investing involves risk including the risk of loss of principal. All information has

been obtained from sources believed to be reliable, but its accuracy is not guaranteed.

There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied

on as such. The whole or any part of this report may not be reproduced, copied or transmitted, or any of its contents disclosed to third parties without State Street's express

written consent.

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