A Smoother Flow of Work for Banks

PNC's John DeMarchis believes he's found a way to remove static from his bank's interactions with customers. The Pittsburgh-based bank is using new flexible and automated work processes to create a world in which customers contact the institution and immediately receive the proper message in the right channel, free of the kind of out-of-date, stagnant content that's inhibited cross-selling and true one-to-one marketing at financial institutions for years.

"It's extremely exciting," says DeMarchis, senior vice president of customer management for PNC. "We view it as having huge possibilities in terms of how we interact with our customers. The performance of mail and telemarketing is deteriorating and those channels are actually irritating consumers. This [new initiative] enables us to deliver interactions the way customers want to see a message, when they want to see it. It's a big part of the future way that we're going to be interacting with customers."

Banks have long spoken about the need to properly match cross sales and marketing to inbound customer service queries without annoying the customer with unwanted products, or even worse, pitching products the customer already has. By using business process management software in conjunction with data management, business intelligence and web services, PNC is automating the mix of manual, paper and data entry-heavy processes that were previously used to retrieve customer and transaction information, analyze it, make a decision on the next move, and deliver that "next move" as a cross-selling addendum to a service query.

The bank's goal is to enable a real-time experience for each consumer at each inbound point of contact. It's a new kind of business process management project (BPM) in which not only labor and slower electronic steps are being automated or streamlined to remove manual processes, but a new layer of web-enabled agility is also being added to the retrieval and delivery of data and tailored content. PNC is not alone - banks all over the world are embracing these new BPM tools and techniques to tackle a variety of challenges, both for customer facing initiatives and back office tasks.

"The more exciting things around business process management right now are the ability to couple customer analytics with things like customer profitability or customer lifetime value measurements, delivering outcomes that are a function of real-time analytics," says Bob Meara, a senior analyst at Celent. "Not long ago, real time analytics was a pipedream."

At PNC, process automation is being used to handle inbound queries and the bank is developing similar capabilities for outbound interaction. DeMarchis says the value is in comprehensive customer service - the new process coordinates all actions from a customer and uses data analysis and business rules to determine "the next best action."

PNC is accessing customer data on a real-time or near-real-time basis and is integrating it into three channels: online, ATM and call center. A decisioning engine examines inbound customer activity, and based on data analytics, automatically makes a decision on a course of action or a message to that customer.

Instead of handing all of the steps in this process manually, which would likely not allow for real time action and info, the different work steps in the customer service process have been automated for speed and accuracy. "We call them customer treatments. It could be a cross sale, a purchase of a new product, or a service, such as 'we've been informed by a merchant that your credit card has been compromised, and we're shutting it down and issuing a new one,'" says DeMarchis.

Pegasystems developed the decision management engine, which the bank has licensed to be the heart of the strategy. The bank is integrating channel platforms to automate the steps between the data analysis and the message delivery. PNC has built a web services layer around the Pegasystems product to integrate with the channel systems.

The Pegasystems solution receives and analyzes customer data and the reason for that customer's contact, and makes a decision on the next action for that customer based on the transaction and personal data. That decision is delivered through the web services layer to the point systems that manage the creative and design for the content delivered to the different channels: on the website, PNC uses HTML and Java-based landing pages; ATM content is integrated into Diebold's campaign technology, and in the call center the bank uses Recommendation Advisor, a Pegasystems customer service product.

Pegasystems describes its platform as a "brain" that automatically informs decisions during a financial process, such as steps during a mortgage loan process, or matching service queries to personalized marketing or sales. The software aggregates and inputs transaction and user data into its analytics engine, then configures the decision-making process uniformly for different kinds of decisions. This way the people underwriting a loan or handling customer service calls, for example, can use the same business rules to ensure continuity in workflow automation across the enterprise. An automatic data technique or form that's been automated for a loan application can also be used for customer service or security. This continuity is also designed to make it easier to update and use more data, and pull information from broader sources, such as internal databases with a long history of customer transactions, or intelligence from unstructured sources such as social network analysis.

"By having this one 'brain,' you can get consistent decisions across channels. So if you have an offer or a risk mitigation in one channel, it's the same at all of the other channels, because all of the channels are connected to the same decision engine," says Rob Walker, vice president for decision management and analytics for Pegasystems, which competes with large tech firms such as IBM and SAP to provide BPM tech, as well as BPM-focused firms such as Colosa and BP Logix.

Previously, PNC would attempt to boost sales for inbound service queries by preloading a predefined list of customers, such as a group of 100,000 customers that were eligible for a home equity line of credit offer, into its CRM system. "That list would be waiting at the contact center for customers to call in and get a recommendation from an employee for that product."

Today, the bank is combining business rules and data to make the decision on special offers and other services at the time of interaction.

"It's really much timelier," DeMarchis says. "And if the consumer accepts a special offer or service in one channel, that treatment is taken off of other channels so there's no duplication of that offer in another inbound session. In the previous world that wouldn't happen, because the customer list was a stale list that was waiting for a periodic refresh."

 

SPEEDING WORK

Business process management is loosely defined, and its meaning is often tailored to specific goals. It typically involves automating and streamlining processes and workflows. In new initiatives, banks are finding emerging BPM tools beneficial in managing otherwise contradictory mandates, such as improving credit risk management through more accurate loan application processing while closing a greater volume of loans faster.

The river that runs through newer BPM projects is the ability to accumulate, analyze, and process greater amounts and sources of data, and turn conclusions from that data into action.

New BPM tools use web delivery of data and other content to work across bank departments, allowing banks to achieve speedier processing for very different business functions simultaneously and in line with business rules.

Since new BPM tools use methods such as web services to connect to different underlying systems, new initiatives can integrate across different departments at a bank. So if the bank decides to change rules or workflow in one department, that change can be more easily applied in another.

"The benefit of newer BPM tools is we can tie them into our back end through integration... and save man hours. You don't have to print and shred paper, so there's a lot of savings all the way around," says Laura Briscoe, director of information services for Stillwater National Bank.

The Oklahoma-based Stillwater just began an initiative to automate more than 120 forms used by employees in 28 locations. It's deploying BP Logix Process Director, which allows users to review historical and current data related to business processes, addresses the performance of current processes, and enables corrective actions. Briscoe says the bank was looking for a browser-based system that could provide rules-based routing, handle complex logic, offer a dashboard with search and proxy capabilities, and be able to integrate with SQL, Active Directory and SharePoint, the software the bank uses to operate its data management, domain networks, and collaboration.

The bank used an electronic workflow for the past ten years. However, "with the old system, we couldn't do an integration between systems," Briscoe says, adding that integration will allow faster upgrades to loan processing and customer service systems, as well as information sharing between systems. The bank is starting to migrate forms ranging from customer queries, credit analysis, loan documentation prep and human resources to BP Logix. The bank is also automating the processes by which employees are registered or severed from the firm.

"The fact that you're retyping data over and over, you have more of a chance for that to become a problem. [We'll now] be able to see if there's anything missing in a document faster, " Briscoe says.

Scott Menter, vp of business solutions for BP Logix, says the tech firm has updated its BPM tools to include new modeling that allows computations on how long a certain step in a process is going to take and how that time impacts other parts of the total process.

According to Menter, this can improve the overall path to automation and speed and is an improvement over traditional flowchart methods used in BPM initiatives. "A flow chart can't say step 123 out of 300 will be two days late, and here's how that tardiness in step 123 will affect step 212. We can now track the history of a certain process to predict what's going to happen with that process down the line and how it will affect the entire [chain]."

 

OPENING UP

New BPM initiatives are also benefiting from open source development. Radoslaw Zak-Brodalko, an ICT Architect at Zagiel S.A., a consumer finance institution in Poland, says the institution was looking for an "easy, lightweight and integrated open source solution, based on open technology" when it licensed Colosa's ProcessMaker. The institution is using ProcessMaker to execute IT change requests; drive the workflow part of the firm's identity management; and automate credit documentation and verification flows, such as complex workflows spanning over several departments.

"Most of the automated processes were done in a 'paper-based' way, without accurate control and optimization. Many of these processes worked as disparate functional modules spread over dozen of systems, thus they were extremely hard to control, manage and change," Zak-Brodalko says.

Zak-Brodalko says BPM technology is installed internally at the institution, mainly for security reasons as well as internal technological abilities. "For us, the most beneficial thing is ease of customization and consistent security management available in on-site installation."

Guarantee Trust Bank (GT Bank), a Nigeria based bank that has recently upgraded its client-server BPM to a web-based version of ProcessMaker, says new BPM techniques have enabled the bank to more easily expand use of competitively necessary e-commerce products such as mobile and web banking by providing the ability for the bank to quickly add new automated processing and approve functions for transactions.

"Because of this new face [mobile and online] of banking, we have to ensure all internal processes are available 24 hours each day to meet the dynamic business operations required by our industry and target market," says Segun Agdaje, a managing director of GT Bank. Agdaje says the bank has gradually upgraded to its current level of 55 automated processes ranging from account opening to daily administrative tasks. This has allowed the institution to upgrade systems to enable 24/7 access for consumers with minimal added IT resources. "Integration with our core banking system implies a reduction in turnaround time for transaction processing...we can also quantitatively measure service level agreements within operational units in the organization, monitor operational growth through transaction volumes and as a by-product, manage our resources, such as staffing gaps, training needs and physical assets."

 

8 Trends in BPM

As the enabling technology gets more sophisticated, experts say BPM can extend across channels and make a deep impact on workflows for the entire organization. BTN spoke to a handful of experts who have researched where BPM is going.

Speed to market. As banks deploy more mobile banking and remote access service, they are charged with doing so quickly. Other major tech initiatives, such as security and compliance projects, are also becoming more time sensitive than in the past. Ensuring consistent workflows and fast deployment can be helpful in deploying new technology initiatives efficiently. "As people go more digital with their banking, BPM can provide a way for banks to seamlessly integrate mobile with other channels," says Wayne Busch, managing director, Accenture's North American Banking Practice. And while old school business process management projects tended to focus on making a specific function or process within a larger organization work more efficiently, new business process management trends portend sweeping enterprise wide projects that enable new digital banking services and marketing initiatives, and develop new ways to streamline internal business functions. "You're not just moving work around, but using some of the more modern tools to reduce or simplify the work that actually has to be touched by employees," Busch says

Big data. New BPM projects are enabling firms to bring efficiencies to data management, allowing banks to accrue and analyze data from a larger set of internal sources and external sources such as social media and pull that information quickly into CRM, marketing and other sales functions. âž› Performance tracking. Busch says one of the main ways new BPM solutions are improving resource use is by tracking processes through the IT network or among departments. "It's not just focused on moving work, but keeping track of it and reducing cycle times and [IT resource] leakage in the process," he says.

Channel consistency. PNC plans to use automated processing and business rules to quickly update activity in one delivery channel and ensure it's reflected in other points of contact. "The real place where these tools will be utilized is in multi-channel experience. So people can start on the mobile phone to research a product, go the web to apply for it and go to the call center for final fulfillment," Busch says.

Payments applications. Banks are pursuing a more electronic payments strategy for both consumers and corporates. But adding more mobile and online options to make payments and manage cash flows is of little use if the processing speed doesn't keep up. "Everything from payments exceptions to customer complaints can be improved by using BPM," says Celent's Bob Meara.âž› Open standards. Analysts say the stress on improving process efficiencies and time to market will further boost open development standards, which more easily integrate with BPM solutions to improve efficiencies in a number of different bank departments. "User interfaces that are more flexible and open can be rolled into BPM more easily," Meara says.

Maturity. While early BPM tools focused on single processes, improvements in the analytical power of the new solutions, as well as their breadth, is causing banks to give BPM a new look. "Firms in financial services are starting to take these tools seriously. Most folks are making investments and the tools are getting big and meaty enough to be recognized for their potential," says Ed Tracy, a partner at Deloitte Consulting.

Change management. By working across departments, new BPM solutions are changing corporate culture along with process and business rules. "It would have been unthinkable years ago to be able to change processes across departments where the overall tech was constantly changing," says Tracy. "You would have had to code something, and build forty to fifty interfaces, and by the time you did that it would have already been obsolete."

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