Fixing the Back-Office to Improve the Customer Experience
By Michael Sisk
Banks have gotten very good at designing great front-end experiences for customers. In the branch, customers work with knowledgeable tellers behind polished bank counters, and online they navigate sleek web pages. But behind the scenes, there is a vast back-office where banks must manage anywhere from 300-800 processes running alongside aging legacy systems. These are mostly manual processes, involving paperwork and data entry, redundant tasks and siloed systems that often result in errors, glitches, and failures in processing.
Any one of these problems can delay response times, resulting in disjointed, poor experiences—and customers are less and less in a forgiving mood. According to American Banker, 57% of consumers said opening a bank account should take no longer than one hour, and 47% said a mortgage application should take no longer than one day. And according to Qualtrics research, 70% of customers who plan to leave their bank say many minor expectation failures triggered their decision.
To their credit, many banks understand that the front office and back-office are intertwined in the pursuit of customer experience excellence. According to Accenture’s 2018 North America Banking Operation Survey, 74% of bank operations leaders say that customer experience is their top strategic priority. The trouble is, banks are reluctant to overhaul their 20-40-year-old legacy systems because it’s a costly and risky endeavor. Plus at most banks IT is overburdened and loath to take on huge rip-and-replace projects. They have other pressing issues such as front-end products, security, and compliance.
With this in mind, bank leaders might consider these three ways to improve the back-office and thereby the customer experience without a huge capital outlay or Herculean effort by the IT department.
Integrate systems without legacy overhaul
Instead of a huge IT overhaul, some institutions are approaching automation systematically, leveraging web and mobile low-code solutions as a first step along the back-office digitization path. Low-code solutions enable rapid delivery of business applications with a minimum of hand-coding and minimal upfront investment in setup, training, and deployment, providing banks with a simple, fast way to build custom applications with little-to-no help from IT.
Platforms like TrackVia allow industry leaders to digitize key back-office operations via enterprise-grade web and mobile apps customized to their individual business processes that eliminate manual data collection, automate critical workflows, and analyze data to make faster, better informed decisions. Banks that have employed low-code solutions are seeing improved customer experience thanks to a more frictionless process and faster response times.
Such platforms will become even more vital as Open Banking becomes a reality. Open Banking officially launched in Europe in January 2018, and US banks will begin to test the Open Banking waters in 2019. While it may take some time to drive significant adoption of Open Banking principles, many banks are already embracing solutions to connect systems and software in order to improve the overall banking process and customer experience.
Access data to improve the customer journey
The current focus on digital innovation and delivering an optimal customer experience relies heavily on the ability to access and leverage data. According to the 10th Annual Innovation in Retail Banking Report, many financial services firms are taking a ‘GAFA’ (Google/Amazon/Facebook/Apple) approach, leveraging insights and data derived from all corners of the organization, including the back-office, to boost their core business and improve the customer journey.
The need to improve the customer journey and keep account holders happy makes low-code solutions even more critical since they can quickly, easily and inexpensively allow banks to tap customer data in the back-office. Indeed, banks using low-code solutions report seeing improved data integrity and accessibility.
Look for quick, impactful wins
While IT may have a large budget associated with “digital transformation,” there is usually limited IT support to rethink core processes and tackle the kind of individual processes that can deliver wins in the back-office. Because of this, many banks are focusing on quick wins through small automation projects that don’t need much IT support and that leverage existing system architectures while removing friction in back-office processes. Here’s an example:
Stearns Lending, which processes thousands of loans a day, was using manual processes to manage its post-closing operations. This was creating delays, errors, and inefficiencies that tied up capital and hurt the bottom-line. To find a solution, it turned to TrackVia, leveraging the low-code platform to build a custom application within weeks. With its TrackVia app, Stearns automated processes, built personalized task lists, and can track all post-closing functions, data, and activity (down to the loan level and across every stage) in real time. Its newfound visibility and control over post-closing operations
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Even though few customers see the back-office—or even think about it—much of their experience depends on it. For this reason, banks must make the back-office part of their digital strategies. With the right partner, banks can digitize their back-offices, resulting in simple, automated processes that dramatically improve customer journeys.
