Contributed on February 8, 2016

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3 Use Cases for BPM in the Banking Industry

Description

Customer service is the number one driver of customer acquisition and retention in the banking industry. BPM and Decision Management can help you serve your customers faster and more intelligently, all while driving efficiency and optimization into end-to-end processes.

This presentation covers three use cases for BPM in banking:
– Loan origination
– Fraud detection and compliance
– Customer care and insight

Utilize these resources to learn more about these use cases or explore other ways that banks can benefit BPM and Decision Management:

Video series: Smarter Process for Banking ibm.co/1D9RXVz

Whitepaper: Smarter Process in the Age of the Customer ibm.co/1Dy8gJQ

eBook: Smarter Process for Dummies ibm.co/1zbo4T1

Transcript

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USE CASES FOR BPM IN
THE BANKING INDUSTRY3
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Time to open a new account in retail banking
5 minutes – best
76 minutes – worst
Availability of loan funds
2 days – best
37 days – worst
Time for conditional mortgage approval
15 minutes – best in class
4 hours – median
There is a widening gap between the best
performers and the worst performers
in banking operations.
Source: Boston Consulting Group, The “New New Normal” in Retail Banking, 2012
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Yet, customer service is the #1 factor for both
customer acquisition and retention in banking.
Source: Boston Consulting Group, “Customer-Centricity in Retail Banking”, 2012.
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Top performers are serving customers faster
and more intelligently,
and are better positioned to take advantage of
opportunities afforded by
mobile, social, cloud & analytics.
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So, what lies behind their success?
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They’re banking on
BPM & Decision
Management.
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“BPM today plays a critical role in driving
customer experience initiatives…from
companies looking to overhaul customer
service processes to companies seeking to
deliver more compelling experiences that
incorporate big data analytics and real-time
guidance.”
Source: The Forrester Wave: BPM Suites, Clay Richardson & Derek Miers, 2013
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How are BPM and Decision Management
driving better banking?
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Process-Led Transformation in Banking
Customer Focus
and Innovation…
…driven by data
analysis & behavioral
insight
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Customer Focus
and Innovation…
…driven by data
analysis & behavioral
insight
Streamlined
Operations…
…through process
visibility &
optimization
Process-Led Transformation in Banking
11
Customer Focus
and Innovation…
…driven by data
analysis & behavioral
insight
Streamlined
Operations…
…through process
visibility &
optimization
Increased Speed to
Market…
…implement policy
changes in real-
time, not weeks or
months
Process-Led Transformation in Banking
12
Customer Focus
and Innovation…
…driven by data
analysis & behavioral
insight
Streamlined
Operations…
…through process
visibility &
optimization
Increased Speed to
Market…
…implement policy
changes in real-
time, not weeks or
months
Reduced Risk and
Costs…
…via and accurate consistent
enforcement of guidelines
Process-Led Transformation in Banking
13
Customer Focus
and Innovation…
…driven by data
analysis & behavioral
insight
Streamlined
Operations…
…through process
visibility &
optimization
Increased Speed to
Market…
…implement policy
changes in real-
time, not weeks or
months
Reduced Risk and
Costs…
…via and accurate consistent
enforcement of guidelines
Improved Regulatory
Compliance…
…increased
transparency and
comprehensive audit
trails
Process-Led Transformation in Banking
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So how does it
work?
Here are 3 practical
use cases.
Loan Origination
Fraud Management and
Compliance
Customer Care and
Insight
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Example 1:
Loan Origination
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Benefits of BPM for Loan Origination
Provide individualized financial advice during credit application
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Benefits of BPM for Loan Origination
Provide individualized financial advice during credit application
Deliver a more personalized customer experience
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Benefits of BPM for Loan Origination
Provide individualized financial advice during credit application
Optimize cross-selling to drive share of wallet growth
Deliver a more personalized customer experience
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Benefits of BPM for Loan Origination
Provide individualized financial advice during credit application
Optimize cross-selling to drive share of wallet growth
Improve risk management
Deliver a more personalized customer experience
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Benefits of BPM for Loan Origination
Provide individualized financial advice during credit application
Optimize cross-selling to drive share of wallet growth
Improve risk management
Make smarter decisions in real time
Deliver a more personalized customer experience
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ZUNO BANK AG
Vienna, Austria
Challenge
Build a loan application process to achieve
end-to-end process control and higher
automation rates.
A dynamic business process management
platform to facilitate loan processing
Benefits
• Business-oriented solution with a quick
implementation process
• Increased efficiency in handling
voluminous transactions
• Reduced processing time due to higher
automation
Solution
A BPM solution that facilitates a robust
process flow from an internet originating
loan application until the final account
opening in the core banking system.
Complex IT environment (internet banking
site, multiple internal and external
databases, a business rule management
system for credit decisions, a core banking
system and a data warehouse).
IBM and IBM Business Partner MOViLES
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Example 2:
Fraud Management and Compliance
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Monitor transactions in real-time to identify and take action on
suspicious activity
Benefits of BPM for Fraud Management
and Compliance
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Monitor transactions in real-time to identify and take action on
suspicious activity
Accurately assess the threat level in relation to customer impact
Benefits of BPM for Fraud Management
and Compliance
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Monitor transactions in real-time to identify and take action on
suspicious activity
Handle a variety of transaction types across multiple channels,
including web and mobile
Accurately assess the threat level in relation to customer impact
Benefits of BPM for Fraud Management
and Compliance
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LEADING RETAIL BANK
Challenge
Improve the effectiveness of risk
management operations while reducing the
daily staff workload.
Rules-based risk management for more
agile banking operations
Benefits
• Automation frees employees to focus on
high-value cases
• Detection more than 200,000 high-risk cases
a day, with appropriate next action taken
• Linkage of risk management and commercial
divisions, providing holistic view
Solution
The bank used a business rule
management system (BRMS) to create a
more flexible and proactive solution.
The BRMS-based solution assists client
managers in the detection and daily
handling of risks, reducing staff workload.
The new solution also moves the bank from
an event-driven approach to a client-driven
approach, providing more relevant
information for decision-making.
By focusing proactively on client information
rather than responding to events, the bank can
manage risk more effectively.
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Example 3:
Customer Care and Insight
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Improve customer segmentation and conduct targeted marketing
campaigns
Benefits of BPM for Customer Care
and Insight
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Improve customer segmentation and conduct targeted marketing
campaigns
Optimize sales processes such as account opening, lending and dynamic
product bundling
Benefits of BPM for Customer Care
and Insight
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Improve customer segmentation and conduct targeted marketing
campaigns
Enhance service processes such as case management and dispute
management
Optimize sales processes such as account opening, lending and dynamic
product bundling
Benefits of BPM for Customer Care
and Insight
31
LEADING EUROPEAN BANK
Challenge
Build a flexible infrastructure that would
deliver a consistent customer experience
across channels and reward customers
with loyalty offerings on demand.
.
Tailored offerings and promotions for
customers, on-demand
Benefits
• Reduced time-to-market for new products
from months to days
• New offers can be created and deployed
almost in real-time
• Substantial cost savings realized through
improved staff productivity and decreased
IT complexity
Solution
The bank built a single repository that
captures and maintains all of its data
across brands and channels, and provides
a 360-degree view of each customer.
With this data, the bank can now quickly
identify the best product to meet each
customer’s needs and develop customer
loyalty offerings based on a customer’s
profile.
Creating a single view of each customer enables
the bank to rapidly build new products and
promotions.
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Putting BPM and Decision Management into
Practice at Your Bank
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SMARTER PROCESS…
is IBM’s approach to Business Process
and Decision Management.
We’re focused on helping your
business put the customer first, all
while driving efficiency and
optimization into end-to-end
processes.
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Experience. Our install base
includes over 5,000+ active
implemented customers and 800+
business partners
Market Leadership. We are a Leader in
Gartner’s Magic Quadrant for Intelligent
Business Process Management Suites
and in the Forrester Waves for BPM
Suites and Dynamic Case Management
Expertise. Our Global
Smarter Process Center of
Competency puts more than
650+ experts at your disposal
Why
IBM?
Here’s
Why…
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“We now have tools to map out, study and
improve all of our processes. They are user
friendly and logical. I’m excited that we’ve
embraced the BPM technology and culture
that supports the way we want to manage our
business.”
Source: LaTeca Fields, Business Analyst-Specialized Support Services, Lincoln Trust Company
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Video series: Smarter Process for Banking
ibm.co/1D9RXVz
Whitepaper: Smarter Process in the Age of the
Customer ibm.co/1Dy8gJQ
eBook: Smarter Process for Dummies
ibm.co/1zbo4T1
Bank on IBM.
Learn More About Smarter Process for Banking…
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