Enhancing Service Quality with Next Generation Business Automation in Banking

Harpreet Dhariwal, Advisory IT Specialist, Information Management Software, IBM India/SA

Issues Forcing Change and Innovation in Banking

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• Organic Growth– Cross-sell leveraging a complete understanding

of the consumer – Use information beyond simple capture and

business processing – Reducing attrition– Faster new product development – Increasing wallet share

• Responding to Customers Requirements – Consistently high quality consumer experience

across all touch points – Build relationships – not transactions

• Security & Regulatory Compliance– Need for consistency and standards– Improved view - 360 degree – data and content,

credit relationships– Authentication, Theft and Fraud

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Business Priorities Have Changed

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“Improving business processes” has been the #1 priority since Gartner started asking CIOs in 2005

2009 Gartner CIO Agenda:

Source: Gartner, Meeting the Challenge: The 2009 CIO Agenda

1. Improving business processes

2. Reducing enterprise costs

3. Improving workforce effectiveness

4. Attracting/retaining new customers

5. Increasing use of information/analytics

6. Creating new products/services (innovation)

Traditional View of ECM

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Scan ----- Store ----- Retrieve

Source: Gartner, Meeting the Challenge: The 2009 CIO Agenda

IBM’s View of ECM

5Source: Gartner, Meeting the Challenge: The 2009 CIO Agenda

Where Can You Benefit From ECM?

High-volume transactions involving paper or electronic documents

Transactions requiring aggregation of multiple or complex set of paper or electronic documents

How & where do you store critical corporate documents?

Do you have agreements for off-site storage and retention of documents?

What are your current records management practices?

Document-intensive collaborative projects

How are policies and procedures created and disseminated internally?

Do you have industry, regulatory or environmental compliance/reporting requirements

Improved decision making

Reduced costs

Increased flexibility/agility

Shortened time to value

Improved collaboration between IT and business

Highlights

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Emerging ECM Application Solutions…

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• New account enrollment

• Case management

• Credit granting

• Customer communications

IBM ECM and BPM Adds Significant Value…

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BEFORE AFTER

Increase profit margins by 7%

Improve customer retention by 4%

Grow market share in Asia to 18%

Innovate new service models

Drive common processes and standards

Example of ABC Organization’s GoalsInefficient processes:

Red - Requires human intervention

Yellow - Wait Time

Efficient processes:Blue - Semi-automated activity

Green - Fully automated activity

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ECM Deployments Transitioning From LOB To Enterprise…

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Signature Cards

Check Image

Statement Presentment

Account Origination

Mortgage Loan Processing

Consumer Lending

Commercial Lending

Credit Card Processing

Trust Administration

Wealth Management

e Mail Mgmt & Compliance

Records Management

Proven Solutions & Value Emerging Solutions & Consolidation

New Account Enrollment

Credit Approval

Case Management

Exception Processing

Compliance Rules Library

Green Banking

Master Content Management

Electronic Safe Deposit

Supply Chain Finance

MarketMaturityMarketMaturity

IBM ECM Banking Scenarios

Customer On-

boarding

• New Customer• Add Product• Request Credit

Card• KYC Checks• Credit Exceptions

Approval

Function

Business Activities

• Online Forms• Case Management• Business

Intelligence• Records

Management

Applicable IBM Product Capabilities

Loan / Mortgage Processing

• Underwriting• Approvals• Awaiting

Documentation• Generating

Correspondence

• Case Management• Office Integration• Document Capture

Exception Processing

• Marginal Credit Rating

• Fraud Checking

• Case Management• Rules Integration• Office Integration

Single View of

Customer

• New Customer• Change of Address• Change of Name• Add new product• Customer

Correspondence• Historical Case

view• Case Management• Content Search• Meta data

indexing

IBM Enterprise Content Management and

Business Process Management Platform

IBM ECM Banking Scenarios

Customer Service

• Rapidly find Customer Information

• Meet Service Levels

• Keep customer informed

• Give a choice of channels

Function

Business Activities

• Online Forms• Document Scanning

• Business Process Timers

• Content Taxonomy

• Integration with messaging systems

Applicable IBM Product Capabilities

Credit Card Loss

• Notification of Loss

• Fraud Assessment• Refunds

• Service Levels

• Interaction with External Agencies (Police etc.)

• Online Forms• Case Management

• Scanning / Email Management

• Integration with Payment Systems

.....

• ......

• ......

......

• ......

• ......

IBM Enterprise Content Management and

Business Process Management Platform

Making the ECM Connection

Reduce errorsEnforce compliance policiesAutomate manual processes

Access real time reportsStreamline workflowTrack documents and cases

ECM solves content and process problems

Decrease costsEnsure complianceRaise productivity

Management metricsSimplify operationsImprove customer service

Which removes the barriers to solving operational challenges

Improve operating marginsProve & maintain complianceImprove competitiveness

Expand market leadershipIncrease agilityImprove customer loyalty

Which helps the organisation achieve higher level goals

Authenticate

Party Backbone

Deep Profile

Service Sales

Cross Sell

Common Fulfilment

Menu “The Basket” (n)

Cross Sell

Instruction

Instruction

Instruction

Inst

Mortgage

Acct

Savings

Insurance

Mortgage

ResultResult

LeadsCustom

er Interaction History

Key Messages

Case Tracking

Needs A

ssessment

MULTIMULTICHANNELCHANNEL

InstructionPerfection

eMailTel

BranchInternet

SMS Post FAX

Who are you?

Who is the customer?

AssessRequest

Patterns&

Events

KYC: Who are you for real?

HowFulfill?

• Update CIH• Manage case• Key Messages

MULTIMULTICHANNELCHANNELNotification / Output Notification / Output

End to end process

Sales / Service RequestFulfilm

ent

ATMService basedService basedOperatingOperatingModel Model -- RetailRetail

Adjust / AddCommon model for:

•Retail•Wholesale•Insurance•HR, •Finance•Etc…

Initiate

Handover

Fulfil

Interact

Sales / Service RequestFulfilm

ent

Service OperatingService OperatingModelModelCurrent IssuesCurrent Issues

Initiate

Fulfil

Interact

Sales Service

There is no commonality across interactive and other channels

Unstructured information is not stored and managed consistently

Where handover paper based not visible or auditable

Information in silos and cannot be easily leveraged across front and back processes

No single support view of end-to-end customer interaction (case) and across multiple dialogues

Service OperatingService OperatingModelModelFuture modelFuture model

Initiate

Fulfil

Interact

CommonContent

Repository

CaseControlMonitor Service

Process is consistent through all channels

Documents are available to all processes increasing visibility and providing context

Any content can be automatically declared as record to ensure compliance

Coordination across processes done at the case level, and can link disparate systems

Case management provides full auditability and end-to-end MI information

Multi-channel interactions have access to complete customer history & documents

Benefits examples

Organisation Business Area Benefits

Bank A Credit Cards – Customer Service, Fraud, Authorisations

27% Overall increase in productivity. Reduced training ramp up time by 6 months

Insurance A Claims Processing Admin per claim reduced by 11%. 8% increase in claim volume with no increase in personnel

Bank B Retail and Corporate Banking Productivity increased by 87%. Decision cycle time reduced from 1 week to 7 minutes

Bank C Wealth Management Services Customer service productivity increased. Request latency reduced from3 days to 1 day

Bank D Customer Loan, Corporate Loan, F/X service

Deposit service, Distribution support serviceProperty Management

$118m annually by centralising processing functions and changing sales/fulfilment ratio from 30/70 to 70/30

“With IBM ECM, we’ve streamlined and optimized business processes to drive a

recurring savings of more than $100,000 annually.”

Fred CookChief Technology OfficerNorth Shore Credit Union

Business ChallengeStreamline business processes so existing staff could manage the increased workload while strengthening customer service.

What’s Smart?Credit Union staff can leverage all forms of information for a complete view of the customer, streamline business processes, and capture documents electronically for easy access and storage.

Smarter Business Outcome$100,000 CAD annual savings due to improved business processes

70% reduction in deficiencies in customer-facing processes

North Shore Credit Union Realizes Significant Savings

Woori Bank Productivity & Service Delivered

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• Automated and streamlined core business processes in over 655 branch locations

• Reduced loan processing cycle times from 7 days to just 3

• $18 million ROI resulting from process optimization and headcount reduction

• Additional $23 million ROI resulting from faster time-to-market

• And, $115 million ROI resulting from increased sales focus

Productivity• Relentless quest for

competitive advantage

• Work smarter, faster, and cheaper

• Reduce operating costs and cost per transaction

• Drive results to the bottom line

Service• Be agile and

responsive to customer and market demands

• Ensure continued customer satisfaction and loyalty

• Turn issues into opportunities

• Grow revenue and top-line performance

“Prior to implementing the solution, our branch office staff spent only 30 percent of their time on customer facing activities such as

sales and customer service. Today, they are spending as much as 70 percent of their time on similar activities…As we are now more focused on our customers, we are able to react much faster to

changing market needs.”

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• Optimize operational efficiencies and control across Singapore to Malaysia hubbing

• Filing, Storage and Retrieval – manual process

• Reduce risk around document misfiling, loss, or disaster

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Challenge

• Uses IBM ECM across 1200 users to hub trade finance, cards, and account services processes

• IBM FileNet P8 BPM, IM, BPF• Enterprise License for 10,000 Users

Solution

Realized a staff cost savings of $2.3 million

Reduced Business Process Cycle Times from 3 days to 4 hours

Effective Team Collaboration & Communication. Improved staff engagement and productivity

Realized $650,000 savings associated to cost avoidance from using fax/courier

Business Benefits

Cost-Driven –Hub/Spoke Model

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• ECM Center of Excellence

• Rollout E-Mail Manager and Records Manager for global email archiving & retention management

• Build shared ECM platform to host multiple projects (as a service)

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Challenge

Solutions

Business Benefits

• IBM FileNet P8, BPM/BAM

• Records Management

• E-Mail Manager

• Document Management

• WPS for SOA

“FileNet has proved to be the right decision for today’s business

challenges.”

— Raphael LamskemperZurich Service GmbH

Compliance Driven

Improved Legal & ComplianceManagement business processes

SOA Shared Services platform to drive down cost through reusability

Drive standards and better adherence to corporate policies

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• “One Bank” strategy to better serve clients

• Legal & Compliance was consolidated under one General Counsel

• IT moved to a Shared Services model

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Challenge

• IBM FileNet P8 as ECM platform for HR e-Files, Accounts, Legal, SAP

• Matter Management for Legal – MS Word and Exchange integration

• BPM for Client ID related work processes

Solution

Improved Legal & ComplianceManagement business processes

SOA Shared Services platform to drive down cost through reusability

Drive standards and better adherence to corporate policies

Shared Services platform for

Personnel, Accounting and Legal

content

Business Benefits

Compliance Driven

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Continued Strong Demand

Traditional ECM Solutions - Proven Value

1,350 Institutions World Wide - With More Than 70% of The Top 100 Global Banks…

1,350 Institutions World Wide - With More Than 70% of The Top 100 Global Banks…

Account Origination

Lending: • Mortgage

• Consumer

• Commercial

• Credit Card

Trust Administration

Compliance

Records Management

E-mail Management

Wealth Management

Next Steps

• Consider …

• Are you fully managing and leveraging your unstructured content?

• Are your key Case Management oriented business processes as efficient as

possible?

• Are you meeting your compliance and legal discovery challenges?

• If not … let IBM ECM see if we can help.

– We have a full range of business needs assessments, including rigorous ROI

development capacity

– Stand-alone assessment or as part of/in conjunction with Information Agenda

BVAs

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