Business process management: Does your bank have opportunities to improve branch or back-office operations?Acquisitions have fueled growth for many financial institutions. But, banks that have pursued this path to growth often acquired more than customers and assets in the course of doing so; they acquired multiple ways of doing business, as well. Moreover, in an effort to speed integration and focus on day-to-day services, they often have not taken all of the steps necessary to ensure efficient and consistent business processes across the institution. As a result, many banks still have good opportunities to examine and improve the way they work. How do you know whether your institution is ripe for operational improvement? A good indicator is its efficiency ratio. If your bank’s efficiency ratio is on the high side, there’s a good chance that it could benefit from a closer look at business processes—in both your branch and back-office operations. Finding and leveraging your best branch practicesExamining branch operations requires the ability to take a step back and look objectively at the processes for delivering critical services, such as opening accounts and taking deposits. Across an institution that has grown through acquisition, these processes are likely to differ from one branch to another. In some locations, they are efficient; in others, they may not be. The challenge is to identify the best and most efficient processes in place within your branch network and determine which processes to mandate across your organization. There are several ways to evaluate and identify the best branch processes: - Use financial results to identify a random sample of the best- and worst-performing branches. Then, evaluate and compare key processes in those groups of branches. What do the high-performing branches do differently? And, how does that impact results?
- Follow the process of a typical customer in performing certain activities, such as opening an account. Examine the customer’s entire experience—from signage and literature, to customer service, to teller and platform interactions, to movement between personnel. Where can the process be made more efficient and/or customer friendly?
These types of analyses can help provide an objective view of operations and identify opportunities for implementing more efficient and consistent processes across branches. Boosting back-office productivityBack-office processes are also susceptible to the use of disparate systems or processes to perform a specific task—the result of either taking on new systems as part of acquisitions, or of simply acquiring disparate applications as the institution has grown. For example, it would not be unusual for a bank to have used various processes over time for imaging and archiving documents, such as checks or loan documentations. As a result, it now must utilize multiple processes for accessing those documents when necessary. And, in many cases, these processes still require manual steps. For example, fulfilling a check request often requires one individual to locate and copy the image from correct tape and another to approve the document before the document is sent. Business process management applications can help improve back-office operations by “knitting” together disparate systems and processes—enabling a bank to improve the speed, efficiency, and accuracy with which it can access information and respond to customer requests. West Monroe Partners helps financial institutions focus on and improve growth, customer care, risk management and analytics, and enterprise operations. For more information, please contact Cary Serif,
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