As a product set, treasury management continues to be a source of diversified revenue for banks and, given the focus on non-interest income with falling interest rates, much more of a commodity business. As banks look to innovate new products and services targeted towards corporate treasury functions of all sizes, one area of opportunity is differentiating the implementation and onboarding process.
For many bank clients and personnel, the onboarding process can be somewhat of a “black hole,” lacking vision and oversight into the status of existing implementations as well as minimal forecasting of what may need to be implemented in the coming months. Additionally, institutions continue to rely on paper contracts, wet signatures, manual processes and data entry in order to implement the broad spectrum of treasury products they offer, resulting in long timeframes and multiple client touch points. This, in it of itself, can produce a less than optimal experience for a bank’s corporate clients, especially given that many clients consider the onboarding process a proxy to the level of ongoing customer service that they will receive from the bank going forward.
What are others doing?
Today’s environment calls for speed and efficiency within any onboarding process, especially for treasury products. Institutions looking to gain a competitive advantage are integrating existing and new technology, with a focus on being transparent to the companies with which they are working, and driving down the time required to realize revenue. Some of the steps we see institutions taking include:
- Developing robust customer relationship management (CRM) platforms with a focus on the treasury management sales and support processes
- Creating workflow tools to promote “straight-thru-processing” and manage the implementation process from CRM to support
- Utilizing dynamic, electronic forms that are automatically tailored to each implementation and available through multiple channels, including mobile channels
- Utilizing electronic signatures for all treasury management contracts
- Establishing customer-facing and internal automated dashboards and scorecards to provide transparency into the onboarding process, with a focus on SLAs, KPIs, and metrics for each step
- Integrating data from the point of capture thru the back-office systems
- Developing customer portals for maintenance and new treasury product requests
- Creating new organizational designs and responsibilities that enable more intimate relationship management
- Integrating feedback mechanisms focused on measuring the customer experience
Building a business case.
Any major re-engineering program should have a clearly defined and demonstrated business case. Re-engineering the treasury onboarding process is no different. In most instances, banks can expect a significant investment while developing a new on-boarding process, especially if many of the technologies identified are not currently procured or in use. Depending on the level of re-engineering, the payback period can be anywhere from eight months to two years, with institutions realizing:
- Efficiency gains in the time to revenue of 20-40 percent
- Lower ongoing operating costs, typically 10-30 percent
- Increased scalability to take on additional implementations with fewer staff
- Higher retention rates of their existing customer bases
In many cases, banks have the opportunity to increase new and cross-sell sales by demonstrating improved customer experience and an implementation process that is more efficient than their competitors’ processes.
A measured approach.
Re-engineering the treasury on-boarding process is not a small endeavor. Utilizing a measured approach to identifying and implementing change, such as the high-level approach outlined below, can help speed the success of the program:
- Current-state assessment
- Future-state process design and implementation
- Technology selection, implementation, and integration
- Full roll-out
The keys to this approach are two-fold. First, incorporate existing clients into the process, as they are the best predictor of future client expectations. Second, be very careful to not over-engineer the process. Over-engineering will drive out all expected efficiencies in the process and will hamper the adoption needed across all of the support, front, and back-office functions.
Create competitive advantage.
Given the commodity nature of treasury management offerings, differentiating customer experience during the onboarding process can be a competitive advantage in winning new business. Following a structured approach and utilizing new and existing technology to redefine how a commercial client’s treasury function is introduced to the bank can lead to lower costs, higher revenues, and a longer-term treasury management client.