Business Process Management and its importance in banks

Transcription

1 Business Process Management and its importance in banks Srećko Janjić IT Specialist, IBM Cloud - CEE srecko.janjic@si.ibm.com

2 Agenda A quick product overview Industry & technology trends Focus areas Customer success stories

3 Business process management Aligns an organization s key activities into business processes An integrated approach, involving expertise and technology Enables customers to discover, model, execute, rapidly change, govern, and gain end-to-end visibility Documentation Deployment and execution Continuous process improvement Analysis and optimization

4 Why traditional applications can t completely solve the business process problem Typical process challenges Account administration 1 Customer service 3 Finance and ops 6 Executive management 1 2 Unstructured tasks and communication (for example, paper or ) Inefficient working environment spans systems 2 Invoice reconciliation teams 3 4 Inconsistent prioritization Incomplete or inaccurate data flow between systems Lack of control over system and business events (exceptions) 6 Poor visibility into process performance

5 brings order to the chaos Customer Service Account Administration Finance and Ops Risk Management Teams Executive Management 1. Automate workflow & decision making 2. Reduce errors and improve consistency 3. Standardize resolution across departments 4. Automate and accelerate decision making 5. Monitor for business events and initiate actions 6. Real-time visibility and process control Business Benefits: Huge reduction in manual work and errors Faster, more consistent Issue Resolution Easier to manage the business Better visibility for ongoing improvements

6 IBM Business Process Manager Shared model BPM analysts/ developers Process Designer Integration Designer Integration developers Business Analysts Deploy Business users Business leaders, managers Analytical dashboard Runtimes Process Portal

7 Process and services The picture is the process

8 User interface Process Portal for accessing tasks and starting new process instances Building user interface using the latest web technologies.

9 Dashboards Custom dashboards Out of the box: teams and processes performance Elastic search, Kibana

10 Case management & document management

11 Business rules Internal rule services or external using IBM Operational Decision Manager

12 Industry & technology trends

13 Market forces are transforming the banking industry Tougher Banking Environment Increasing regulation & control Mature markets continue to deleverage Declining profitability Compounded by trust & reputation issues $ Tremendous Growth Potential Banking the unbanked Leverage the SME opportunity Drive new revenue growth through customer centricity Continue to exploit cost efficiencies Smarter & More Demanding Customers Technology explosion More demanding, less loyal customers New entrants will exploit gaps

14 ... while the gap in business operations is widening 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 Source: Boston Consulting Group

15 New forces are disrupting how companies do business $3,26B by 2020 Mobile BPM market to reach $3.26 billion According to the BusinessWire forecast Mobile BPM market will reach $3.26 billion by % productivity improvement 47% growth in cloud processes 100B government savings Socially-enabled processes drive increased productivity According to McKinsey, social technologies, when used within and across enterprises, can raise productivity of high-skill knowledge workers by 20 to 25% Cloud deployments force companies to rethink their processes Gartner ranks Business Process as a Service (BPaaS) as the fastest growing cloud segment with 47% annual growth Big data drives insight into processes McKinsey found government administration could save more than 100 billion in operational efficiency improvements alone by using big data

16 Process efficiency alone is no longer sufficient to ensure success

17 Customer-centric business operations drive top line growth

18 Focus areas

19 Banking on the future Financial services firms are capitalizing on global opportunities by pursuing process-led transformation Customer Create a customerfocused enterprise Complexity Optimize data and leverage analytics to adapt to new behaviors, cultivate trust, and drive profitable growth Increase flexibility & streamline operations Improve operating leverage with variable cost structures that increase flexibility and reduce risk Cost Drive innovation while managing cost Deliver new services quickly that decrease cost per transaction and drive competitive differentiation Risk Optimize enterprise risk management Maximize return on equity, combat fraud and mitigate operational risk while achieving compliance objectives

20 How do banks leverage smarter process? Loan Origination Dynamic product bundling Customer-centric pricing Cross-selling Product recommendation Campaign optimization Customer-centric pricing Sales alerts Offer generation Account opening Best-fit Next best action Servicing & Account Management Customer Care and Insight Core Banking Transformation Integrated Risk Management Payments and Securities Account validation Semantic message validation Least-cost routing Charge calculation Exception handling Fraud detection Anti-Money Laundering Accounting Credit Decisioning Risk Assessment Risk-based Pricing Pre-qualification Automated Underwriting Loan pooling Loan restructuring Risk Event Detection & Management Transaction Authorization Compliance Checking (KYC, FATCA) Fraud Detection Regulatory reporting

21 Loan Origination Deliver a rich, targeted customer experience Provide personalized financial advises during credit application Drive share of wallet growth with optimized cross-sell Achieve truly integrated risk management Build flexible processes and systems; integrate smarter decision making in real time Business Benefits 500% percent faster time-to-market for processing products 14 minutes per night to execute assignment of 200,000 non-payments to appropriate managers Customer satisfaction rate increased from 85 percent to 92 percent in less than 90 days Reduced loan processing time by 33% Reduced nonperforming loan ratio from 12.7% to 8.3% Lowered year-over-year cost-to-income ratio by 17%

22 Fraud management and compliance Monitor transactions in real-time across multiple channels to identify and take action against suspicious activity. Accurately assess the level of threat in relation to customer impact. Monitor various types of transactions (ATM, Remote Banking, Wire/ACH Transfers, Deposits) conducted by internal and external resources across multiple channels e.g. web, phone and mobile. Business benefits Online fraud reduced by up to 90% Saved up to USD37,000 per day for the typical bank receiving more than 100,000 payment transactions Helped banks avoid fines of up to USD100 million by meeting regulatory compliance requirements Saved countless hours by automating transaction screening and enabling nearinstant, real-time results

23 Customer care and insight Improve customer segmentation and conduct targeted marketing campaigns. Optimize sales processes such as account opening, lending, cross/up-selling, and dynamic product bundling. Enhance service processes including case management, dispute management, and eventbased decision-making. Business benefits 30% increase in new customer conversion rate 20x faster implementation of rule changes (hours vs. one month) Personalized offers through any channel Internet, mobile phone, branch and more based on each customer s profile Reduced time to market for new products from weeks to days Improved competitiveness with the ability to flexibly and rapidly evolve offers

24 Customer success stories

25 Challenges Zuno Bank, a Vienna headquartered bank, offers online and commercial banking services for customers who conduct most of their banking on the Internet. Zuno serves the Slovak Republic and Czech Republic. The bank wanted to build a loan application process, based on a business process management solution to achieve end-toend process control and higher automation rates. Solution Zuno bank turned to IBM and IBM business partner, MOViLES for a business process management platform built upon IBM WebSphere Lombardi Edition software, WebSphere Message Broker and WebSphere MQ software. The solution facilitated a robust process flow from an internet originating loan application until the final account opening in the core banking system. The IT environment was fairly complex (internet banking site, several internal and external databases, a business rule management system for credit decisions, a core banking system and a data warehouse). ZUNO Bank AG Solution Components: IBM Business Process Manager IBM WebSphere Message Broker for Multi-platforms IBM WebSphere MQ Benefits A business-oriented solution with a quick implementation processes Increased efficiency in handling voluminous transactions. Reduced processing time due to higher automation

26 BNP Paribas used advanced business rules to automatically customize product offers and fees based on real time customer data. BNP Paribas Business Needs Achieve a 360-degree view of each customer Proactively tailor on-demand offerings to customer needs Deliver a consistent customer experience across all channels Improved competitiveness with the ability to flexibly and rapidly evolve offers based on market conditions and new regulatory requirements Technical Needs Flexible IT infrastructure Single repository for product, channel and pricing data Automated rule-based response capability Every bank provides packages to their customers But we can really target the right product to the right customer. If you can provide the best product for each customer s needs, the customer will be satisfied and will reinforce loyalty with the bank - Vladimir Milojkovic, BNP Paribas Outcomes Personalized offers delivered automatically through any channel based on customer data Reduced time to market for new products from weeks to days

27 VISA Europe wanted to deliver smart and more targeted offers to their merchants. Visa Europe handles up to 8000 credit card payment authorizations per second across Europe. Instant: 3x faster time-to-market to adapt to new regulatory. Insightful: Simplifies the handling of over 10,000 validation policies and 20,000 fee calculations VISA Europe Using IBM Integration Bus, Websphere MQ and IBM ODM, VISA Europe implemented a real time mobile messaging solution that would strengthen relationships with merchants and create a new revenue source. The new platform handles business rules over 500 transaction types in 36 diverse markets. The Solution provides: Ability to deliver more relevant, timely and compelling offers with simple fulfilment options Ability of merchants to increase the rate of response to offers Utilize Visa s solution to foster loyal relationships Creation of a new revenue stream that maximizes real-time analytics capabilities

28 MasterCard invested in real-time transaction monitoring capabilities enabling intelligent and dynamic access to value-added services Processes each payment transaction within 130 milliseconds per request, 43,000 transactions per minute while responding to fraud threats within hours using IBM Integration Bus and IBM Business Monitor Enterprise Product Platform Master Card Trans Blocking Business Rules Mgmt Enhance d Stand- In Controls Underbanked Products Speed new products to market faster Drive greater product efficiencies Promote differentiation and thought leadership Foster innovation using emerging technologies Rolling out effective payment services today and innovative solutions for tomorrow

29 UK Bank A major UK bank with a global footprint has a strategic initiative to document their Retail Banking processes with a view to automate their key customer journeys, enhance the customer experience, reduce costs and deliver transparency across their process landscape with an MI platform which is near-real time and can be trusted. UK Bank Customer Journey process flows The 17 level 1 process are made up of 88 level 2 processes. Discovery owned and executed by the business Process definition and mapping enables identification of common activities across processes Used to prioritise areas for automation taking into account value of re-use. Also used to inform operational organisation design to ensure optimum productivity Process maps overlaid with risks and controls

30 HML Streamlining workflows for incoming correspondence with IBM Business Process Manager HML The need: To meet client requirements for its mortgage administration services, HML needs to process huge volumes of correspondence within strict SLAs which requires an agile approach to workflow management. The solution: HML uses IBM Business Process Manager to orchestrate an end-toend process for incoming correspondence and provide automation, workload management and performance monitoring. IBM Business Process Manager is excellent for managing large numbers of SLAs, because it s easy to build a core process and then add specific rules and variations for different clients. Paul Swinson, Programme Manager, HML The benefit: Award Winning platform built on BPM best in class - Mortgage Finance Gazette / Gartner. Improved response times for customers and Saved 400,000 from reduced manual processing and 150,000 from consolidating processing onto a single platform. Flexible solution enables new functionality to be developed quickly, with no need to invest in additional software. Enabled HML to Win new customers and grow their business in UK & Ireland Solution components: IBM Business Process Manager

31 West Siberian Commercial Bank OJSC Zapsibcombank reduces the amount of time spent educating employees, decreases time to market of new products from a few weeks to one week and increases business process transparency. Client Background: West Siberian Commercial Bank OJSC (Zapsibcombank) is a commercial and retail bank in Russia, that offers investment, leasing and insurance services. The bank has 26 branches, 18 offices and an ATM network of nearly 400 locations. Wes Siberian Commercial Bank Business Need: Employees at Zapsibcombank work with a numerous traditional banking systems, CRMs, business intelligence and various repositories. These systems involved complex business processes, system interfaces, laws and regulations, and learning to use the processes efficiently was expensive. It took a typical employee four to six hours to build an appropriate amount of working knowledge of a system. Gaining agreement on the content and processes of a new product before launching it on the market could take Zapsibcombank weeks or months. This complexity was too expensive for the bank. Goal: establish a simple business process system to reduce the time spent on education and could be used to agree on processes across multiple business departments. Solution: Zapsibcombank built a smarter business process system using IBM BPM and IBM Integration Bus. The bank uses a built-in portal as a simple interface to establish a process center. The software includes the Process Designer tool, which creates process applications in the authorized environment, including the services, tasks and artifacts needed to support execution. The bank can deploy the logical steps of working processes with customers from the process center to the process server. The client uses the Integration Bus to integrate its traditional banking systems with IBM BPM.

32 Major Italian Bank introduces an agility layer to support omnichannel digital transformation Client Background: One of the biggest italian Financial Institution with business operations across the whole country and foreingn operations in Eastern Europe, U.S. and Asia Major Italian bank Business Need: The client needed to implement a new banking platform able to support omnichannel strategy and long term core banking transformation initiatives. Solution: The bank engaged IBM GBS to deliver the new banking platform architecture based on IBM Integration Bus, IBM BPM and IBM ODM that is able to support also mainframe cobol code generation using the same IIB development toolkit as in the distributed environment. Benefits of the Solution: The bank is able to support an end-to-end omnichannel architecture with transactional integrity, perfomances and reduced development cost.

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