Reaching pinacle of Excellence in Banking
Preface:
The Banking industry worldwide had gone through tumultuous times and evolving their process journey year after year. Large scale technology landscape changes, change in external environment, Stronger regulatory presence and Banking operations on a Global scale are putting up challenges to senior leadership.
Greater competition in the industry also delivered greater value to customers. The new era of banking will be driven by more and more cyber presence and less and less brick and mortar banks. The new model are going to drive the Banks operations and profitability until it stabilizes.
Given the challenges, Banks need to reorient themselves for the Process Excellence journey with the following focus areas.
Customers:
Ever changing customer expectations will drive the banks to invest in new technologies and make their presence felt in the heart and brain of the customers. Therefore, innovations and process improvements will be towards these focus areas,
In line with the Kano model, premium services will draw the attention of wealthy and middle class customers. Banks needs to realign their offerings accordingly
Multinationals and SMEs will seek boundary less banking to deliver services across geographies and suite of products according to their local needs
Investment in next generation technologies which will ensure customer experience are better - Digital Banking Technologies, Block Chain
Making a right choice on the composition of Tech intensive banking Vs. Traditional banking in developing countries where, the migration will take at least a decade
Cost of banking to customers are consistently reduced through innovative products and services
Introduction of Robotics and mini process automations at the back office which will deliver value added services to internal and End customers - RPA, Artificial Intelligence, Machine Learning
Front office operations are completely robotized so that, cost of operations are brought down and customer experience will be better
Banking at non traditional locations, to align with the tastes and preferences of young customers
Competitors:
Since the next generation banking landscape can be driven by so many factors, Banks are looking at ways as to how do they continue to stay efficient? In many countries, the competition sets the new benchmarks and Banks investments in new and emerging technologies will set the ball rolling for the next generation banking.
Virtual banking to Traditional banking - what is the right mix?
Right technology for the right market place - Agrarian, commercial or industrial lending
Understanding customer needs of both consumer banking and whole sale banking customers and deliver suite of products
Cost per transaction, Revenue per customer and other business metrics
Pay back on new technology and how many new customers embraced through new technology
New products, services which will mass migrate customers from the competition
Handheld devices, other products ensuring end to end process delivery to customers
Banking officials have complete customer information on hand, to service customers with required data protection
Regulators:
There is no real need to emphasize stronger regulatory presence across the globe and banks are taking cognizance of such requirements in the following ways,
Improvement initiatives driving stronger Customer Due Diligence reviews and process oversight Example - AML
Fraud prevention and effective detection through improved technology, people processes and internal controls in transactional banking
Excellence initiatives driving Anti money laundering related improvements, Risk based reviews, suspicious activity reporting and host of other areas.
Strong data security oversights and controls improvement projects around customer data, physical access data, Data available in cyber space, Strong access controls to technology systems, Example - GDPR
Effective employee training, compliance and outsourcing controls related challenges
Reduce people centric processes to process centric processes through right use of technology
Projects driving self certification of processes to ascertain level of process health and facilitate scope for improvements - BASEL Norms
The Results:
Technology and process outsourcing delivers a great value proposition both from the Captive/Non captive outsourcing services. They deliver value over a period of time, to support and enhance the operational efficiencies through the following measures.
Excellence projects are directional in the following areas of interest,
Provide insights into customer behavior, improved business outcomes
Projects transforming sanction reviews as per specific country regulations
Improve solvency scores, process metrics through right process interventions
Better data analytics both from Risk and leading metrics at Shared Services environment
Increased use of robotics and automation, to reduce cycle time, improved accuracy and Risk mitigation
Outsourcing to Mini outsourcing to another service provider/NGOs to support CSR while ameliorating risks
These are some of the ways through which Excellence as a Corner stone can be attempted or achieved. These are going to set the industry trends for the existing players as well as for emerging ones.