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How to build a better banking process: BPM for Banking Industry
Apurv Dixit Technical Project Manager – Integrated Transformation Business | February 21, 2020
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The banking industry has become an integral part in the daily routine of the common man, be it paying his utilities or meeting his daily needs. Hence, online banking is the need of the hour. This calls for flawless data security by the banks as they manage public funds and finances.

Meeting customer and regulatory expectations through controlled processes is one of the primary challenges faced by banks today. To manage this, the banking industry needs to comply with the processes defined by the government. The idea is to provide the fastest and most secure services to meet changing customer expectations.

The prime objective of the BPM tool is to achieve flexibility and effectiveness for the banking industry. It is mainly used for process improvement assisted by various technologies. Effective implementation of the BPM tool will lead to automated business operations, e.g. account opening, account recovery, loan processing, and other miscellaneous operational activities. This will also help in increasing the capability of organization and managing workflows. Here are some of the benefits:

  • Streamlining critical processes
  • Making fast decisions
  • Accelerating client management activities
  • Elevating the efficiency of the applications
  • Reducing manual activities, thereby saving cost
  • Providing a complete view of reporting, activities, and duties of responsible departments

Processes can be optimized in BPM, which means that BPM discipline is an ongoing activity that builds over time to steadily improve the measures of the process. Improvement is relative to the goals of the organization, and ultimately in terms of meeting the needs of customers. A person doing BPM must consider a process at the scope of interrelated business activities that holistically cooperate to fulfill a business objective. This is the key difference from a functional point of view where each function might be optimized independently of the other functions. In a complex business ecosystem, it is well known that local optimization will rarely yeild good overall results. A BPM practitioner must consider the metrics of the entire system when evaluating a specific process.

A BPM software can transform banks by providing better control and visibility of its critical processes, improving employee productivity, eliminating errors and enabling fast response time to customers.

The banking industry can adopt the following methodologies for implementing BPM in phases so as to derive maximum benefits:

  • Identification: Existing complex processes spread across departments and systems of the bank need to be identified. This can be done by identifying ‘as- is’ high-level processes and then broadening the scope to sub-processes. While carrying out this exercise, business rules, involved parties, systems, and tasks involved in the process also need to be identified. Once done, the entire process needs to be properly documented as most banks do not have documented processes.
  • Assessment: The next step is to assess the identified processes along with the different parties involved in the process. Factors like the complexity, turnaround time, number of systems involved, and number of tasks must be considered before deciding which process has to be implemented through BPM. Banks also need to evaluate the various BPM tools available in the market according to their needs.
  • Implementation: Banks can start BPM tool implementation with smaller processes, which can be quick wins, and then extend it to more complex processes. Implementation should be in small phases, starting with processes in a department and then extending it to processes spanning across departments.
  • Review and analysis: Banks need to review the result by measuring parameters like the turnaround time for a task in the process, cost involved, and the bottlenecks.
  • Reengineering and improvement: Upon identification of problem areas, banks need to redefine/rearrange the tasks to improve performance (For example, having parallel tasks instead of sequential). The end goal is to reach the to-be stage with continuous assessment and improvement of processes.

Fortunately, BPM can help the banking industry fulfill the needs of a challenging business environment. The software can transform banks by providing better control and visibility of its critical processes improving employee productivity, eliminating errors, and enabling faster response time to customers.