Thursday, May 31, 2007

New account opening: as good as it gets?

I've been talking with many coworkers and customers recently about the new account opening problem. It seems that people outside the financial services industry rarely identify a big problem with this phase of a customer relationship, until something goes wrong. After all, what could be so difficult about the process of opening a new brokerage account, buying an annuity, or getting life insurance?

Inside the industry, and depending on who you speak to, the view varies, fitting one of several categories:

  1. Help!!! I'm drowning in paper and my competitors seem like they are a million miles ahead of me.
  2. We've squeezed every last penny out of the process, centralizing our application processing, offshoring the data entry and outsourcing the credit and risk checking
  3. We've made a giant leap to online application forms, which spool out the back of a printer in the backoffice for keying into our current systems
  4. We're better than the others. Electronic forms are actually captured directly into a business application and delivered to a group of people in the back office for processing. We still need to handle paper for signatures and ID, but we think we're fairly electronic
So, if you're at the final stage, everything is great, right?! This has been the view of many US banks and financial institutions for a while - the nirvana of the electronic form and automated process. And other places outside the States are still striving to get to this point as well.

The fact is that Europe is leading a new wave in optimizing new account opening. They've already cut the waste in the process to a level that, in the leading organizations there is little left to save. They've reduced the processing time to a level that customers are comfortable with. What's left?

As we've all seen, there has been a backlash against offshore customer service - we want to hear a voice on the phone line that has a familiar accent and is not distorted by ten thousand miles of cheap copper cable. In fact, many people have shown a desire to pay for personalized service, even face to face. Unfortunately lean, centralized, outsourced processes don't allow that type of familiarity or human interation with the customer. Rarely in fact do they allow visibility into where a customer's new account application actually is in the world.

The optimization of new account opening for the European leaders, and the leading US banks are hot on their heals, is around customer service, personalized attention, and having the customer's information and application to hand instantly on request. This may be why we see a new Citi branch opening on every street corner in major US cities. But without the ability for agents in these branches to get involved in the business processes around their new and most impressionable customers, they'll just be another layer of annoyance between the customer and their new account getting opened correctly.

There is always more to do, so don't sit back on past successes. The rest of the world is getting ready to leapfrog the old-time US customer service reputation.

[UPDATE: By the way, I meant to say that these thoughts are often reflected by The Bankwatch Blog, a constant observer and commentator of banking and financial services globally. For more evidence of what the leaders are doing, take a look]

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A post from the Improving New Account Opening blog

Wednesday, May 23, 2007

New blogger

A great coworker of mine has just started blogging. He is smart guy with a strong technical and business background, which means his blog bias will be varied and interesting.

If you are looking for a new read for process improvement, six sigma and business problems, take a look at Mike Letulle's Full Leverage blog.

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A post from the Improving New Account Opening blog

Saturday, May 19, 2007

Internal controls as important as front-line security

The Bankwatch blog has a quick note on how two-factor authentication and token are perceived as being synonymous, when in fact technology such as PassMark can provide the required second form of authentication required to really judge the authenticity of a person performing a transaction.

Even better though, the post points to an easy to read paper by Ross Anderson, Professor of Security Engineering at Cambridge University. This talks not only about the different types of scams, like Phishing, but the importance of internal controls within financial services organizations that front end technical security supplements.

Everyone that uses online banking sites understands the importance banks place on knowing the true identity of customers. Third-party authentication is the primary means to achieve this with a new customer, by using trusted third-party identification (e.g. government issued ID and credit checks), before issuing a customer credentials (username and password) to use the site. Primary authentication (a customer's new credentials and a second factor of authentication) is used to ensure it is really the person that claims to be the customer making a transaction.

These forms of authentication are the first line of defense and it seems that those banks with poor internal controls typically become the focus for online fraud. Since there is a much lower risk to the criminal that the bank will either notice a problem or be able to recover assets, this makes the effort to get around the primary security more likely to be rewarding. Cyber-crime moves to the easiest target. And when this becomes newsworthy, customers get the impression that their investment is not being well protected. Brand damage is a high price to pay when people trust you with their money.

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A post from the Improving New Account Opening blog

Sunday, May 06, 2007

Six points for business improvement

For the last week I've been surrounded by colleagues from across the globe, many of them long-time experts in BPM, ECM and the many business issues that they often accompany. It was a great chance to hear feedback from sales, implementations, marketing and strategic thinkers, while also trying to communicate to best effect my own experience and visions for the products I manage. Mixed with the chance to announce the imminent release of the next version of one of the products, I've been pretty busy preparing. So that's my excuse for not blogging for a while.

And what came out of all this work? My view of what the biggest issues are around business processes and how to improve them. I might even discuss some of these over the next few weeks.

So in no particular order, here are six areas I believe every organization looking to improve its operations should focus on:

  1. Understand that business processes extend across organizational boundaries
  2. Gain visibility into process performance with meaningful metrics that reflect business goals
  3. Track and manage every piece of work that enters, leaves or is created in the organization
  4. Deliver processes, operations, resources and information as services
  5. Remove waste from processes, don't just "pave the cowpath"
  6. Employ technology that delivers ROI, not just lowest TCO

I'm sure there are many more - feel free to prioritize your own list

Special learning for the week: technology comes last. It is people and their needs that matter.

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A post from the Improving New Account Opening blog