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]

Technorati tags: Financial Services Technology New Account Opening process improvement customer service

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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.

Technorati tags: Blog

A post from the Improving New Account Opening blog

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.

Technorati tags: Financial Services Technology New Account Opening phishing internal controls

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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.

Technorati tags: global 360 BPM ECM business%20improvement

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Run better business processes with a BPMS, not a programmer

A few days back, my colleague Steve McDonald asked me a question that went something like: "Do companies need BPMS to make their processes work better, or can you just write custom applications that represent the process?". Well obviously we both have a bias towards the BPMS, but I believe its for good reason - I have wielded a compiler at some point in my career and I can honestly say that the results were 'variable'. So we agreed that having the structure and tooling of a strong BPMS in place allows you to concentrate on the business problem you are trying to solve, rather than the mechanics of writing code and pure custom apps.

Look at any organization and you'll see that business processes do run without a BPMS, as loosely organized paper and email based processes based around a custom Access database application. Many low volume processes that we see in organizations, around processes in HR and Finance for example are commonly run in this way. Making a business case to improve these processes is difficult since it depends mostly on soft metrics like enforceability, compliance and visibility, and taking them the extra step with a complete BPMS may be considered unnecessary.

Now consider a high volume process handling thousands of insurance claims per day. Typically this is a process that has evolved to incorporate human interaction, system to system integrations, paperless operation and fully managed business processes. The business case for BPMS implementation and the measure of its success is metrics like reduced cost and time to process a claim, improved capacity, reduced errors, less customer service call center abandoned calls. These are not metrics that can be achieved without a BPMS – actively executed and managed processes are essential to ensure that the claims process runs like a well oiled machine. There is no room for unnecessary activities to be performed by the process users, either in receiving or delivering work to the right place, or in the oversight to ensure that the process runs as it should.

Attempting to put a process application together out of component parts, a bit of process execution here, a bit integration there, and some loosely defined reporting over the top, is a bit like the factory workers building a BMW attempting to build a luxury car using tools they had brought in from their home garages that morning. Even with a strong process, and great components, who knows whether they would have enough ratchets and the right size spanners to put the car together successfully. I'm sure there would be a lot of use of the 'leather hammer'.

The strength of a BPMS comes from being to apply the management discipline of BPM to the best technology to really ensure that a well oiled process can roll high quality product out the door, and at every stage you can have visibility and control to ensure this happens. Having great visibility over the crew of BMW workers with inadequate tools is probably as unsuccessful as knowing the crew have great tools, but having no idea whether windshields, wheels and brakes have been delivered for them to actually assemble the car. A carefully selected BPMS (not the one you selected to handle 100 travel expense claims a day) can provide the tools and visibility to deliver the business objectives for highly efficient, cost effective and visible business processes.

Technorati tags: BPM BPMS

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Tying together BPM and SOA technology

BrainStorm has been a hot topic this week for the BPM and SOA crowd. Sandy Kemsley blogged about the BPMS vendor panel (which didn't appear to engage her unfortunately), hosted by Bruce Silver. I would have loved to attend the event, which I couldn't (being sat in my office in Boston at the time). But I was interested to weigh in around some thoughts around BPM and the relationship with SOA technology, a discussion that came up with the panel. This is where my coworker Steve McDonald and I mind-melded a bit.

I have been working through releasing an SOA edition of the process, content and case management product I manage, and in doing so have observed many pitfalls that face human-centric BPM products in an SOA technology world. My view is that a BPMS can get caught in the trap of becoming another component of the SOA infrastructure. The SOA view of BPM and process execution demands that a process engine interacts with other systems and executes branched business processes and not a lot else. The BPM gets sucked down into the SOA infrastructure, lost in a Bermuda triangle of web service acronym checklists. Steve constantly reminds me that this is a waste of the capabilities of a BPM and content based product.

BPM software customers agree that the purpose of a BPMS is to control real business processes and enable effective management and improvement of those processes. I believe that processes that have typically been implemented with BPM are readily identifiable as business services and should be treated as such. For example, large insurance companies that have not yet embraced SOA may run multiple variations of an otherwise identical property claims process in a BPM application for different business units. This claims process is a high level business service that could be reused, and the BPMS should enable that. Within this top level process there are services that should also be reusable, for example Fraud Investigation. The BPMS should clearly identify the services, allowing them to be extracted from the core process and reused, moved elsewhere in the organization (or even outsourced). Treating traditional process components as loosely couple services provides this flexibility, but to achieve this the BPMS must understand SOA and be able to interact with the infrastructure.

To achieve this, the BPMS must have some strong SOA capabilities and link back to the infrastructure, without becoming overwhelmed by it. So I think that three requirements are:

• A BPMS must be able to consume services published in service registries, and implemented through ESBs, custom applications and other BPM processes
• A BPMS must be able to host its processes as services for reuse across the organization
• A BPMS must provide visibility across services and processes that extend the boundaries of its own process model. Pulling loosely couple services into end-to-end business processes demands stronger oversight and visibility of performance than monolithic business processes executed by a single system
  

The infrastructure of SOA is important to an organization implementing services and business processes. BPMS must consume the services of more technical components than ever before, should host process based services, and be an enabler for exposing process (and content) services that common data centric SOA components do not handle well.

I think its possible that integration of the BPMS into specific SOA platforms as a complete vendor stack leads to artificially tightly integrated architectures. SOA infrastructure relies on web service standards, and SOA as a methodology demands loose coupling of services and identification of components with separate roles. Integration of platforms into a proprietary stack leads the IT team back to a monolithic architecture, and away from the true objectives of SOA. BPMS and SOA platforms should play together, not be tied together.

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I'd like to thank Steve for voicing some of our combined opinions around this on the panel. He certainly seemed quite excited by the chance to talk about this common theme in a way that obviously, and unashamedly, reflects the strengths of the products we both work with.

Technorati tags: BPM SOA brainstorm

What's in your wallet? The best surveys provide feedback

In the US at least, airline frequent flier miles are the center of marketing efforts for credit cards, hotels, car rental and even restaurants. One of the big marketing campaigns for a credit card mileage program is 'what's in your wallet?' - maybe a credit card accumulating miles with no blackout dates. Since airlines frequent flier programs have become renowned for making it almost impossible to get the free tickets you feel you are entitled to, when you want to use them, does this put people off actually trying to use their miles?

Try this short (one question) online survey to show how you use your miles, and see how you compare with hundreds of other respondents. Interestingly, there is no link back to the sponsoring website (Cheapflights) and nothing asking you to identify yourself. There is no fear of spam, so these guys are relying on word of mouth and good follow up PR to gain any benefit from this survey.

I was happy to do this survey, because it gave me some instant feedback. How many surveys are put out to solicit customer feedback, leaving the customer feeling unrewarded with a 'thanks for your time' but no other feedback. Just seeing the current rating on how I voted alongside everyone else gives a feeling of interactive satisfaction.

Now, I wish it was that easy for me as a product manager to get hundreds of data points to feed into product decisions and better marketing!

Adding BPMN into the fiery mix

Bruce Silver picked up on Keith Swenson's discussion about XPDL v BPEL, which I blogged about yesterday. As expected, Bruce added BPMN into the mix. And rightly so - having a portable modeling notation that describes how drawn processes should be drawn as well as run is an important way to go. BPMN helps business analysts communicate consistently, both with the business they are modeling and each other.

Now when we get to a stage of evolution where execution engines can consume these BPMN models, through XPDL or some other process language, customers will have reached a nirvana in software buying. At this point they can get commodity (cheap) BPM engines that they can plug and play, then rip and replace to their heart's desire. Microsoft is waiting in the wings for this already, though they are proving that they need a little help along the way (see their Business Process Alliance).

Fortunately, by the time complete BPM commoditization happens, some of the real talent in the BPM space will have moved on to even more pressing issues in the business, like gaining visibility across this new multitude of 'appliance' and SaaS process engines. Or providing federation and process enforcement across disparate process engines that make up an end-to-end process. Or providing some other smart system that can help businesses meet ever tougher objectives.

At this point, maybe we'll give business process back to the business, and terms like BPMN, XPDL and BPEL will just be the underpinnings of stuff real business leaders, users and analysts can understand and use to get their jobs done - better, faster, easier. Oh, and all with minimal IT involvement.

By the way, its worth checking out Bruce's post, since he has proven himself to be an expert in the BPMN realm in the past. His discussion is based around the state of play today with BPMN, and makes enjoyable reading.

Technorati tags: BPMN XPDL BPEL

Manage end-to-end processes - don't argue about standards

On the Go Flow blog, Keith Swenson rekindles the debate about the success of XPDL, and obviously draws some comparisons/distinctions with BPEL. In my view both standards have their place, and vendors should avoid trying to quash the one they don't support because their process engine or modeling tool has different objectives its trying to meet. As Keith says:

The biggest misperception in the marketplace is that BPEL and XPDL are in some kind of a war. I have already covered elsewhere how this is silly, so I won’t duplicate it here. I think Jon Pyke’s response makes it clear how these very different standards serve very different purposes.

I put my own (rather lengthy) thoughts into a comment on Go Flow. The key point of my argument is here as well:

XPDL and BPEL have separate objectives and they will overlap at times. At these times it may be better for the organization implementing human and systems BPM to look at ways of pragmatically handling end-to-end processes. Managing the 'federation' of processes, rather than trying to shoehorn everything into a ‘standard’ optimized for different objectives, seems to be the best way to go. End-to-end processes exist all across an organization, and at this point most organizations seem to struggle with gaining even the slightest visibility into what is going on, let alone attempt to model and execute that process within a process modeling or execution language.

Easier said than done? Maybe - but 'process federation' is a real concept that can be attacked from several different directions. Global 360 (my employer) does this with end-to-end process analytics and optimization. There are other approaches that customer can employ that further improve the visibility and manageability of end-to-end processes that cross the systems and human realms.

By the way, don't forget to add your comments to the discussion on Go Flow.

Technorati tags: BPM BPEL XPDL process analytics process federation

Permission to use free online services

Over on The Bankwatch blog, Colin picks up on a note on Seth's Blog about the evolution of advertising. In his discussion, Colin responds to Seth's idea that Google AdSense is effective because it is 'permission based':

Google AdSense is not permission based IMHO. Why? …. because no-one asked me if they could display those ad’s beside my search results. But lets go further … even if those ad’s are relevant, they are only relevant in the minds of the advertisers. I would consider myself a fairly active internet user, and I not only never click Google ad’s …. I don’t even notice them. Google App’s premium, which I subscribe to, does not display ad’s to me.

I think about this slightly differently. Although I wouldn't call AdSense 'permission based', it could be argued that by choosing to use any free service or information source, like Google, Improving New Account Opening, Hotmail or whatever, you are effectively giving your permission to the service to try and make some money from you through advertising.

The challenge for the service is to optimize how effective this is: balance the annoyance of the adverts against the need to get people to click through to the paying advertiser, so they can profit from running the service. This is what in my mind stops advertising becoming too much like TV and radio - with the Internet I always have the choice to go somewhere else.

This blog is admittedly an exception to the real commercial services in this respect. I do run AdSense on this blog and know I'm not going to get rich, but it certainly helps me understand the dynamics of free online services. I get a steady-ish stream of page views even when I don't post, and I get little bursts of ads being clicked some days - split between ads on my most popular posts (most last year) and the home page. My guess is that its not regular readers doing this, instead people stumbling across the site from outside, and looking for the next place to go for more relevant information. It works far more effectively than the prepaid Adify service on the right, which rarely shows anything but my own banner, and when it does mostly unrelated commercial ads that are really just fluff.

Since I started my blog last June, I think I've been credited with approximately $65 US in clicks. The value of some of the ads seem to be reasonably high, to match the business nature of things discussed here. Based on my original aim, I have donated this 65 bucks, and a lot more to Oxfam. And maybe I have helped the occasional reader find something they were looking for related to my posts.

I have posted in the past that the AdSense is a useful model for corporate intranets and knowledge worker applications, helping target user actions with other useful information that may help them complete their tasks or research faster. It was an idea that I'm sure is already offered by the information access vendors like Autonomy and FAST. I think it is almost better than pure search, since it provides a manageable list of results, that are driven by value as well as content on the page, rather than the 3 words entered into Google.

So everyone is encouraged to read my blog, and by doing so they have my permission to get mildly annoyed by the presence of AdSense adverts. I hope that regular readers do not find them too annoying, and that everyone may occasionally stumble across something related that may be of interest to them. I'm not necessarily a good linker to external stuff, and AdSense helps fill that gap!

Technorati tags: google adsense advertising related information