Optimizing New Account Opening - Thanks for listening

I just presented a really enjoyable web seminar about Optimizing New Account Opening, with Dennis Backer from Zarion, and talked about how jointly Global 360 and Zarion can help financial services organizations improve their new account opening processes.

If you were listening (and watching), thanks for spending the time and I hope you found it useful. You'll receive a confirmation from Shared Insights about where this webex recording is archived so you can play it again (Sam).

If you didn't get to join us, but would like to check out the discussion, follow this link to Shared Insights and sign up and they will also provide you information about the recording.

I'll also post a link here when its live

Technorati tags: Financial Services Technology New Account Opening

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Optimizing new account opening

Tomorrow I have the pleasure of jointly presenting a web conference titled Optimizing New Account Opening: Next Generation Solutions for Enrollment.

The highlight of the show will be Dennis Backer from Zarion, talking about Zarion's best practices for new account opening and customer enrollment, based on many years experience work with European financial leaders. Since some people would argue that the European banks and financial institutions are ahead of North America in terms of providing customer-centric services, this should be an extremely insightful discussion.

Global 360 is sponsoring the event, which gives me the opportunity to talk a little about how the Global 360 technology can facilitate many of the best practices that Dennis talks about and how our business and technology focus complement one another.

If you would like to attend the event, please sign up on the Shared Insights website.

Technorati tags: Financial Services Technology New Account Opening

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Managing business processes outside the box

Finally I've had a bit of time to catch up again on some news and blog feeds. As I'm reading I'm noting some of the key areas that could benefit from BPM, ECM and associated analytics that I don't think are well addressed. Treat this as a little brainstorm from me that hopefully will lead to some comments, perhaps from vendors telling me how wrong I am and how they do all this stuff already. So to get going:

1. Basel II - using BPMS to measure the accumulated risk in business processes

Nancy Feig writes in Bank Systems and Technology a nice review of Basel II and its gradual adoption in North America. The spend on Basel II focused analytics software is big, with a large amount of attention being paid to cleansing and importing the data in enormous data warehouses.

I wonder if any thought has been placed on the dynamic side of the business, the capital and risk floating in business processes like loan origination and new business accounts and large transactions, which the data warehouse is weeks away from incorporating into an institution's new credit and risk calculations. This takes true end-to-end process management and analytics that can deliver business metrics rather than the typical business activity monitoring (BAM) tools can - something closer to business intelligence for process, than counting the number of workitems in a process and drawing a bar chart.

2. Project Management - using a BPMS to track progress and provide visibility

Admittedly there are more powerful tools than Microsoft Project out there for complex project planning and tracking, and there are many business processes that are repetitively performed that use Project or Excel for definition and tracking that don't need this level of functionality. These 'process projects' often fall into the bucket that are implemented through combining a number of disparate applications through a written or Excel driven manual process.

Tracking, rather than delivery is something that is often overlooked by BPM. A BPMS can act as an incredibly versatile tracking and status monitoring engine, with the ability to truly manage the monitoring of exceptions, 'illegal' or fraudulent activity, and with analytics provide a true view of the activity and performance of these projects compared to historical data. And when paired with more powerful modeling and simulation capabilities, Lean Six Sigma style process improvement can be easily applied to these under-represented processes.

3. Service oriented architecture (SOA) - for services that aren't automated

A great focus has been put into truly automating the business processes in an organization that can truly be automated: handling B2B transactions; automated decisioning with rules engines; responding to online requests and orders with machine generated information. This is valuable, since these 'process fragments' are often the most repetitive and erroneous when handled by human beings, who generally add little value to them.

Focusing on the human components of processes alongside the truly automated requires some powerful services, integration, content management, modeling and process execution capabilities, if the whole end-to-end process is going to be managed effectively. As many integration vendors wait for BPEL-4-people before really being able to work out how to model the human element of business processes (most treat humans as just another 'system'), and many human centric process tools put an SOA tag on their current poorly performing web services, there is a need for systems that can cater to both.

In doing so 'super-solutions' that blend the requirements of pure automation, human workflow and collaboration alongside services technology enable more seamless systems to be delivered faster. And they can also deliver far better business metrics around what is going on across the whole system, not just the limited portion they manage.


So I've written about three ideas that offer food for thought around the underutilization of BPM. Many organizations have a need for handling of these types of requirements and could benefit from BPM to do it. The issues is that most need a visionary leader to work this out for themselves, since it falls outside the standard pattern of an HR onboarding process, accounts payable or one of the other typical business processes that BPM vendors choose to market to.

Technorati tags: Financial Services Technology BPM Basel II project management soa

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Web service interoperability distracts from business problems

Oh the joys of SOA, web services and technology standards! They don't yet live up to their promise and probably distract businesses from the great improvements that they could make to their operations by having software systems that work together easily.

I've spent the last few days (and nights) brushing up on my understanding of the deepest darkest technology around web services, and the technical underpinnings of Service Oriented Architectures. And at first look, if I ever thought that technology was made complex by self serving vendors wanting to protect their patch, this is one of those times. Web services, and their promise of interoperable systems and simplified integration has led business IT people to believe that software has reached a great nirvana. In fact web services standards just give people another excuse to deeply delve into murky technology weeds and fight battles over often intractable problems that are largely meaningless to the performance of a non-technology business.

I had a great in depth meeting today with the enterprise architects of a large and well known insurance company. It was challenging, since I've had to bring my knowledge of web service standards, XML, SOAP and so on to a level where I can actually understand why the technology works at all. These architects, and many like them are actually translating the vision of XML for representing complex business data into reality. They are pushing XML applied to real business problems; the fact that an insurer represents a person in one way during underwriting and a different way during a claim; the fact that many businesses have different ways of representing identical entities based on the systems they use and the acquisitions of other companies they have made. The fact is that XML can provide a powerful mechanism for unambiguously representing these type of entities, not just for the sake of storage, but to really start to enforce deep rules around the accurate usage and interchange of people's information.

Web services build on the powers of XML for complex data representation, offering mechanisms for effectively transferring it from one system to another, sometimes cleanly, sometime not so cleanly. The problem is that since the beginning of the web service revolution the rules around the application of XML to the problem have been far too lax, and the flexibility of XML to represent almost anything has enhanced this. Open standards frameworks like Apache and even Java have built on their own selected translation, now outdated, so they don't work with Microsoft or IBM's approaches pushed by these superpowers. The outdated approach was not necessarily wrong, but since not widely adopted outside its own space, web services are not interoperable today, and software with a lifespan (and customer base) that doesn't allow completely rearchitecting every 18 months (i.e. virtually every enterprise application) has struggled to keep up. Which means that many of these applications that promise web services are no more interoperable than those that just offer a Microsoft COM interface.

I am starting to believe, based on the discussions I have been having, and the obvious buzz around SOA, that we are reaching a point where the basics are set and everyone is starting to agree. Now the enterprise technology guys will find deeper and more complex problems to pray on in the constant equivalent of the Betamax v VHS wars of yesteryear, and the HD-DVD v BluRay wars of today. Web services are just starting to show promise as enterprise applications catch up - but you can guarantee some extremely smart guys are currently creating some more technology problems that in five years we just manage to resolve.

By the way, my employer, Global 360 is not likely any time soon to have a vested interest in pushing any particular web service standard. Instead it is an adopter of the most broadly used and valuable standards and supporting technology, so I hope this didn't just sound like a rant from a guilty party! Just the rant of a tired supporter of getting technology standards defined and adopted accurately up front so the business knows it works and can benefit from it!

Technorati tags: web services XML enterprise applications

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Metrics for improving insurance

James Taylor has a nice post about the metrics he would consider would offer measurable improvement for insurance companies when deploying a business process management suite (BPMS) alongside a business rules management system (BRMS). I think that his metrics or benefits to the business extend across underwriting as well as claims, which is no bad thing - we know from experience that these technologies work well, so why not target them across the whole lifecycle of the customer?

The business benefits in James' post come after the technology benefits, which I think actually devalues them, but in summary the business should see measurable improvement in the following metrics:

* Fines
* Cost per transaction
* Straight Through Processing rate
* Consistency across Agents
* Appeals
* Reports ordered
* Mail, fax and shipping costs
* Cross-sell/Up-sell rates

James explain his thoughts around each of these in more detail, so take a look at his post for more information.

Now, imagine being able to demonstrate to the business leaders the probable outcome of introducing new BPMS/BRMS technology before the fact. Pre- and post-simulation alongside business metric (not just time and activity metrics, but real dollar values) are core to this and my colleagues at Global 360 are working on providing analytics to help business understand the impact of investments before they make them, as well as measuring their success and potential for improvement after the fact.

Technorati tags: Financial Services Technology analytics insurance business improvement

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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

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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.

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