Connect bank operations from front to back

Improve efficiency and compliance while simultaneously lowering costs and risks

Improve efficiency and compliance while simultaneously lowering costs and risks.

At first blush, 20 minutes doesn’t seem like all that much time. After all, it’s less than the typical length of a sitcom (which run 22 minutes) and exactly the same as just one of the three periods that make up a professional hockey game.

But if the context is a banking customer seeking information and a fix for a payment made to the wrong person, 20 minutes can seem like an inexcusably long period of time. Unfortunately, for most banks and financial services companies, it takes at least 20 minutes to pinpoint and gather information customers seek about an outstanding payment.

“If you look at how the payments process is managed right now, the customer could call into the call centre with a question and the call centre only has a subset of the information they need and have to go get the rest,” says Laurén Robbins, general manager for the financial services vertical at ServiceNow. “There are also cases when they tell the customer they have to go into the branch to resolve the payment issue, which is obviously not just frustrating but also not always possible in the COVID world.”

The power of connection

The financial services industry’s prioritisation of customer trust and satisfaction requires digital transformation and innovation that extend from the engagement layer through to the middle and back offices. The lag time between a customer seeking answers and assistance with a payments question and a satisfactory resolution of the problem is just one example of why digital innovation that isn’t end-to-end simply can’t build the customer trust and engagement successful banks of the future require. Another prime example is credit card operations, which provide information customers want about limit increases, card access and the status of card applications.

As bad as it is, the negative effect of relying on disconnected and siloed processes and systems to respond to customer inquiries isn’t just unhappy customers. “What’s the business impact of that 20 minutes? What is that costing you to run your operations in terms of cycle times back to customers,” Robbins says. “What’s it costing you in terms of employee retention and the ability to onboard new employees? It’s a huge, huge productivity hit. It’s a huge cost hit.” Fragmented and manual systems and processes can also expose banks to fraud and the risk of not being compliant with regulations.

But in many ways, these challenges are inevitable in a current environment where, for example, payment information resides in a collection of disconnected, homegrown systems and spreadsheets. Fortunately, a different approach that connects the engagement layer with the middle and back offices at financial services companies has emerged.

A solution based on industry needs

It’s an approach that has grown organically out of the unique needs of financial services companies. ServiceNow, which works with a large number of financial services companies, collaborated extensively with them to pinpoint the specific workflows and business processes necessary to provide the end-to-end transparency so that customer inquiries could be addressed in a way that reduced risks and lowered costs.

What emerged from that collaboration, which included extensive testing and prototyping, was the need for a single platform connecting systems of record and processes across the front, middle and back offices. Take the example of how a fully connected platform slashes the 20 minutes that it might otherwise take to gather the necessary information to resolve an incorrect payment. “Your customer has those digital channels, and they’re all connected to the portal they use,” Robbins says. “Because everything is connected front to back, the customer gets the real-time status of a lost payment and can track it and see where things are. The front office no longer has to call around to help customers find out that status.”

Even when more action by bank employees is required, an end-to-end platform that is fully integrated with a company’s data and workflows makes the follow-up work more efficient and effective. “If your middle-office person has systems coming together in one view, that can trigger work,” Robbins says. “A solution that pulls data and triggers workflows from data houses in core banking systems makes that 20 minutes next to nothing and means employees can focus on resolving the payment.”

Success measured in time saved and lower risk

Other bank priorities that have emerged are improved automation and embedded risks and controls that detect the possibility of fraud and improve regulatory compliance. Much of what makes an end-to-end solution so powerful can be standard for all banks – meaning an improved approach to payments and credit cards is simple and fast to integrate – but also can be tailored to the policies and needs of individual banks. “Those thresholds can be set so that the fraud department can be alerted and any reporting that has to take place for suspicious activity can be done automatically.”

A desire to move away from manual systems was a big reason the largest New Zealand-owned bank, Kiwibank, opted to partner with ServiceNow to bolster automation, end-to-end visibility and efficiency. “We had multiple tools and a lot of manual overhead across operations, front-line and branch systems,” says Kaye Maclean, Kiwibank’s ServiceNow product and platform owner. “We wanted to address those issues end-to-end while reducing our operating costs.”

One of the examples of how a more automated and integrated platform is benefiting Kiwibank is in the realm of regulatory compliance. “By using ServiceNow to manage the front end – the portal, service requests, the workflow and building on those integrations with a master source of data, where ServiceNow is the system of record – we had a predicted saving of over 800,000 minutes per process,” Maclean says. Similar efficiencies over multiple processes have the potential to save a staggering amount of employee time and effort.

Expanding the value of an end-to-end solution is readily achievable, particularly when the platform is specifically built to be compliant with Banking Industry Architecture Network (BIAN) standards. The partnership with BIAN is significant because it means that the end-to- end connectivity the solution provides is built to industry standards. Not only does that mean that it’s easy to integrate the bank’s core systems and fintech solutions, it also means that banks can receive quick value because the solution is plug-and-play.

Importantly, it’s a platform that forms a foundation for future innovation. “This really is our financial services platform of the future that we are delivering all future innovations on,” Robbins says. “We’ve started with retail banking, with cards and payments, and we have a very robust road map to extend into other areas.”