If banks want to realize material gains in performance, they must learn to work differently. Until they commit to drastically changing their processes by going paperless, scale will be elusive and service levels will drift in a state of costly inefficiency.
Tellingly, 58 percent of people said they believe half or less of the work in their shops is “real” work, according to a survey recently conducted by Cornerstone Advisors. Real work is valuable. The rest, the non-work activity, is waste.
Unbelievable, right? The intense cost, revenue and compliance pressures the financial services industry is facing today means that banks must seek to optimize their processes to eliminate the waste.
Here are three ways to get back to basics and banish the waste.
Identify and own the process
Process design is the key to eliminating waste. However, the challenge is that processes can span across the organization and even cross organizational boundaries.
“A first step in changing the way we work is to have one person in charge of the process—the entire process, not just certain tasks within the process,” says Michael Croal, Cornerstone’s senior director.
To effect the changes necessary to eliminate this waste requires effort and a leader. And the key to success is making sure that leader has a thorough understanding of what the process must accomplish—across the entire enterprise, if applicable.
Redesign for maximized performance
The paralysis-by-analysis trap often catches process improvement teams. Too much time is spent and too much momentum is lost analyzing and documenting the way the process performs. This leads to ineffective process improvement programs.
Instead, try to determine what the result of the process needs to be. Don’t just continue to do things a certain way because they have always been done that way.
Remember what Einstein said: “Insanity is doing the same thing over and over and expecting different results.”
Led by the process owner, an effective process improvement program will include:
- A senior executive that believes in and publicly supports the initiative
- Dedicated resources focused on process analysis, process design and change management
- Metrics to identify issues and drive improvements
- A training program designed for the process and executed to ensure employees are fully trained
Harness the power of technology
As financial institutions begin to redesign their processes, they must realize that these processes have been passed down over years and even changes of leadership. While the technology that supports the processes may have also changed, it is unlikely that the process has ever been engineered for maximum performance from start to finish, leaving expensive technology implementations to be miserably underutilized or incorrectly used.
Technology adds little value if it is not implemented with process performance in mind. It’s also crucial to evaluate the technology used in the process.
For example, most banks own at least one enterprise content management (ECM) system. However, many implementations are not only underutilized, but they’re also incorrectly used. Historically, most financial institutions looked at ECM as a tool just for imaging and reclaiming storage costs by digitizing documents. But there is so much more that they can do than simply scanning, storing and retrieving signature cards and loan applications.
With ECM, banks can automate virtually any manual, time-consuming process in a paper-based world. No more lost or misfiled documents. No more shipping paper loan files between offices. No more worrying about locating documents during an audit.
Banks should view ECM as a technology to leverage across the entire financial institution to automate and streamline processes—from loan origination to new employee onboarding. If an institution has already invested in an ECM solution, the next step is to explore how to leverage the existing technology across the enterprise, including human resources and accounting departments.
ECM is just one technology example that can drastically change the way you work. Until banks commit to drastically changing their processes across the enterprise, service levels will float in a state of costly inefficiency and future growth initiatives will become unrealistic. Banishing the waste is critical for the future of the organization.
And the first step is to stop depending on paper.