Overcoming the Siloed Approach to Customer Management
In order to become more customer-centric many banks have invested heavily over the last 25 years in a range of initiatives aimed at driving improvements in their customer-orientated processes. Whilst the intentions were good, what they have ended up with is a disjointed and siloed approach to customer management. Banks are now finding gaps between the processes they need to connect, such as trades in the front office and settlements in the back, all of which are to the detriment, rather than the benefit, of the customer.
So where typically are customer management problems occurring and what steps can be taken to overcome them?
Exceptions are one of the single largest causes of customer complaints. In most institutions exceptions handling and investigations still involve a lot of manual processes. The processes that drive exception handling are either recorded on paper, outlined in reports or stored merely in the minds of a few individuals across the organisation. With such a haphazard and human element it is hardly surprising that customer complaints are common!
Human error will never be eradicated and deep-seated work habits can prove to be a problem. For example, less diligent staff can cherry-pick work to address the easiest investigations to solve. More complex exceptions are therefore being avoided, which in turn can create wider problems with departments chasing their own targets and not the organisation’s as a whole.
Deep in the back-office handling of exceptions and investigations, it is often easy to lose sight of the customer in favour of shifting work from the in-box to the out-box. Most customers (especially larger corporate customers) expect the occasional transaction to be processed incorrectly and result in an investigation. And it is recognised by many organisations that the customer who experiences a service problem that is promptly and fully resolved may even have a better opinion of the bank than a customer who operates under the radar and never has a problem. However, rather than even approach the situation in this way many banks have simply accepted department exhaustion and investigations backlogs as commonplace.
Disputed transactions are a liability, so traditionally banks have made the dispute procedure as inaccessible as possible. Even with the move to cheaper electronic channels, customers have been forced to commit their disputed transactions to paper to discourage them and keep disputed transactions low.
However, with increasing competition customer service has been seen as a way for banks to gain competitive advantage. Therefore, many are looking to make the dispute procedure more accessible in order to lower dissatisfaction and abandonment rates.
Institutions are also now beginning to permit customers to access investigation initiation and tracking services. Web-based customer self-service systems will offer clients increased transparency in the bank’s internal systems and databases. But to deliver truly outstanding customer service, financial service organisations need to provide linkage across multiple product holdings and associated processes. This means incorporating changes across the whole enterprise from back to front-office.
BPM (business process management) is seen as a solution to bridge the customer management silos, yet it is not well understood and is poorly conceived and implemented by many organisations. BPM is a process-oriented way of thinking about existing IT systems, and of procuring, designing, building and integrating new systems. Implementing BPM requires addressing the business approach first (the methodology); the mixing of business and technology issues second (the architecture), and finally, if and when required, to start thinking about BPM in terms of actual products and technology standards. Banks need to appreciate that BPM should follow a life cycle and not simply be a one-off deployment. To be truly effective banks should benchmark and monitor their customer management processes and then use BPM for optimisation and the continuous improvement of them.
By incorporating BPM across the entire enterprise, organisations can ensure that the appropriate service is delivered to each customer, as BPM can orchestrate different applications in a process allowing a bank’s staff to be far better informed about their customers and be far more helpful. Furthermore, BPM can help banks with workload balancing as managers will be able to adjust the urgency of processing activity in one department based on activity or feedback in another. For example, disputes have typically been seen as a back-office operation, but BPM will allow customer service representatives to process the whole decision seamlessly, without having to kick it back to a different group of people in the backroom. Essentially it is bridging the operational silos – true front-to-back office integration.
By having a more tailored approach, organisations can ensure that they are offering the best possible service and provide actual real-time pro-active customer management. BPM can allow them to orchestrate tasks for employees on the back of specific events that occur. For example, a customer pays £100k into an account, the BPM system then scans and monitors the transaction based on this event and creates a task with a service level agreement for the relationship manager to call the customer and offer them three different investment options from their existing marketing automation. This then drives the processes off the back of the call to make one of the options a reality, (ie, money is invested in an overnight higher interest account etc.)
The main problem facing banks is that many are still stuck in product or channel-centric architectures, which means that it is difficult for them to provide a truly accurate and consistent service. Banks need to structure differently and have the ability to modify processes that better meet customer needs. Only by taking a holistic view of customer management are banks truly going to be able to take the step into effective BPM and be truly effective on behalf of their customers – a real differentiator.