3 Use Cases for BPM in the Banking Industry

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USE CASES FOR BPM IN THE BANKING INDUSTRY 3

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Time to open a new account in retail banking

5 minutes – best

76 minutes – worst

Availability of loan funds

2 days – best

37 days – worst

Time for conditional mortgage approval

15 minutes – best in class

4 hours – median

There is a widening gap between the best performers and the worst performers

in banking operations.

Source: Boston Consulting Group, The “New New Normal” in Retail Banking, 2012

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Yet, customer service is the #1 factor for both customer acquisition and retention in banking.

Source: Boston Consulting Group, “Customer-Centricity in Retail Banking”, 2012.

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Top performers are serving customers faster and more intelligently,

and are better positioned to take advantage of opportunities afforded by

mobile, social, cloud & analytics.

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So, what lies behind their success?

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They’re banking on BPM & Decision Management.

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“BPM today plays a critical role in driving customer experience initiatives…from

companies looking to overhaul customer service processes to companies seeking to deliver more compelling experiences that

incorporate big data analytics and real-time guidance.”

Source: The Forrester Wave: BPM Suites, Clay Richardson & Derek Miers, 2013

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How are BPM and Decision Management driving better banking?

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Process-Led Transformation in Banking

Customer Focus

and Innovation…

…driven by data

analysis & behavioral

insight

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Customer Focus

and Innovation…

…driven by data

analysis & behavioral

insight

Streamlined

Operations…

…through process

visibility &

optimization

Process-Led Transformation in Banking

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Customer Focus

and Innovation…

…driven by data

analysis & behavioral

insight

Streamlined

Operations…

…through process

visibility &

optimization

Increased Speed to

Market…

…implement policy

changes in real-

time, not weeks or

months

Process-Led Transformation in Banking

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Customer Focus

and Innovation…

…driven by data

analysis & behavioral

insight

Streamlined

Operations…

…through process

visibility &

optimization

Increased Speed to

Market…

…implement policy

changes in real-

time, not weeks or

months

Reduced Risk and

Costs…

…via and accurate consistent

enforcement of guidelines

Process-Led Transformation in Banking

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Customer Focus

and Innovation…

…driven by data

analysis & behavioral

insight

Streamlined

Operations…

…through process

visibility &

optimization

Increased Speed to

Market…

…implement policy

changes in real-

time, not weeks or

months

Reduced Risk and

Costs…

…via and accurate consistent

enforcement of guidelines

Improved Regulatory

Compliance…

…increased

transparency and

comprehensive audit

trails

Process-Led Transformation in Banking

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So how does it work?

Here are 3 practical

use cases.

Loan Origination

Fraud Management and Compliance

Customer Care and Insight

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Example 1: Loan Origination

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Benefits of BPM for Loan Origination

Provide individualized financial advice during credit application

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Benefits of BPM for Loan Origination

Provide individualized financial advice during credit application

Deliver a more personalized customer experience

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Benefits of BPM for Loan Origination

Provide individualized financial advice during credit application

Optimize cross-selling to drive share of wallet growth

Deliver a more personalized customer experience

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Benefits of BPM for Loan Origination

Provide individualized financial advice during credit application

Optimize cross-selling to drive share of wallet growth

Improve risk management

Deliver a more personalized customer experience

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Benefits of BPM for Loan Origination

Provide individualized financial advice during credit application

Optimize cross-selling to drive share of wallet growth

Improve risk management

Make smarter decisions in real time

Deliver a more personalized customer experience

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ZUNO BANK AG Vienna, Austria

Challenge Build a loan application process to achieve end-to-end process control and higher automation rates.

A dynamic business process management

platform to facilitate loan processing

Benefits

• Business-oriented solution with a quick

implementation process

• Increased efficiency in handling

voluminous transactions

• Reduced processing time due to higher

automation

Solution

A BPM solution that facilitates a robust

process flow from an internet originating

loan application until the final account

opening in the core banking system.

Complex IT environment (internet banking

site, multiple internal and external

databases, a business rule management

system for credit decisions, a core banking

system and a data warehouse).

IBM and IBM Business Partner MOViLES

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Example 2: Fraud Management and Compliance

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Monitor transactions in real-time to identify and take action on

suspicious activity

Benefits of BPM for Fraud Management and Compliance

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Monitor transactions in real-time to identify and take action on

suspicious activity

Accurately assess the threat level in relation to customer impact

Benefits of BPM for Fraud Management and Compliance

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Monitor transactions in real-time to identify and take action on

suspicious activity

Handle a variety of transaction types across multiple channels,

including web and mobile

Accurately assess the threat level in relation to customer impact

Benefits of BPM for Fraud Management and Compliance

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LEADING RETAIL BANK

Challenge Improve the effectiveness of risk management operations while reducing the daily staff workload.

Rules-based risk management for more

agile banking operations

Benefits

• Automation frees employees to focus on

high-value cases

• Detection more than 200,000 high-risk cases

a day, with appropriate next action taken

• Linkage of risk management and commercial

divisions, providing holistic view

Solution The bank used a business rule management system (BRMS) to create a more flexible and proactive solution.

The BRMS-based solution assists client managers in the detection and daily handling of risks, reducing staff workload. The new solution also moves the bank from an event-driven approach to a client-driven approach, providing more relevant information for decision-making.

By focusing proactively on client information rather than responding to events, the bank can manage risk more effectively.

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Example 3: Customer Care and Insight

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Improve customer segmentation and conduct targeted marketing

campaigns

Benefits of BPM for Customer Care and Insight

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Improve customer segmentation and conduct targeted marketing

campaigns

Optimize sales processes such as account opening, lending and dynamic

product bundling

Benefits of BPM for Customer Care and Insight

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Improve customer segmentation and conduct targeted marketing

campaigns

Enhance service processes such as case management and dispute

management

Optimize sales processes such as account opening, lending and dynamic

product bundling

Benefits of BPM for Customer Care and Insight

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LEADING EUROPEAN BANK

Challenge Build a flexible infrastructure that would deliver a consistent customer experience across channels and reward customers with loyalty offerings on demand.

.

Tailored offerings and promotions for

customers, on-demand

Benefits • Reduced time-to-market for new products

from months to days

• New offers can be created and deployed

almost in real-time

• Substantial cost savings realized through

improved staff productivity and decreased

IT complexity

Solution The bank built a single repository that

captures and maintains all of its data

across brands and channels, and provides

a 360-degree view of each customer.

With this data, the bank can now quickly

identify the best product to meet each

customer’s needs and develop customer

loyalty offerings based on a customer’s

profile.

Creating a single view of each customer enables the bank to rapidly build new products and promotions.

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Putting BPM and Decision Management into Practice at Your Bank

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SMARTER PROCESS…

is IBM’s approach to Business Process and Decision Management.

We’re focused on helping your business put the customer first, all while driving efficiency and optimization into end-to-end processes.

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Experience. Our install base

includes over 5,000+ active

implemented customers and 800+

business partners

Market Leadership. We are a Leader in

Gartner’s Magic Quadrant for Intelligent

Business Process Management Suites

and in the Forrester Waves for BPM

Suites and Dynamic Case Management

Expertise. Our Global

Smarter Process Center of

Competency puts more than

650+ experts at your disposal

Why IBM?

Here’s Why…

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“We now have tools to map out, study and improve all of our processes. They are user friendly and logical. I’m excited that we’ve embraced the BPM technology and culture

that supports the way we want to manage our business.”

Source: LaTeca Fields, Business Analyst-Specialized Support Services, Lincoln Trust Company

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Video series: Smarter Process for Banking ibm.co/1D9RXVz

Whitepaper: Smarter Process in the Age of the Customer ibm.co/1Dy8gJQ

eBook: Smarter Process for Dummies ibm.co/1zbo4T1

Bank on IBM. Learn More About Smarter Process for Banking…

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