Maximizing System Utilization: Ditch Paper and Manual Processes

Have you ever encountered a time-wasting process at a financial institution that makes you scratch your head and say, “There must be a better way?” Often the process itself has not been reviewed for operational efficiency, perhaps even in many years. In the intervening time between when a process was created and today, it’s likely that the institution’s system stack (i.e., core, LOS, new account platform, report writer, etc.) has been upgraded, incorporating new technology and functionality that is being under-utilized. When a process is producing too much paper, too many steps, and too much frustration for employees with too little reward, it’s time to look at what capabilities you may be missing out on.

In the PRI article Wasting Time: 8 Opportunities for Improving Operational Efficiency, Director of Process Improvement Jen Megee shared that the biggest area to examine for wasted operations time is the failure to utilize current systems to their fullest potential. This includes correct parameter usage, available interfaces and automation or simply implementing modules already owned by the organization. In this series of blogs, PRI experts will examine how to maximize system utilization to improve operational efficiency, which has tangible impacts on both customer experience as well as employee retention and engagement.

“Utilizing the full capabilities of the systems already in place and new technology can dramatically reduce duplication of effort and systems, allowing you to do more with less,” Megee stated. “It also helps us make employees’ jobs easier and better. By automating redundant and mundane practices, we ensure that they’re working on higher level items and adding maximum value to the organization. It’s ultimately unsatisfying to work in a place that does not allow you to help a customer without jumping through a bunch of hoops. Automation is key to operational process improvement.”  

The Banker article Strategies for Optimizing Your Banking Operations agrees that automation can significantly streamline banking operations, reducing costs and improving efficiency, using technology to perform tasks that would otherwise require human intervention.

“For instance, banks can automate their loan approval process, reducing the time it takes to approve loans and eliminating human error. They can also automate their customer service using chatbots, providing instant responses to customer queries. Moreover, automation can free up staff to focus on more complex tasks, enhancing productivity.”

Exploring Current System Capabilities

PRI Consultant John Muell points out that there is often a lack of understanding by banks of the true capabilities of their core system. For example, banks that manually check OFAC when opening a new account may be unaware that their system has that capability built in. Not knowing what to ask the vendor could even lead to the purchase of an ancillary – and maybe unnecessary – product to resolve an issue that the current system could easily handle.

PRI Consultant Shawn King said he often sees examples of unnecessary redundancies in the loan approval process, with its many players, that could be effectively streamlined using the bank’s LOS system technology. If an institution is printing PDFs, getting signatures, making notes on paper copies and rescanning into the system, there’s a high likelihood they are not using the full capabilities of their system. Keeping everything digital by utilizing secure electronic signoffs and editing features saves extra paperwork and reduces confusion while increasing accuracy.

It is important to understand current system capabilities to avoid investing in additional systems or implement manual processes to fulfill a need. Cultivating good vendor management practices is crucial when reviewing processes and system capabilities.

Finding the Low-Hanging Fruit

Reduce manual forms, spreadsheets and reconciliations.

PRI works with clients to review end-to-end processes and often finds multiple examples of manual forms or spreadsheets that can be created in automated fashion. As an example, bank account reconciliations are often fulfilled on a manual spreadsheet, creating the possibility of keying errors. Bankers tend to be comfortable with these manual processes and don’t always challenge the status quo, but there are usually effective ways to streamline and automate. 

Review manual reporting.

PRI Data Engineer Leslie Unrue says that often an existing system has the desired functionality, but the institution simply has not adopted it. For example, many banks create multiple reports manually customized for different areas of operation without realizing their system will create a customized, on-demand report for them. Relying on system-generated reports rather than manual tracking significantly enhances data integrity by providing consistent, real-time information from a single source. Manual reporting often leads to multiple versions of the same data across departments, creating inconsistencies, duplicative work, and unnecessary confusion. Validated automated reporting not only improves accuracy and standardization but also empowers better, faster decision-making.

Creating a culture that asks “Why?”

Somewhere along the way, institutions may fall victim to a “because we’ve always done it that way” culture, and employees are simply defaulting to what they know. Taking a new approach that reassures employees of their value and asks the frontline “How can we make this process better?” will lead to a culture of challenging the status quo in positive ways.

In the PRI article Process Improvement and the ‘Because We’ve Always Done It That Way’ Culture, Megee suggests that organization leaders empower employees to ask “why.”

“Don’t be afraid to challenge the status quo, ask the question ‘why’ and be open to the answer,” Megee said. “Sometimes people get protective, in some cases defensive, of processes that they’ve followed for 10 or 20 years, but banking has changed and evolved over those years. It’s important to demonstrate that changing processes can make the FI more profitable and save the employee time and effort.” 

Bringing in a fresh perspective on process improvement and system capability can help financial institutions pluck the low-hanging fruit from their existing systems. Good relationships with vendors and knowing what questions to ask will also increase system optimization. Oftentimes the answer to improving processes is already in your possession, you simply must tap into it.

PRI experts and article contributors

Jen Megee brings expertise as a retail banking and deposit operations executive. She has led teams in implementing and growing profitable deposit products, integrating organizations through mergers and acquisitions, on-boarding purchased accounts and converting to different systems, including core. 

Shawn King’s primary areas of expertise include lending and lending operations, credit underwriting, loan policy, risk grading, process improvement and software implementation and development.

John Muell has significant hands-on experience in implementing organizational change, process redesign, product design, merger and consolidation efforts, information technology, and other types of business transformation in the retail banking, bank operations, commercial and trust organizations of financial institutions.

Leslie Unrue has a proven track record of leading successful implementation projects, upgrading technology, and developing innovative solutions to mitigate risk and enhance operational efficiency. 

Resources 

Strategies for Optimizing Your Banking Operations – Banker

Struggling to Become Data-Driven? Focus on Access and Culture – The Financial Brand

Wasting Time: 8 Opportunities for Improving Operational Efficiency – Profit Resources, Inc.

Process Improvement and the ‘Because We’ve Always Done It That Way’ Culture  – Profit Resources, Inc.

PRI specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.