Maximizing System Utilization: Understanding Parameters and Capabilities

In the PRI article Wasting Time: 8 Opportunities for Improving Operational Efficiency, Director of Process Improvement Jen Megee said that the biggest area to examine for wasted operations time is the failure to utilize current systems to their fullest potential. One of the keys to fully utilizing the systems you already own and reaping the biggest benefits from them is understanding their parameters and capabilities. You can’t make the most out of what you’ve got if you don’t know what is possible!

In this series of blogs, PRI experts 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. Understanding a system’s parameters and capabilities allows the bank to automate redundant and mundane processes, ensuring your team is working on higher level items, Megee said. And as we’ve discussed before, automation is key to operational process improvement.  

So, what can your system do for you? What are its true capabilities? Some of the areas we look at when exploring system capabilities and setting up parameters are:

Service charge routines

The core system is often capable of handling unique product types. For example, the bank may desire to create a new product type for a single customer to secure the business. Setting up the parameters of this new product correctly allows it to be included in future data analysis and uncovers any errors or issues with the customer down the road. Banks can pay a vendor to customize parameters, but they may unwittingly be paying for something the core can already do.

Transaction codes

PRI Data Engineer Leslie Unrue said that a lack of forethought when setting up the core system parameters can hamper data analysis later. Understanding the importance of detailed transaction codes and how they feed into reporting will help guide the process.

PRI Consultant John Muell said that as banks have more conversations around customer segmentation and behavior, it is imperative to know how transaction codes are set up to collect the data. It can be difficult to create targeted marketing strategies for your customers without a deeper understanding of who they are and how they are engaging with existing products.  

Account analysis

Often, account analysis is already offered by the existing vendor, but either the bank is not taking full advantage of the capability or they’re not using it at all. Sometimes, they will seek a third-party product for account analysis, but PRI Consultant Tiffany Jane recommends reviewing what capabilities the organization is already paying for.

“I encourage banks to look at what their vendor can offer rather than getting a third-party product that is not native or integrated into the system and carries an extra fee,” Jane said.

She said they should also set up all business accounts on account analysis. This can be set up so that customers are not charged but simply tracked. Subsequent data analysis reporting can uncover missed opportunities for enhancing the customer experience.

Item counters

Core systems often have the capability to set up item counters, which Jane recommends setting up broadly. Item counters can be set to count things such as debits and credits, sweep fees and ACH services fees and change orders. The item counter data analysis can be used to determine if the bank wants to charge differently for different products or charge fees for heavy usage of certain products.   

“The bank doesn’t have to use item counters to charge customers or even attach them to accounts, but the data will be there if it’s needed in the future,” Jane said.

Interest rate calculations

Banks sometimes offer special risk-tiered interest rates and exception pricing on deposits to secure a customer’s business. Rather than having someone manage these exceptions manually – a task which can easily get out of hand – find out if the system has the capability to do so automatically. For example, the bank could set up an exception pricing product that adjusts rates automatically on an approved timeframe. The system can also set expiration dates that can automatically expire and default to a standard rate.

System enhancements

Jane said vendors commonly send out system enhancements either monthly or in a large group annually, but banks may not be paying attention to updates that could improve system functionality and automation. She recommends having a person or department own vendor system enhancements and communicate their functionality to the proper departments. Many times, IT is directing the effort to integrate system enhancements but unless it is part of their workflow, the communication piece can be dropped. It’s helpful if the owner has a deeper understanding of how the enhancement affects the broader organization, not just the department they are in.

Workflow solutions

There are many core system capabilities that touch on workflow solutions that banks may be overlooking or not utilizing fully. 

• New account platforms and miscellaneous data elements. These can sometimes perform other workflow tasks in addition to setting up new accounts or taking care of pieces of the loan application process. Be sure the bank is leveraging all the solutions it has access to.
• RPA. Once you’ve leveraged all the normal functions, you can add automations rather than relying on paper copies and keying in the data again.
• CRM. Sharing information about customers across departments can uncover opportunities for relationship management that would not be apparent otherwise.
• Imaging systems. Fully utilizing imaging systems can save the bank from printing and re-scanning multiple sets of documents during their processes. Imaging systems also allow for annotations and electronic approvals among large groups of people who need to review the documents, saving time and paper and increasing accuracy.

Understanding your system’s true capabilities (and limits!) will serve your organization well as you work to maximize it and enjoy the many benefits of automation. Your investment in your core system is one of the largest ones you make in your business. Be sure it’s working for you to its highest potential.

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. 

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. 

Tiffany Jane has deep financial service experience ranging from bank software implementation, sales and consulting to retail branch banking. She has led banks through complex software conversions while working with other ancillary solutions. 

Resources 

Wasting Time: 8 Opportunities for Improving Operational Efficiency – 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.