Preparing for a Focus on Process and Efficiency

When asked why it is vital to take the time to focus on efficiency and effectiveness in a financial institution, the go-to answer typically involves reducing costs and improving profitability. At PRI, however, cost reduction and improved profits as primary drivers are prioritized behind enhancing the customer experience.

Mikelle Brady, PRI partner, says that the customer experience is the top priority in process improvement projects and all the work they do because the old saying rings true: It costs less to keep a happy customer than to acquire a brand-new customer. And because of the digital transformation in the banking industry over the past 20 years, the bar of what makes a happy customer has been raised to a new level, and it’s an expected standard that FIs of every size must meet.   

PRI’s second priority when focusing on process and efficiency is improving employee engagement. Studies consistently show that people are more engaged in their jobs – and more willing to stay – when they are empowered to solve problems and act in alignment with the organization’s overall purposes.

When an FI gets these two priorities right, a reduction in costs and an improvement of the bottom line will flow from their commitment.

The past several years have pushed banks in a way that challenges how bankers serve customers – both internal and external. Brady says it’s time to shift the focus on process efficiency and effectiveness throughout the bank. Are areas such as loan and deposit operations designed to best serve lenders and customer-facing staff? Is the organization structured to serve the customer most effectively in a way that can be profitable for the bank? Transforming the FI into a well-oiled customer service machine will pay long-term dividends on the investment.

Improving the Customer Experience

• Walk in their shoes. When FIs are reviewing processes to improve, Brady recommends using a customer experience lens. Customer journey mapping can help the FI understand the customer experience more deeply and come up with ideas for process changes that will make it smoother and more friendly.
• Review SLAs. Service Level Agreements within the bank between departments can uncover ongoing unintended battles between departments. Encourage employees to collaborate, discuss process efficiencies and establish reasonable expectations with the end goal of delivering the smoothest customer experience possible. Reengineering SLAs has the two-fold effect of serving both the external and internal customer experiences. Working together to make everyone’s job easier pays off in improved engagement and job satisfaction.
  
  The Forbes article, Best Company Traits: Efficiency, reminds us that as companies grow larger, there is a complication to workflows that were once simple.
  
  “There’s no longer autonomy or a single decision-maker; instead, issues go through channels, to be reviewed by the necessary people or groups in their own time, leaving one or more people waiting for a decision before they can continue their work. Streamlining decision-making processes and granting autonomy where possible can help prevent the delays and logjams that prevent more work from getting done.” – Forbes 
• Review system utilization through a customer lens. Ask whether the FI is getting the most out of its systems, for the benefit of the customer. A review of system utilization can lead to better, more efficient processes that improve the customer experience dramatically with relatively minor adjustments.

Improving Employee Engagement

As PRI helps clients focus on process and efficiency, Brady recommends taking an honest assessment of the FI’s culture. Creating a proactive culture requires intentionality and authenticity.

“Whether the assessment is formal or informal, the leadership needs to get their arms around the organization’s strengths and weaknesses,” Brady said.

The financial industry, along with most other types of employers, has experienced a cultural upheaval in recent years. Current events have caused many employees to reconsider work and what it means to their lives.

In a recent study, McKinsey & Company found that nearly two-thirds of US-based employees said that COVID-19 has caused them to reflect on their purpose in life. And nearly half said that they are reconsidering the kind of work they do because of the pandemic. Millennials were three times more likely than others to say that they were reevaluating work. They also found that 70 percent of employees said their sense of purpose is defined by their work.

“Such findings have implications for your company’s talent-management strategy and its bottom line. People who live their purpose at work are more productive than people who don’t. They are also healthier, more resilient, and more likely to stay at the company. Moreover, when employees feel that their purpose is aligned with the organization’s purpose, the benefits expand to include stronger employee engagement, heightened loyalty, and a greater willingness to recommend the company to others.” – McKinsey & Company

Getting Started & Measuring Results

When focusing on initiatives to improve processes and efficiency, executive leadership is charged with determining what success looks like in their organization. To steer the ship with intention, it is important to agree on specific benchmarks and communicate what the desired effects of the initiatives will be and why they are driving them.

“Implementation of new ways of doing business is much harder than identifying and prioritizing what to do,” Brady said. “First, prioritize the ‘quick hits.’ What can be completed quickly? These would be items that do not impact customers directly. Focus next on items that have the greatest long-term financial impact.”

In the PRI article, Wasting Time: 8 Opportunities for Improving Operational Efficiency, Jen Megee, PRI project manager, examines the eight top areas where excess time is spent in FI operations and why it’s important to focus on these inefficiencies now. Often viewed as not having a direct client impact, improving operational efficiencies does actually influence overall client experience, although it may be indirectly.

“No company is able to get to one hundred percent efficiency, but the best companies are able to examine their processes and understand where losses of time and energy are occurring and cut down on those as much as possible.” – Forbes

When preparing for a focus on process and efficiency, Brady recommends prioritizing the customer experience and improving employee engagement as the lens for every action the organization initiates. This approach will lead to sustainable, long-term success for the FI with measurable results and happier customers and employees.  

Resources

Help Your Employees Find Purpose or Watch Them Leave, McKinsey & Company

Process Improvement and the ‘Because We’ve Always Done It That Way’ Culture, PRI

Wasting Time: 8 Opportunities for Improving Operational Efficiency, PRI

Customer Journey Mapping: The Key to Improving Customer Experience, PRI

Best Company Traits: Efficiency, Forbes

Profit Resources 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.