|
|
CCIM and the banking enterprise
By Ray Edwards, Senior Consultant, Principal
Foreword by Thornton May,
The word "bank" is to the financial services industry what the phrase "buggy whip" is to the transportation industry--throwback whose relevance is limited to an eccentric and conservative clientele with a lot of time on their hands. Art Ryan, former chairman at Chase Manhattan Bank, believes that banks need to re-relevant themselves by identifying different categories of customers and giving them the distribution system they want rather than forcing them to use the distribution system that the banks happen to have. Electronic document management system (EDMS) technology lies at the center of such a distribution system upgrade. American commercial banks spent more than $20 billion on computers in 1993. With the exception of the money spent on global trading systems, most of the money spent during the 90s went into providing Luddites with PCs (end result: they wrote more and prettier memos), enterprise wide programs designed to automate existing systems (end result: a lot of dead clerks), or poorly targeted client-server experimentation (end result: unhappy shareholders, rich vendors). Little focus went into creating an infrastructure that delivered value to customers where they wanted, when they wanted. EDMS technology lies at the center of such a customer focused infrastructure.
CCIM, Customer Centric Information Management, is our encapsulated expression of a time proven idea, with a twist from the perspective of information management. If focus is put on customer values, providing information-rich products or services and dynamically understanding changing needs, the result will be loyal customers. For this definition, information management is a superset that includes document or records management. In the banking world, where servicing customer needs is often accomplished with the multi-directional transfer of information, the intent of the customer centric model is two-fold: * bring information that satisfies total customer responsiveness to a common access or delivery point * normalize and centralize information which allows the banking enterprise to better understand their needs and provide services that drive value-based revenues. To accomplish this, the CCIM model must address the integration of customer related information from all banking business units. As depicted in the CCIM concept graphic, John Q. Customer should have any information regarding his current business, or future needs with the bank, available from a single framework. That one framework should provide multiple delivery channels that include traditional and non-traditional branches, ATMs, telephones, PC banking and the Internet. There are obvious physical limitations for transactions requiring legal instrument execution. However, the point is, customer centricity of information engenders the best customer service. Banking organizations have always been customer focused, but often from multiple points and perspectives within the enterprise and with little coordination of effort. Even in small community banks, different bank officers sitting only a few feet away from each other might handle uncoordinated functions for the same customer. Within the mortgage banking industry, there are many customer help centers open 24 hours to address consumer questions about mortgage payments or home equity loans. Few institutions have brought these separate functions together into a single service center. This can be a serious issue with customers. According to Robert M. Olson, Jr., Executive Vice President of Operations and Technology for $ 5.3 billion Magna Bank (St. Louis), "Customers want a simple point of access regardless of the infrastructure." The bank that offers what the customer wants will gain and keep market share. Mary Ellen Baker, Senior Vice President of Operations Services Group for Comerica Bank (Detroit), which has $35 billion in assets, considers customer-centric service to be vital to the future success of banking. "There ís only one way banks can compete today, and that is to adopt a customer-centric attitude across their enterprises, at the teller window, on the telephone or in the backoffice," she comments. Technology and automation are not the only ingredients in developing a customer centric approach. Banks wanting to keep or increase their customer base will remember it isn't only automation that must be user friendly--high-tech requires availability of "high-touch," often in the form of an integrated call center. The growth and importance of call centers to support the fast-growing depersonalized automated banking functions is evidenced everywhere--financial services journals are filled with examples. And the bank teller, though traditional branch banking transactions are declining, will remain on the front line of customer service for the foreseeable future. The information processes used by the bank must enable the call center and teller to use technology to offer the best service available. At the heart of the future customer centric environment lie the components of EDMS, imaging, workflow, and document management, integrated on the desktop with telephony management and communications technology. This configuration provides rapid access to customer and bank services information. Internet-based technology and PC banking area also providing convenient access for customers. To support the move away from branch banking and toward automated banking, banks must capitalize on the reduced person to person time they have with customers. Why do banks need it?Just as cheap fuel, urban sprawl and commuting prompted the building of hundreds of convenient branch banks throughout US suburbs, telecomputing, the proliferation of home-based PCs and the rising expectation of information accessibility is driving the banking industry to meet new challenges. New, non-bank organizations now offer financial services once offered only by banks. Services such as checking, credit cards, trust accounts, and lines of credit are only beginning to dot the traditional banker's radar screen. This newfound competition threatens to capture some of the most profitable segments of the banking market. Time is critical in this competition. In order to hang on to their traditional customers, banks must offer the user-friendly technology that people are beginning to expect: speed, ease of use and 24-hour information access. "This isn't prognostication, the change is in motion today," says Horace L. Allen III, Senior Vice President of Cash Management Sales for the $18 billion Crestar Bank (Richmond, VA). "The trend is away from traditional, operationally expensive branch banking, not only in retail operations but across the lines of cash management and commercial bank services. I can't think of a single technology in recent history that has had such a tremendous positive impact on the way we do business with commercial treasury customers. Mainly because this technology produces positive effects in the customers' back office while being more cost and time effective for the bank. "We're delivering or in the process of delivering automated electronic and image-based services to commercial customers today. We made the investment in the technology because in today's fast paced world customers don't need a banker's face popping in every few weeks-- they need service and information, fast and accurate, so that they can go home at a reasonable hour, too." Allen is right on the mark, claims Clement E. Buschmann, Senior Vice President of Systems Development, Information Technology for the $18 billion Mercantile Bank (St. Louis). "In today's world people are working harder and have less time on their hands. After work's demands, family usually plays the key role so the last thing people want to do is waste business time. So, if I can conduct my transactions quickly and efficiently at an ATM, Kiosk or via my home- based PC, that time recovery goes in my time bucket." Banking has traditionally been built upon relationships and convenience. Says Buschmann, "Banks have often had a branch mentality that is costly to them. Now is the time to look at alternative distribution channels and find ways to move their customers to a cheaper, more customer-centric way of making transactions." So if the market isn't satisfied with the traditional branch bank, how can banks be more service driven and competitive? Olson, of Magna Bank, says, "Everyday when a banker wakes up his focus is keeping and gaining profitable marketshare. Well, the way you do that is simple-- develop a high-tech market driven culture leverage technology and process improvement to become customer-centric." It sounds easy enough, but in reality it requires many changes, large and small. Banks have information about their customers that gives them a good definition of what customers want and how they do business. They often have a long term relationship with customers, and in many cases would only have to do minimal marketing of new services to make customers happy and retain their loyalty. This win-win situation creates revenues from existing resources and saves the money it costs to secure new customers. Consider an example of typical customer service, wherein a couple has their house mortgage, auto loan, retail DDA checking and savings accounts with Acme Bank. This couple writes out checks to pay their loans and transfers money from savings to checking to cover a few extra checks. Unfortunately, in one instance, the savings transfer is credited to the wrong account, causing the mortgage payment to bounce. Mortified, the couple is not sure which other checks may or may not have cleared and they're frantically trying to put it all in order. Today, in most banks, it would require the intervention of at least two or three customer service functions and an inordinate amount of time to solve the base problem. Olson observes, "Customers are making more and more automated transactions that typically don't require the help of a bank employee--debit card, home banking, ATMs. But this means customers are completing transactions with a machine, and if they do run into problems or issues of any kind, they often can't immediately talk to a bank employee. "This increase in automated banking means that banks must migrate to centralized customer service areas or call centers to meet customer needs that exist in the gap between man and machine. Customers should have one place they can call and find out anything they need. This includes answers to questions about banking services, how to perform specific transactions, how to apply for a loan, how to set up a new account." In order to answer all the questions customers have without keeping them on hold forever, rerouting their phone calls, or worse yet, giving them six different phone numbers for six different questions, a well managed call center offers the perfect bridge. But call centers alone do not define a truly customer-centric organization. It is by leveraging technologies through people and processes that the customer-centric organization is realized. "It is an attitude about how one does business," says Jim Matteoni, Executive Vice President and Chief Information Officer for $5.5 billion UMB Bank (Kansas City). Where is the industry now?Traditionally, internal banking information systems supporting various banking functions have been implemented as fragmented point solutions. Even within specific functions, such as mortgage loans, the Information Systems function may be even further fragmented by department, group or subgroup. Different systems may be designed to handle loan origination, credit report review and loan servicing. There may even be a separate system for collections and credit bureau reporting functions. "Banking is currently moving from a maintenance centered mentality to an aggressive use of the inter-intranet, imaging, personal computers and other new systems for the good of their customers," says Matteoni. "People outside banking, such as manufacturing, were traditionally more creative because of their competitive marketplaces, but now banks must be more creative. However, they canít lose the conservative approach to being safe with the stockholders investments." The banking industry has traditionally looked at EDMS as a solution to manage backoffice costs and avoid new expenses. As regulatory and liability issues caused the amount of paper in banking to grow significantly, bankers realized that the only way to combat this was with technology. However, in the beginning, the costs of EDMS were extremely high and the technology was primarily limited to storage and retrieval functionality. With improvements in the technology and pressures for customer responsiveness and cost savings, today, banks are devising many EDMS applications. The following are examples and several trends in capsule form: * Treasury Operations (ARP, cash services, lockbox, item processing) * Lending Operations (retail, commercial, consumer, mortgage) * Trust Operations (portfolio and trust documentation) * Retail Operations (signature verifications, CIF master, new account documentation, customer service) * Core Operations (accounting, HR files, recovery management, policy files, regulatory compliancep * Credit Card Operations (payment Processing, application processing, reject files) * Facilities Management (CAD drawing files, fixture management) * Wire Transfer (funds transfer agreements, signature files) * Investment Services (transaction records, trades)
Trends in credit card EDMS * Producing image statements as part of a consolidated customer relationship portfolio. * Integrating credit analysis and approval functions and documentation into an application processing workflow system. * Making card data available as part of the CSR function. Trends in Lending Operations EDMS Applications * Automation of the loan origination process into the process and servicing functions. * Providing prospective customers intelligent applications as return documents to automate the data capture portion of the application process. Trends in remittance processing operations/EDMS applications * Migration from traditional stovepipe processing, e.g., wholesale, retail, etc. to a more streamlined "WholeTail" processing environment which is more holistic and utilizes a common transport and processing platform. * Combining personal image transports and page scanning technologies to create knowledge worker stations to handle customized remittance processing. * Utilizing "Work Team" concepts and integrating workflow schema into operational processes Trends in Cash Management EDMS Applications * On cycle delivery of reconciled check images via CD-ROM. * Real-time dial-up or Internet access to customer images for research or positive pay applications. Trends in Item Processing EDMS Applications * Implementing "All Items Archives" with integrated hierarchical storage management and media management for replacement of traditional item research functions, and to allow customer check truncation * Providing on-line access to images through home banking products for research and reconciliation * Migration towards image based ECP What is required to get to CCIM?Increased responsiveness dictates using technology to get information quickly and accurately to the various points of customer contact and dispersion. This takes more than simplifying access to raw horsepower or managing simple row and column data. It means merging vast disparate repositories of non-normalized compound documents--both paper and electronic--into one virtual information center. The good news is the evolution of EDMS technology has reached the point where banking paradigms are actively being recast and aligned to customer and operational needs. So based on a snapshot of EDMS today, what impact can it have upon the banking industry and where is it going? First, examine the market. A recent International Data Corporation (IDC) statistic estimated that EDMS technology sales to the banking world should approach $1.1 billion in 1996, which would represent a 24% slice of the $ 4.6 billion EDMS industry sales pie for 1996. With growth projections consistently in the 20% range, it is apparent this trend will continue. This represents considerable momentum-changing potential for banking paradigms. The root of the problem is the need for information about people, time, transactions and effects. Obviously, all of the data which supports a transaction cannot physically be housed in a single repository. For example the documentation required for a home equity loan is complex. Normally it begins with a handwritten or electronically created application document, assorted documents for the file such as insurance proof, tax information, etc. Then, the lender may need photographic records of the property. After deliberation and analysis, the bank can issue the loan. Each of these steps involve disparate origination points, media types, and processing channels, none of which has a destination address of a single repository. Documentation in banking is by necessity compound in nature. It is this element which drives the biggest challenge for CCIM. The need for compound documentation drives the need for information systems that can collect and manage compound documents in a Compound Technology Architecture. As can be seen in Figure 1, a compound document architecture must house all types of information, regardless of source of origin, steward, or media type. It also suggests that data must at some point become normalized for ease of maintenance and retrievability. CCIM architecture centers around document, workflow and transaction managers. In a progressive enterprise schema, data is identified, catalogued and delegated to an appropriate electronic folder. Data or document passage through the document manager identifies its type and life cycle. The document manager directs where it shall reside, for how long and in what format. Underneath, a subsequent Hierarchical Storage Management layer directs media migration and acts as the enforcer of pre-determined life cycle as defined by the document manager. Additionally, the document manager must track any relationships between the electronic folder and any physical documents which cannot be imaged or destroyed, such as negotiable instruments. Information collected via the LOB (Line of Business) applications also becomes part of the electronic record and may also migrate from native processing environments to the repository. This concept allows for linkages via the transaction manager to LOB applications and their data. Although all of this effects the success of the customer service interface, there is one extra attractive spin-off benefit. Having data collected, normalized and catalogued enables executive information systems to have data mining and decision support for operations and marketing initiatives. Providing a friendly user or CSR interface for retrieval of what is captured and managed is another challenge. With GUI development tools and standard protocols, homogeneous desktops that can query diverse platforms and data structures are possible. A GUI Customer Service Interface is critical for CCIM success. The CSR's desktop is not synonymous with the customer service interface. This distinction is made because although the bulk of customer service may begin in a call center today, future customer service will be from multiple access channels. Intelligent kiosks will dot the landscape, replacing traditional ATMs, and offering human intervention as needed by videofone. Automation-enabled individuals and companies will bank directly on the Internet. Still, certain individuals will use branch location and deal with humans. Thus at all points, the concentration and presentation of data in a standardized GUI interface will, of necessity, be the state of the industry. Is banking there yet? Hardly, but it is gaining. By 2000, at the desktop, banking users will see a common GUI style interface across the enterprise with tools for data acquisition, identification, search and distribution. Under the hood, so to speak, will reside the components that make-up EDMS as a centerpiece of CCIM. Backed up by the right mix of subject matter experts and human councilors, the time and efficiencies gained by both customer and provider should be substantial. Apex Associates is an independent operations and technology consulting practice located in the Kansas City area since 1986. Ray Edwards is a Senior Consultant and Principal of Apex Associates, Inc. He has extensive information management experience and has been directly involved in document management technology since 1988. Ray is a monthly columnist for ImagingWorld magazine, a regular contributor to Item Processing and Document Imaging Report and a frequent speaker at banking and technology conferences. He is a charter member and co-founder of The Camden Group, an affiliation of consultants. Ray can be reached at 1-800-991-1390, ext: 104 or via E-mail at: redwards@apexvision.com
|
HOME ++ SEARCH IW ++ DAILY
NEWSWIRE ++ CURRENT
PUBLICATIONS ++ ABOUT
IW
BUYER'S
GUIDE ++ DIIME ++ SUBSCRIBE ++ COMMENTS
|
|
© 1995, 1996, 1997 Cardinal
Business Media, Inc. |
![[LiveLink]](/file/36067/SIGCAT 97 - Conference on Convergence.ISO/Docs/webcd.gif "[LiveLink]"){kind=small}