Get better results from the back office
Many banks and credit unions present the customer with a technologically savvy face, but behind the walls they are inefficient and continue to “get around paper”, preventing them from delivering on their customer service promises.
Banker-turned-consultant Kunal Chopra says an advanced front-end coupled with a rickety back-office operation is little more than a facade, as it only creates a disjointed digital customer experience.
Chopra began his banking career as a teller for TD Bank in Toronto before moving to executive positions in operations, process management and engagement for three of Canada’s largest banks: Royal Bank of Canada. (RBC), Bank of Montreal (BMO) and Canadian Imperial. Bank of Commerce (CIBC). He then became a senior strategy and operations consultant for Deloitte and in 2018 founded his own consulting firm, Chopra & Co., which focuses on strategic, operational and technological innovation for financial services organizations.
He spoke to BAI from his Toronto office.
Q: Have the digital banking elements for customers progressed faster than the operational side behind the scenes amid the pandemic? If yes, why?
A: The COVID-19 pandemic hasn’t worsened the disconnect between frontline and back-office operations, but it has highlighted how underinvested some units are in operations. It revealed shortcomings in operational readiness and efficiency. It’s been a trend for over a decade now, if not more. Front-end systems have long been the focus of banks‘ concerns, as they are seen as a platform for customers to transact at their convenience. They are also seen as a potential driver for reducing branch office traffic, potentially reducing costs. The pandemic places more emphasis on operational flexibility, operational readiness and continuity. Organizations are now acutely aware that not being prepared for the unexpected is no longer an option. They must be able to deliver sales and services through digital means.
Q: What is the inherent challenge in bridging the gap between the operational side and the client side?
A: The biggest challenge is culture and strategy. Culturally, banks see operations as a cost center and not as a driver of positive customer experiences and growth. Banks are relentlessly investing in front-end growth engines while squeezing every ounce of productivity out of operations. Strategically, banks fail to think and execute from end to end. Investments are made in silos without understanding the impact on the end-to-end value chain. This hinders service delivery and limits return on investment.
Q: How do you overcome the challenge?
A: It requires measuring key service drivers, understanding which internal capabilities most affect those drivers, and then improving them. Banks need to take a balanced approach to improving their operations through improvements in technology, automation, processes, people and business rules while thinking end-to-end. Unfortunately, there is a tremendous back and forth between sales and operations, as operations often get incomplete information that does not follow business or risk rules. This back and forth increases the capacity. In the organizations that I have supported, we have proven that when sales deliver better quality applications, it translates into improved operating service, which in turn increases sales. The need for collaboration is essential to deliver a great overall experience.
Q: Can artificial intelligence play a role in helping the operational side bridge the gap between it and the client side?
A: AI can play a role, but there are other fundamental and incremental capabilities that need to be considered before moving to AI, which requires massive data and systems transformation to enable true intelligence. artificial.
Q: Again, thinking about digital transformation on the operational side, how can banks optimize business processes, such as mortgage creation or customer onboarding?
A: Banks should consider investments such as:
- Better admissions systems that can flag incomplete applications without requiring a human review
- Document imaging and analysis systems to eliminate human sorting of paper
- Automated workflows
- Bots to automate repetitive and low value activities and processes, and
- Investing in operational talent with modern data and technical skills will be critical.
Q: You were a banker and now a consultant. Can you share a key idea from the two experiences?
A: Use your data to measure key operational drivers of effort and experience. Data should be your voice of truth. It should clearly tell you where your investments are needed. Data can align stakeholders across the end-to-end value chain to improve service, efficiency and even sales as operations become faster and more efficient. That said, I have worked with operations managers at banks who struggle to effectively measure results due to too much data and a limited understanding of what drives results.
Edmund lawler is a contributing writer for BAI banking strategies.