To return to healthier ROEs, more regional banks are contemplating fundamental changes to their operating models, particularly in the area of costs.
McKinsey & Company, December 2017
Improving operational efficiency has been a long-standing mandate for financial institutions. But it’s particularly critical now as top-line revenue growth begins to slow for many banks. With the majority of costs in bank operations accounted for by office employees, it’s easy to see how improved employee productivity positively affects operational efficiency
However, without a clear line of sight into operations at the enterprise level, organizations fail to make significant improvements in efficiencies. Attempts to track important information are often impeded because various pieces reside in disparate systems. As a result, managers struggle with incomplete information about how best to apply resources.
Gaining a clear line of sight
What’s needed to give managers an enterprisewide view of employees’ activities is a solution that easily demonstrates how work flows. They need to understand where work flows as expected, where bottlenecks reside and where rework occurs, for example, to optimize the human, physical and digital assets of the financial institution. They need a clear line of sight.
Although piecemeal solutions have been available to capture detailed information, now solutions such as FIS’ EPIC provide a holistic view of operations by pulling information together from separate systems.
Such solutions allow for monitoring individual workstations on a real-time basis through automation, which tracks the “workday in the life” of each employee more efficiently and accurately than traditional time-motion studies. Monitoring arms managers with real-time information to quickly move the needle and answers questions such as:
- How many systems are employees logging into?
- How much time does each spend on specific applications, including “non-productive” ones – for example, who is shopping on Cyber Monday?
- How well does each employee perform? How productive are they?
- How do actual work hours compare with pre-defined work hours?
- Are desktop software licenses optimized?
The solution also should be able to restrict access to unauthorized content to strengthen the first line of defense, reduce fraud potential and ensure PCI compliance.
Currently, many financial institutions are trying to define and capture activity-based costing – for example, the cost of updating account information, the cost of rework, and so forth. Real-time process mining can inform organizations about how much time it takes to accomplish detailed activities. In turn, financial institutions can identify where to focus improvement efforts and implement automation to reduce tedious manual processes.
The holistic view is now within reach
It is FIS’ experience that automating the line of sight into operational processes delivers a return on investment within 12 to 15 weeks of implementation. It increases organizational productivity by 10-20 percent and process efficiency by 10-20 percent to achieve an overall cost benefit of 15-30 percent.
How? First, it provides actionable insights into business processes, which enable the institution to focus efforts where it will most benefit and optimize assets – human, physical and digital. It answers the key question: Is the time spent on activities commensurate with the value provided? Second, it improves productivity by delivering actionable insights to enhance employee performance and utilization.
The holistic view builds a foundation for continuous improvement through automation and process reengineering.