Pub. 11 2021-2022 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S May • June 2021 19 BY JESSE MCGANNON, SRM Tactical Pillars for Quick Wins in Challenging Times T he challenges of 2020 included a landslide of changes in financial services, and the sheer effort by banking professionals to keep operations running was nothing short of historic. Although there will be some reversion to prior habits, consumers in 2021 have new expectations of their banks that will require more heavy lifting. Presently, many banks in the U.S. are engaging in highly complex projects to redesign their branches, operations and organizational charts. Fortunately, quick-win tactics can support these efforts. Consider the following “pillar” strategies that offer short-term cost savings and guidelines to set a foundation for operational excellence. Portfolio Rationalization Portfolio rationalization need not involve product introductions or retirements. But, given the changing consumer landscape, consider taking a fresh look at product portfolios. Due to the many changes in account- holder behavior, specific cost/benefit dynamics have also changed since pre- pandemic times. This fact alone makes re-evaluating and recalibrating existing portfolio strategies a matter of proper due diligence. Rationalizing the portfolio should include revising priorities, adding new features, and reassessing risk profiles and existing project scopes. Process Re-Engineering Banking executives have been under tremendous pressure recently to quickly implement nonstandard procedures, all in the name of uninterrupted service during socially distanced times. Though many working models will see permanent change, optimizing these processes early for long-term efficiency, security and customer experience is critical. As the digital curve steepens, banks will need to map out the customer journey across all digital channels to remain competitive. Some process re-engineering methods include eliminating workarounds, streamlining procedures, and updating legacy policies that are no longer relevant. Intelligent Automation Banks are increasingly leveraging technologies classified under the umbrella of intelligent automation. These include machine learning, robotic process automation and artificial intelligence – all of which have become especially relevant when dealing with multiple types of high-volume, low-value transactions. Automated workflows remove the clerical aspects of the process from the experts’ plates, allowing them to focus time and energy on more high-value activities. When executed well, intelligent automation works alongside humans, supplementing their expertise rather than replacing it. Increasingly, areas like fraud and underwriting become automated in repetitive and known scenarios, while more complicated cases escalate to personnel for further analysis. Supplier Contracts Auditing invoices for errors and evaluating vendor contracts might be the last place a banker would look to establish a quick win. However, our benchmarks suggest they can be a critical steppingstone to bottom- line opportunities. Existing vendor contracts often include inconsistent clauses and undetected errors (such as applications of new pricing tiers missed, etc.). Eventually, minor errors creep into the run rate, adding up over the years to significant dollar discrepancies. With extensive due diligence, it is possible to find a six to seven-figure lift simply by collecting intelligence on the prevailing market rates, the available range of functionality, and reasonable expectations for performance levels. The Bottom Line While the financial services industry has been keeping operations running uninterrupted, there is no time like the present to optimize operating processes. Accomplishing a few results early on can free up resources and support long-term gains. Executives should take the time now to optimize operating model structures to brace for what comes next. Looking into the increasingly digital future, consumers will continue to expect banks to reinvent and build up their operational models to greater heights. n About the Author : Jesse McGannon is Vice President at Strategic Resource Management (SRM) , providing advisor y ser vices for operat ional process improvements and technology strategy guidance for f inancial ser vices products . His technical exper ience in cross - border payments , faster payments , digi tal banking , and intel l igent automat ion has been appl ied in al l stages of project del iver y – from ini t ial strategy to target - state design and on through implementat ion. Throughout his 13+ years of exper ience in f inancial ser vices and payments consul t ing , Jesse has developed an expansive range of programs and infrastructural plans across the U.S. and beyond. Before coming to SRM, Jesse was employed at Accenture and advised large U.S. & Canadian banks , FinTech companies , credi t card networks , issuer processors , and communi ty banks .