What does a digitally reengineered banking process look like?

michael's picture

After my last post trumpeting the need to do to internal lending processes the same thing we did to check processing, it occurred to me that not everyone in a bank grew up in operations.
Maybe not everyone knows what a proof machine is was.
If not, then many may not realize the benefits that resulted from the process reengineering that took place when banks started dealing with checks as images instead of stacks of paper.
If Agile Banking had been engaged to assess and reengineer item processing to be a high-performing digital process, the results would have looked something like this.

ASSESSMENT of OLD WAY CREATIVE VISION of NEW WAY BENEFIT
Customer leaves work early to get to bank before it closes to deposit check with bank’s teller Customer deposits check with mobile application while eating cereal before bedtime Fewer people involved
Customer convenience
Teller balances transaction Customer verifies amount automatically read by mobile application Reuse electronic information
Courier transports check to bank operations center Image sent electronically to bank operations center Fewer people involved
Eliminate latency
Bank proof operator encodes check Metadata is OCR’d and retained with the image Rekeying eliminated
Reuse electronic information
Proof operator balances check within batches of debits and credits Transaction already balanced Eliminate reconciliation
Sorter operator sorts item into foreign pocket Check image and metadata electronically sent to correspondent Eliminate manual rework
Foreign items pocket bundled with a printed cash letter Electronic cash letter created Eliminate printing
Reuse electronic information
Courier transports cash letter to Federal Reserve Electronic cash letter with check images and metadata electronically sent to bank checks are drawn on Fewer people involved
Eliminate latency
Cash letters sorted by bank checks are drawn on n/a Fewer people involved
Eliminate manual rework
Inclearing cash letters created n/a Fewer people involved
Eliminate manual rework
Eliminate printing
Courier transports Inclearing cash letter to bank checks are drawn on n/a Fewer people involved
Eliminate latency
Sorter operator runs Inclearing cash letters through sorter Electronic inclearing cash letter processed Fewer people involved
Reuse electronic information
Corrections and rejects worked and rerun through sorter Corrections and rejects worked on PC workstation Fewer people involved
Reuse electronic information
Items posted to customers account Items posted to customers account
Items physically stored until statement drop date Item images stored until retention period expires Fewer people involved
Reuse electronic information
Eliminate manual rework
Items sorted by statement account number n/a Fewer people involved
Eliminate manual rework
Items matched to statement and inserted into statement envelope Item image metadata matches it to statement Fewer people involved
Reuse electronic information
Eliminate manual rework
Mailroom applies postage and mails Statement ready notification emailed Fewer people involved
Customer receives checks once a month with statement Customer views checks online as soon as posted Eliminate latency
Customer convenience


The fundamental rules of process reengineering are all covered here:

  1. Should have the customer in mind. CHECK
  2. Should include the end-to-end process. CHECK
  3. Should result in fewer people being involved. CHECK
  4. Should reuse electronic information. CHECK
  5. Should eliminate rekeying. CHECK
  6. Should eliminate printing. CHECK
  7. Should eliminate latency. CHECK
  8. Should eliminate manual rework. CHECK
  9. Should eliminate redundant reconciliations. CHECK

These same benefits can apply to all banking processes when the processes are changed to take advantage of technology such as imaging, workflow, and data integration.
There’s not going to be a Check 21 law that forces banks to reengineer internal processes for high performance.
Agile Banking’s consultants and engineers are experts in banking and digital process transformation.
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-CroalDude