Executive Summary / Abstract
Rapid Growth along with Social Responsibility:
IndusInd bank is among the first of the new-generation private-sector banks granted licenses in the mid-nineties, driven by the process of reform in the banking sector in India. The bank found out that there is a wide business growth potential for the various banking and security products along with other services it offered, provided they could become customer centric, scale up their operations and at the same time maintain cost efficiencies and targeted service levels.
Furthermore, in late 2008, the bank observed that the existing account-opening environment had grown more complicated, due to changing market environment and regulatory mandates.
The bank experienced that the manual movement of original physical documents resulted in a greater turn-around time (TAT) for the account opening, KYC and client on-boarding process. Moreover, for the documents transferred via courier, there was risk of physically losing them in transit.
The escalations and intimations were done manually via post / email. It was further observed that this manual process was prone to errors. The business process was subjected to high operational risks. The bank also needed to have a Business Activity Monitoring tool to monitor the operational and functional metrics.
The bank procured Newgen's BPM product suite-OmniFlow™, Document Management System- OmniDocs™ and Distributed Scanning solution- OmniScan™, to implement the project named IWorkS with the following objectives:
- Optimize manual work by changing how work is done rather than eliminating manual work itself and provide a systematic solution for implementation of processes.
- Improve cost efficiency by streamlining work handoffs and automating work routing.
- Raise employee performance by managing the available capacity required to complete a given amount of incoming work.
- Provide visibility into each individual piece of work allowing the bank to match service levels to the potential value of each customer.
- Decrease the transaction costs through elimination of paper based work routing and retrieval of paper records for post issue servicing and also through improvement in employee productivity.
The same platform was extended to many other processes and is currently being further expanded to accrue additional business benefits to the Bank.
The solution is environment friendly and enables gainful employment of differently abled members of the community employed to manage scanning hubs.
The bank reaped huge benefits by tapping the growth potential through Newgen’s scalable solution which enabled improved turn-around-times (TATs), enhanced operational efficiencies and adherence to regulatory compliance.
Some of the key challenges were as below:
- High transaction volumes coupled with high annual growth rate being envisaged along with increasing geographical spread.
- Multiple products across CASA and Third Party Products being serviced across a wide geography through separate operating models as suited for each sourcing channel.
- Process implementation and monitoring not fool proof: Due to the spread and the multiplicity of processes, accentuated by the changes in the external environment like regulatory changes as well as competition, the changes to the operating processes were very frequent. Without a system tool, manual implementation of the processes was not foolproof. Variations could creep in at different centers, which were difficult to detect and impacted a uniform customer experience.
- Manual monitoring of operational metrics: The core banking system did not provide metrics for each work item for each stage of processing. Rather these systems only gave data for one of the stages in the process i.e. Account opening. Most of the customer issues occur pre and post account opening, for which there were no system metrics. These metrics were manually tracked and were costly to record due to it’s duplicity of work and could at times be inaccurate.
- Process redundancies: All processes had significant redundancies around data capture, work forwarding since manual recording was done at each stage. The data captured at the previous stage remained in individual department PC files and was created afresh at the next stage.
- High cost of operations: The cost of operations was high due to manual work forwarding, movement of physical files through courier between branch and central operations, physical storage at field offices as well as costs and delays associated with the retrieval of physical records.
- High degree of operational risk: With all account / transaction documents existing only in physical form, without digital backup, the degree of operational risk was very high in case of a disaster which could impact the physical storage. Work rerouting and distribution across various geographical locations was also not possible due to dependence on the physical documents for processing.
- Non standard customer service: Due to variations in process implementation across locations and time taken to secure central operations approvals, the customer service and customer experience was not uniform across the various branches of the bank.
Process in brief
The bank procured Newgen's BPM suite- OmniFlow™, as a universal Workflow Solution with underlying document management system -OmniDocs™ and centralized scanning solution-OmniScan™.
Newgen automated the account opening process which is known as IWorkS Account Opening Process in the bank.
Along with automating the a/c opening process, the following additional processes were automated as well:
- Deposit Acknowledgment Slip: IWorkS helps branches to generate Fixed Deposit acknowledgement slip which can be generated at the branches and handed-over to customers. This helps branches in achieving Customer Delight while the processing is centralized.
- Additional Fixed Deposits: IWorkS enabled STP processing of customer requests for additional Fixed deposits
- Renewal Instructions of Existing FD: IWorkS automates change in renewal instructions of existing Fixed Deposits. This helps branches reduce TAT and track status of instructions.
- CPU Resource Management: IWorkS also provides CPU (Central Processing Unit) real-time dashboards of status of applications currently lying in various processing buckets that will hit various CPU in next few hours/days. This helps CPU to plan shifts and resources.
- Regional Dashboards: BAM (Business Activity Monitor) a real-time dashboard helps regional teams and product team to track MTD activities at product, branch and sourcer level. BAM provides reports on New Account logins, Booking Status and FTR (First Time Right)
- Mobile Short Text Messages: On introduction, IWorkS generates Mobile Text Messages which are sent to customers with a Reference Number and contact details of Contact Center which helps them to track status of applications.
IndusInd Bank Demography
At that time IndusInd Bank had 250 branches across India and targeted at opening 100+ new branches in 2010 - 11. Branch Network of IndusInd Bank is across all categories of Cities including Metros, Semi Metros, Urban and Rural locations and two Representative Offices in Dubai and London to cater NR customer base and relationships from Middle East and Europe.
Initially, the bank had been undertaking manual processing of Account Opening which was distributed across branch locations. In early 2008, the processing was centralised in Mumbai to have better control and free branches from processing work. With growing volumes, centralisation led to increased TAT in both processing as well as exception resolution due to physical distance between branches and CPU. Moreover, compliance mandates were making the process even more complex to manage.
- The bank needed a scalable process platform with capabilities of rapid expansion, visibility into operations and ability for continuous improvement.
- As a leading bank of the new-age, focusing on technological initiatives for meeting its business objectives, IndusInd Bank had been constantly taking new steps to increase the focus on customer service, and increase its operational efficiencies. The Bank had computerized all its branches and Centralized Banking Solution (CBS) was already in place. The Bank also deployed several electronic delivery channels such as ATMs, Internet Banking, and SMS Banking etc.
Implementation of BPM solution for automating and streamlining the business processes was the next logical step in view of the above initiatives and to meet these requirements Newgen – a leading provider of BPM and DMS solutions was engaged by IndusInd Bank.
The Key Innovations
Although the financial services industry successfully automates many processes, manual work in Operations endures. Some manual processes and process steps are not easily eliminated, usually because they,
- Correct the inevitable errors of automated processes
- Require human judgment that is difficult to convert to automated decision logic
- Involve handing over work from one step or process to another
Newgen provided the bank an innovative solution to overcome all the above problems.
Newgen’s workflow management systems offered a new way to optimize manual work by changing how work is done rather than eliminating the manual work itself. Workflow systems improved cost efficiency by streamlining work handoffs and automating work routing. They raised employee performance by managing the available capacity required to complete a given amount of incoming work. Furthermore, the workflow technology provided visibility into each individual piece of work allowing the institution to match service levels to the potential value of each customer.
Project helped in fulfilling the mandate for Green Banking:
Bank is recognized as Green Bank with various initiatives such as Solar ATMs, Save Electricity Campaign, Plantation, Environmental awareness amongst employees and society. IndusInd Bank is also recognized by National Geographic Channel for its Green Banking initiative and Community Goals. The project helped in truncation of paper through digitization and thus promoted Minimal use of paper in the organization.
Project helped in fulfilling CSR initiatives of the Bank:
Since the solution was so user-friendly and easy to understand, the bank was able to further its social and civic responsibilities towards the physically challenged community.
In line with the CSR initiatives of the bank, all scanning HUBS in South Zone of India are managed by Differently abled people. Process of receiving inward documents, Scanning, Image QC and Physical Management is managed by resources having disabilities.
The implementation of Newgen BAM solution (Business Activity Monitor) enabled business owners to take full control of their business operations by providing real time dynamic reports on the monitoring screen. Having real-time visibility over key business operations was a major concern for organization to make informed business decisions. Process or people oriented reports, generated upon dynamic data keep on refreshing on the monitoring screen. Key performance indicators, shown on those dynamic reports help business owners understand the real time business scenario.
IndusInd sends short messages to customers/prospects who apply for new accounts. The customer receives the information at key times in their engagement cycles. This is a part of a deliberate strategy to welcome customers, build loyalty, and provide periodic updates. These messages could be Welcome messages, informational updates, reminders and thank-you messages.
Based on the reference number sent to customer through short message, customer can then enquire about the status of application. Contact center provides accurate information from IWorkS about the status of application. This includes the status till welcome kit dispatch and acknowledgement status.
A key for any process is to track First Time Right instances of workitems processed on workflow. This is also an indicator for Quality Input and Speedy Processing. The solution has helped the bank to achieve significant improvement in FTR which is helping productivity and performance of operational resources.
The Account Opening Process was implemented by IndusInd Bank on very fast track across all 230+ branch network at the time of implementation along with Representative Offices located abroad.
The Newgen solution benefitted the bank in the following ways:
- The solution encompasses a customer centric approach, thereby fulfilling the main objective of efficient Account Opening
- The solution has enabled the bank to reduce turn-around-time (TAT)
- The bank can now use the Newgen solution to achieve overall operational excellence
- Quick and easy retrieval of documents, resulting in better and faster decision making, as well as manifold increase in the efficiency of the entire process
- The system prompts the users regarding what to do and how to do, thus adhering to the “Best Practice” for processing the Account Opening form
- Cost cuttings resulting from documents being converted to digital scanned images as well as reduction in photocopying and courier costs
- Optimum use of the available resources with minimum investment in new resources
- Web based access to images from different locations
- Rights based access to the system for ensuring security
The implementation also involved setting up of independent scanning HUBs for high volume regions and branches. Entire process is compliant with norms of RBI (Central Bank of India) and Audit. Scanning HUB is not only responsible for Scanning but also responsible for Physical Form Management. IndusInd has implemented process in record breaking time of 3 months which involves setting up scanning HUB at 30 key locations and training and initiation from all 230+ branch network.
The solution provided by Newgen catered to the various sub-processes for the Account Opening process. The solution worked upon and enhanced the following sub-processes:
Branch Operations - The account opening applications were received and introduced in the workflow by creating work-items. An initial data entry is performed and the work-item is routed to the branch verification work-step. Cases can be routed to decision making authorities for Deviations from this workstep. After the approval of Branch Verifier the workitem goes to Branch Ops workstep and documents are now set for dispatch to scanning HUB. The classic example of this process is like passenger boarding on air-craft which involves Airport Entry, Security Check and Flight Boarding after all due diligence. Similarly Branch Operation processes an account by introducing the account to the Workflow by capturing key details to provide workitem visibility in the organization. Post this, using dynamic KYC checklist complying with RBI (Central Bank of India) guidelines, the form is verified and sent to the scanning HUB for Scanning and Account Boarding.
Scanning at HUB - The documents for all the introduced work-items against each application number are scanned at the Branch/HUB. The image QC is carried out at the Branch/HUB scanning station.
Quick Account Opening - It involves Document Verificatio at the CPU along with the data entry make and check feature. This is accomplished by viewing the scanned images available in OmniFlow™.
Welcome Kit & Audit – Post account opening after due diligence most important is to deliver Welcome Kit to customer and track status of deliverables. Solution is also interfaced with Courier feed files which updates status of Welcome Kit to Account to provide information such as Delivery Status, Delivery Date, Received By, Courier Reference Number. All opened accounts are audited by Bank’s auditor from compliance and inspection point of view.
Signature Download - The OmniScan™ cropped signatures are available in OmniDocs™. The Newgen solution provides the feature of searching and downloading the signature along with the application form documents. This further leads to faster processing of documents.
Tatkal Process - The solution takes care of the Welcome Kit dispatch management system.
IndusInd Bank took an initiative to centralize a number of back office operations so as to improve operational controls, bring about standardization and reduce the operational work at the branches.
With Centralization, the bank experienced that the physical movement of documents resulted in a greater turn-around time (TAT) for the account opening process. In case of exceptions, the exception resolution added further to the a/c opening TAT since documents had already reached central operations and exception notification was not online.
A COE (Center of Excellence) was formulated and it works towards the continuous improvement of the processes.
The operational metrics were not real time, which lead to reactive managerial intervention.
Web services based Integration: For example, the integration with the signature management system has been done through Web Services.
The same platform was also used to automate the following processes, thus extending the business benefits of the BPM platform manifold:
- Accounts Payable – Processes vendors/service partners invoices and bills on fast track using DMS workflow
- Procurement Process – All procurements in IndusInd Bank are supported by DMS workflow and follow approval matrix along with budget for procurement in amounts and numbers
- Employee Certifications – All employees who opt for new certifications during the course of their employment can update their certificates to Human Resource department
- Life Insurance – Process to confirm LI business and incentive management
- Mutual Fund – Process to confirm MF business and incentive management
- General Insurance – Process to confirm GI business and incentive management
- Human Resource – Process to scan employee records and documents.
- Loan Processing System – Loan document processing workflow
- Inward Cheque Scanning – Cheque scanning initiative for Customer Responsiveness in Internet Banking and eStatements
- CAD Processes – Disbursement process flow for Credit department
- Cheque Return Escalations – Process flow for managing returned cheque to respective branches
Journey of this implementation is still on in IndusInd Bank and we have pool of demand of various BPM with DMS such as Employee Claims, Legal Documentation, Records Maintenance etc.
Center of Excellence
A COE was established with the cross-functional team from IndusInd and supported by the Newgen consultants works on continuous improvement of the processes.
- Installed an automation system that was automatically moving single piece of work across various disjointed base systems so as to improve efficiency and provide a way to match operating capacity with employees.
- It provided visibility to employees for all work items pertaining to them. It helped in streamlining their activities in an efficient way.
- It provided easy access from desktops to all documents and processing status of the case. The previous actions taken are easily traceable from the extensive audit trails.
- The best in class operations and productivity standards were established through analysis of the time and motion data coming out of the workflow databases rather than using traditional averages that could be skewed by idle time, low skilled staff and poor practices
Management was looking to set best-in-class operations and productivity standards. However shifting people from paper to images was a major hurdle. Also it was taking more time and users were not completing the tasks as defined in the process. This resulted in low FTR and more processing time. Newgen’s BPM solution enabled analysis of the time and motion data coming out of the workflow. The data helped bank to address key areas for improvement. The benefits of workflow solution encouraged employees to process the cases efficiently.
Due to the availability of all the data, shifts can be managed for agents based on the incoming load. Also expertise has been identified for specific type of activity. The same helps in faster processing of cases. The event-based data is available in the system and SMS messages to customers on event updates become possible.
Benefits accrued to the bank were both direct and indirect. Reduction in operating costs, travel and communication expenses, office stationary and infrastructure usage were some of the benefits achieved by centralization and implementation of the BPM solution. The bank also achieved other benefits like increase in productivity and reduction in IT infrastructure costs through better utilization of the resources.
With each agent handling more number of transactions there were cost savings on agents. Previously, the bank used to maintain a photocopy for each application set, but with the new system no photocopies are required, and this has led to drastic savings. Apart from this, savings were realized on courier costs, as applications need not be sent back.
IWorkS is helping in saving paper which earlier was being printed and used for AOF Checklist and KYC Checklist. 8 pages were printed per application and so far approximately 5,00,000 applications have been processed on IWorkS (Total papers saved by workflow and DMS is 5,00,000 * 8 pages, which is 40,00,000 paper sheets). For 5,00,000 applications branches now don’t need to maintain photo-copies, which is approximately 15 pages per application and comes to 75,00,000 pages. Thus, IndusInd has saved Photocopy (Toner, Electricity and Photocopier Life), Paper, and Storage costs.
The process TAT was improved by 60%. Reduced TAT for Account Opening processes enabled the bank to add more customers into its portfolio with more than 3,00,000 New Accounts Opened, more than 250,000 of which have been opened in the last six months. These Account Opening requests (Current Account, Savings Account and Fixed Deposit Account) have been processed on IWorkS, built on the Newgen BPM Platform.
- Processing capacity increased by over 41%
- Completing the process first time right (FRT), improved by 29%.
- Adherence to SLAs improved by 36%
Best Practices, Learning Points and Pitfalls
Best Practices and Learning Points
- Consistently tracking prospects, opens new opportunities for cross-selling and up-selling
- Greater customer satisfaction, which demands immediate and informed response to their queries, is effectively implemented using Newgen’s BPM solution
- The BPM solution establishes explicit and specific responsibilities with the stakeholders, thereby ensuring greater drive to accomplish work at their end.
- Scaling up of operational activities enables the bank to keep pace with business growth and demands
- Compliance and Audit enable easy KYC Process
- Incorporation of banking norms in a very short duration due to flexibility and improvisation of processes
The bank procured Newgen's BPM product suite, called OmniFlow™, as a Universal Workflow Solution. It is a scalable, multi-tiered, platform independent Workflow Management solution built using the robust server-side Java technologies. It has a scalable architecture to cater to not only the small-to-medium workgroup usage but also the enterprise-wide workflow management requirements.
The Newgen Solution:
Newgen’s OmniDocs™ solution tightly integrated with the OmniFlow™ solution enables document scanning, indexing, archival and retrieval processes once the documents/forms get transferred in the workflow. Thus, Newgen provides the BPM enabled workflow platform for implementing an automated Account Opening process.
Newgen’s OmniScan™ enables the document scanning for the customer(s) at the Regional Processing office followed by transferring the documents to the BPM enabled workflow. Newgen developed a workflow automation solution for the Account Opening Process. With the help of this process, the bank is able to scan and process the various documents thereby promoting paperless processes across the bank. This has led to a drastic reduction in the turn-around-time.
The Technology and Service Providers
The solution was implemented by the Newgen Implementation team and no third party team was involved in it.
Newgen consultants proposed a solution to the bank as per the best practices followed. The system study, solution design and implementation were carried out by Newgen professionals.
© Copyright: This case study was originally published in the Excellence in Practice series in the book entitled “Delivering BPM Excellence”
Get the complete book in both Digital (download PDF) and Print Editions at http://futstrat.com/books/Delivering_BPM.php published by Future Strategies Inc.