If you are reading this blog, there is a high likelihood that you are an employee or client of a bank. What would you think if you knew that global banks are still partly performing some client-centric processes using paper forms sent by mail for processing? You may think, rightly, that this is highly inefficient and not ecologically friendly. Even worse, these operational bottlenecks can be found in multiple corporate functions. However, this is where BPM solutions provide a remedy for these operational shortcomings.

In this blog series on Business Process Management (BPM) solutions, we aim to:

1. provide an in-depth analysis of the capabilities of these solutions
2. explain the value they create, with some real-world examples
3. highlight any challenges that may occur when implementing them

This first blog provides an introduction, focusing on:

1. the historical evolution of BPM
2. an explanation of the developments from workflow solutions to BPM and finally iBPM
3. a deep dive into their features and the opportunities they offer

Global financial institutions continue to perform a significant amount of mundane, repetitive, and low-skill tasks manually, generating little value while stretching their pool of available talent. Consequently, employees spend a large proportion of their time on routine activities which could be automated. Business Process Management (BPM) offers an opportunity to shift the focus of the employees’ time more towards clients, business-generating and value-adding activities.

Historical evolution and business setting of BPM

BPM as a corporate concept dates back to more than forty years ago, when IBM first introduced a semi-automated process to route documents by applying pre-determined business rules. In the 1980s, business processes supported by BPM software led to significant improvements in the industry.

The business environment is changing rapidly, competition is intensifying, and financial institutions are under pressure to remain competitive and operationally efficient, whilst also complying with local and global regulations. Over time, organisations have shifted to a more customer-centric business approach and have started to use digital technology, including BPM solutions, to accelerate business transformation. Today, BPM tools can interpret vast amounts of data to create meaningful insights and can also be used to streamline processes and drive operational efficiency. Overall, this results in a more rapid creation of greater business value, improves customer satisfaction, and thereby increases competitiveness. New market entrants such as Challenger Banks have found innovative ways to overcome the shortcomings of well-established and less agile institutions by using best-in-class technologies (including BPM) to create more effective banking operating models.

From Business Process Management (BPM)…

BPM is an approach to orchestrate process automation and improvements, spanning across people, systems, and technologies within an organisation. Business Process Management enables companies to:

• evaluate
• measure
• change
• monitor

processes by identifying new methods for achieving their objectives.

BPM applications can be divided into three distinct types, depending on the business use case:

• workflow tools
• “standard” BPM
• intelligent BPM (iBPM)

All three types of application map standard business processes to identify and eliminate bottlenecks, reduce costs, and increase operational efficiency. The Figure below shows an overview of the different types of BPM solutions:

BPM helps drive strategic operational change through process orchestration, automation, process modelling, API connectivity and user-friendly interfaces. The advantages from using BPM solutions range from cost and time reduction through automation to better alignment of customer needs and a reduction of operational risk. Overall, BPM aims to increase operational efficiency by enabling employees to perform tasks better, faster and at a higher quality, creating a strong competitive edge.

…to intelligent Business Process Management (iBPM)

iBPM, compared to traditional BPM, enriches complex business processes with additional capabilities such as artificial intelligence, process mining and cloud features. iBPM tools utilise business rules, data mining, machine learning, cloud computing and event processing features to provide real-time analytics and cutting-edge data insights. iBPM constitutes the most advanced type of BPM software solution. The Figure below provides an overview of the capabilities of iBPM:

Selected use cases for the application of BPM and iBPM solutions

In the financial services industry, there are numerous opportunities to apply a workflow or BPM/iBPM solution to automate processes. On the one hand, a workflow tool may be very well suited for simple task automation due to its rapid implementation time and low cost.

For example, an email-based requests process can lead to an unmanageable number of queries received daily and an overflowing mailbox. Instead, a workflow application can apply decision management rules to transform an email query automatically into a case created in a dedicated workflow-based digital process, add a label based on content recognition and channel it to the relevant team. Workflow solutions also enable user-friendly interfaces and KPI dashboards, rolled-out in record time. Thereby, the solutions offer several features within one single application, reducing the need and complexity of having separate systems for one business purpose.

On the other hand, BPM and iBPM tools both have wider applications than just workflow management as they aim to improve overall business benefit across functions. Consequently, corporations might aim to first analyse and create readiness in the envisioned area(s) of improvement (e.g., client-centric modules, business management, payments processing etc.) in the business function in scope before selecting the right BPM capability to enhance its productivity. The Figure below illustrates selected iBPM uses cases in financial services, with a focus on Client Lifecycle Management (CLM):

Additionally, iBPM allows to execute and track processes from products/services to customer communications, due diligence, and KYC verifications while maintaining highest standards of risk management, and compliance.

Conclusion

Global financial institutions are looking more than ever for ways to increase operational efficiency, reduce costs and retain their competitive edge. Now is the perfect time to act. End-customers are becoming less tolerant of inefficient processes, which can have serious consequences for a business. Clients expect simple, intuitive, and user-friendly processes supported by suitable technologies which drive the overall user experience, for example through customisation and automation. BPM solutions present a tremendous opportunity for firms aiming to deliver change and digitalisation, not only in their internal processes but also for their customers. While a workflow tool may constitute an excellent choice for companies considering BPM solutions for the first time, an iBPM suite will be more suitable for a “BPM-advanced” institution aiming to scale and automate operations further.
In our next blog, we will consider in more detail: “Why use BPM solutions?”, by highlighting their strategic business value whilst also shedding light on the challenges brought about by the BPM and iBPM solutions.