Wednesday, 13 April 2011

BPM in the Financial Sector

To date, many organizations often start a BPM project or program with the objective to optimize an area that has been identified as an area for improvement. In financial sector, BPM is critical to make sure the system delivers a quality service while maintaining regulatory compliance. In Recent years several financial organizations have merged, willingly or otherwise. Others have changed their status, moving from investment banks to traditional banks, to acquire more government protections. Meantime, governments throughout the world are introducing new regulations to prevent practices that are presumed to have caused some of the current problems.  Mergers always result in two sets of processes that need to be merged into a common process. Changes in status also require that new processes and business rules be implemented throughout the organization. And, of course, new regulations require new practices and new business rules. All such changes require process analysis and redesign.

There is a great deal of reluctance in the financial sector for BPM adoption, one of the primary reasons for this reluctance is the high expectations placed on BPM. There are a number of reasons for the failure of BPM:  There is a Failure to adopt a holistic approach to BPM, Obtaining organization-wide support is important for a successful BPM implementation, especially senior-management support. This is because a BPM implementation seeks to change the very way the organization functions and this will not occur without support. 

There is also a Failure to adopt an ongoing approach to BPM, Many companies treat BPM as a one-time IT project, neglecting to learn from experience and tweak services and processes for optimal benefit. Instead, many companies remain content with the small gains of a one-time redesign. Finally there is also a Failure to look beyond process automation, what many companies fail to do is to focus on BPM as an enabler to deliver a better customer experience.

However if applied properly, BPM offers financial firms a huge number of opportunities:  BPM allows for Integration and process optimization which can reduce the time lag between sale and completion to enhancing the customer experience and optimize revenue in any financial transaction.  BPM also allows for a structured and powerful approach to Process Discovery combining the ability to change a new process easily while maintaining a high degree of control as required by a financial industry process. A new product or process can be launched in a short time, optimized easily to reach a matured process status with the next decision point of integrating with other existing systems.

Easily the most difficult problem for financial firms today is compliance management. Financial firms today are practically under siege from multiplying regulatory frameworks. Achieving compliance is an seemingly-endless struggle, marked by high costs and time-consuming processes that change on a regular basis and require repeated effort to stay compliant.  Many of the difficulties of compliance, however, can be avoided with effective BPM tackling process definition and process monitoring, which are at the heart of compliance. BPM technology allows businesses to automate and standardize processes that are both auditable and consistent, which allows the enforcement of rules-based behavior across information silos. On the process monitoring side, BPM automatically captures information on a company’s processes, as required by a number of regulatory mandates, and creates an audit trail. 

There are a number of key advantages that Business Process Management offer financial organizations. However, these advantages are not attainable unless BPM is applied in a holistic, ongoing, organisation-wide manner and treated as a means to better overall business performance - rather than merely a tool for automation and minor cost savings.  Applied in such a manner, BPM has the potential to deliver not just cost savings, but the strong revenue gains that automatically come out of a service-centric organizational ethos.

All information presented here is © copyright Carkean Solutions Ltd., 2010 - Not to be used without our permission - The views expressed here are the views of an individual not the corporation

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