Working on the right things
For better or worse, a crisis focuses our attention. So many nonstrategic and nonessential activities are already dormant. Don’t restart them. Instead, use a zero-based budgeting process to reassess your 2020 plan so those costs and distractions stay cut.
As you prioritize your spending, you may be tempted to make some snap decisions. For example, you may be told, “Let’s cut marketing. It’s discretionary and in our control.” But topline growth is strongly tied to marketing spend, and cutting indiscriminately could cede ground to competitors. Are you proposing cuts to a marketing analytics program that lets you see customer preferences at a detailed level, or a sponsorship with an ambiguous ROI?
Working on things the right way
It’s amazing that banks were able to disburse billions of dollars in stimulus funds with only a few days to prepare. But for many, the struggle to modify existing systems resulted in a lot of manual work to process the loans. The pandemic also revealed some shortcomings of past automation programs, in which banks deployed robotic process automation (RPA) as a point solution without looking at the bigger picture.
We recommend taking an end-to-end view of processes—from the client’s initial data input to closing, or from a customer’s initial request, to servicing their product, to closing the request with resolution. This approach requires investment, and it also might require reallocating some of the technology budget from front-office digital tools to infrastructure for back-office operations. When this is done right, the payoff can be achieved in as little as 12 months, and the outcome may include an operations platform that can scale up or down quickly.
Balancing operational resiliency and sourcing efficiency
There’s an inherent trade-off between operating simplicity and redundancy. Some banks are discovering they’ve added too much risk by concentrating their vendor programs too aggressively. But dialing supplier concentration up or down to prepare for life after the pandemic is only part of the story.
We expect to see a shift in thinking, in which banks will likely look to digitize and streamline their scale processes before even thinking about outsourcing. Whether you keep work in-house, turn it over to external vendors or take a hybrid approach, digitizing your processes may let you incorporate remote working as needed. For many, that means including the workflow technology, collaboration tools and new sourcing risk management capabilities that are currently absent in many organizations.
Going forward, we expect to see many banks diversify their sourcing strategies and move toward a multi-vendor, multi-location norm.
Providing smarter customer service
The pandemic highlighted the need to reimagine customer interactions. Some banks quickly innovated by using excess staff in branches to take calls and service customers, but that highlighted issues with training, access and inflexible processes, to name but a few.
Leading organizations now look to build a high-tech, high-touch customer servicing model that enables virtual work from home when needed, and over 90% of which involves non-human interaction. Making the new model work will require cloud-based infrastructure, supported by artificial intelligence (AI) and natural language processing (NLP) technologies, to quickly assess a client’s need and solve it as efficiently as possible. When done well, the new models can provide banks with better customer service, more flexibility for workers and cost efficiencies.