Digital Engagement Banking–Importance of Business Process Modelling

In my earlier blog I put forth the point, that a comprehensive knowledge of industry specific workflow is necessary for modelling an innovative business process.   I will illustrate this with the task of a ‘Customer Deposits Cash’ in the work flow ‘Cash Deposit’; then follow it up with the use case  modelling of business processes on the foundation of a workflow.

Workflow Task: Customer Deposits Cash

When the channel is a branch, what starts as ‘Customer Deposits Cash’ the end to end workflow of deposit into a checking account (CA) will be different from that of a line of credit (LOC). In the case of a CA, the final end point will be bank’s liability (increase); and bank’s asset (decrease) for an LOC. This of course is over simplification of a complex workflow with several sub-workflows. However a clear understanding of this level of depth is a critical success factor for process innovation.  A further extension to this workflow will be product pricing and transfer price mechanism.

Process Modelling: Digital engagement

In a digital banking environment for the task ‘Customer Deposits Cash’ the ‘interaction’ will be separate set of APIs or Micro services for CA and LOC. When designing the digital user journey process an industry experienced process modeler will have insights to those tasks that can be automated or made redundant. In addition flag the stages where analytics is necessary for decision making. Process modelling per se is not designed for capturing logic behind a task / activity or key business benefits that senior management is looking for.  This is the value add that a business analyst can deliver from the ability to compare and contrast the E2E process before and after the implementation.  There will always be the point that digital engagement is only the tip of an iceberg and has no impact whatsoever on the transaction processing system. This is accepted.  

Use Case:  Implementing Digital Onboarding and Origination

In simple terms digital engagement is that part of workflow previously done in a branch (assisted) that is segmented and offered as self service using internet technology on a variety of devices.  The workflow for a banking model of digital + brick &mortar will have both assisted and self service. However in the case a digital only bank models in all/most cases it is 100% self service including assisted services.

To know the true ROI, the suggested approach is to first document the business workflow (hence the emphasis on business knowledge) with annotations on value addition at each stage for a deep dive analysis. Map this to the extant process. Then redesign the process model in the context of digital engagement. This redesign is the stage for process innovation and optimization. This is the point where structured decisions that take time can be automated using machine learning and made auditable with XAI (eXplainable AI). So also the interactions with dependent external sources for decision making.

The redesign of process will consider unique ‘digital only’ characteristics such as pause and continue self service or pause self service and switch to assisted service. The continuation may be digital or in-person assisted. The model must factor in the parallel process with associated workflows; walk into a brick and mortar branch / screen sharing etc. These must be frictionless and not in conflict.  This is a best case scenario.

There are actors who ply their trade by gaming the system; money laundering is a case in point. After successful onboarding and origination, an inward remittance for USD 1 Million is received immediately. The process model must take cognizant of such outliers.  A bank’s compliance sub process will establish internal control rules in such cases. The decision to be made here is the control over transactions from digital front end by a virtual customer.

In summary, banking, globally is one of the most regulated industry. The business workflows are time tested and have passed audit scrutiny with built in internal controls. A change in process must not dilute the controls and expose a bank to risk. A business analyst who has industry experience and an in-depth understanding of banking workflows is indispensable when implementing a DEP. The implementation is a collaborative activity. The benefit will be minimizing risk with process innovation and optimization.  The bottomline a positive ROI.