New Automation Tools Yield Quick Rewards for Community Banks and Credit Unions Looking to Cut Costs and Improve Efficiency

If it’s been a while since you looked at tools to help automate some of your back office processes, now is definitely the time. There are some great tools available to support automation and the results are better and faster than ever.

At Quest, we’ve been busy over the last year working with customers to automate a variety of back office processes. The end result is that it frees up IT or other bank staff of manual and time consuming back office duties to focus on more knowledge-based tasks. Most of our clients are surprised to see how much time is really spent over a year by their staff in performing routine back office processes that, in the end, should really be automated. In this age of narrowing margins and cost cutting, even small automation projects pay for themselves in time savings.

A recent article in McKinsey Quarterly noted that “IT-enabling operations encompasses both automating processes (preventing customers from using paper, digitizing work flows, and automating or supporting decision making) and using IT solutions to manage residual operations that must be carried out manually (for example, using software for resource planning). By taking full advantage of this approach, banks can often generate an improvement of more than 50 percent in productivity and customer service.” (McKinsey Article)

Back office processes tend to, over time, become very inefficient and prone to error. Many banks who take the time to analyze these processes learn that they no longer even need these processes or that they can and should be combined with other processes. The buzzword for this type of activity is business process reengineering, but it is really taking a close look at the purpose of each process and how effective it is at achieving its goal. McKinsey Quarterly researched bank back office processes and found that “more than 70 percent of the applications were paper based, and of those, 30 to 40 percent contained errors and required reworking; applications often got stuck in one data-verification step for more than five days before being processed; and because of a lack of any IT integration, branch and back-office staff had to enter data manually from several systems into the work flow.” (McKinsey Article) At Quest, we have had a similar set of findings in the customers we support. Even the simplest processs can be set up to increase the quality of data in your systems as discussed in a previous posting.

By combining a thorough analysis of back office processes with an agile approach to automation, banks are recognizing quick returns. The agile methodology is designed to break projects into small parts that can be completed in a short time period. This is the new approach for automation projects because of its results-oriented focus, rather than the historically long development timeframes most people associate with system development. This is what allows quick returns for a bank. However, the key to success lies in the completeness of the business process analysis and reengineering and the bank’s ability to look beyond the current process and focus on the overall goal of the process.