The Birth of Financial Management
seeing is real continuous improvement at many significant financial institutions, both at an individual process level as well as the ability to tie together disparate information systems more seamlessly.
And STP hasn't stopped here. The term is now being applied to the insurance industry where it has come to mean internal data sharing and process cooperation along the business value chain. Since insurance policies reflect varying degrees of sophistication, from simple personal lines automobile coverage to the most complex product liability coverage, the goal of STP for insurance could be throttled somewhat by the complex underwriting decision making that is necessary for certain products. Nevertheless, the movement to incorporate speed, quality and accuracy will further drive the insurance industry to decompose certain process pieces that can be automated more readily, combining them with a workflow map that connects each process stage with its critical documents.
My last example of process change and knowledge capture in financial services concerns the investment management, asset management and account management business line. While this process is frequently associated with financial advisors and brokers and their customers who invest money in stocks and bonds, it has come to mean so much more in the past several years. In fact, there is barely an institution in business today that does not have some business unit focused on gathering and retaining your assets to invest, be it a bank, broker or insurance company.
In addition, investment management is one of the most profitable areas of all financial services and literally no one is going without it. As an example, Nationwide Insurance recently opened up a bank for high-net-worth customers. They found that their life beneficiaries were leaving too often with their insurance settlement and depositing the money somewhere else. Nationwide sees it just as much their domain, and core competency, to handle estate investments as well or better than any other financial institution.
Therefore, this particular area of financial services has received significant business interest as well as substantial technology investments over the past couple of years. It has grown in stature because the amount of accumulated wealth worldwide is outpacing other areas of the financial services business.
As companies pay more attention to how investment management services and its data are tied across business silos of the firm—be it insurance or investments, home loans and mortgages, commercial loans or credit—workflow and robust information management soon follow. Today, these areas are now being tied together through expert client information systems on the front-end and comprehensive document and data management systems on the back-end. While the most innovative institutions are still adept at best tying together a few of their information and technology systems, integration continues to be a major driving force for process improvement and quality.
The Customer Is King
Ultimately, it is up to the organization's senior leadership to encourage and promote best-in-class operations, invest in methods to capture re-usable business knowledge and build best practices so that all corporate information can be readily accessible, understood and enacted upon in the best interests of the customer. Otherwise, the customer simply chooses an alternative. As a recent article in Fortune magazine titled "The New Rules" stated, "Old Rule: Shareholders Rule. New rule: The Customer Is King."
Fred Reichheld, the noted Harvard Business Review writer and author of books such as "Loyalty Rules," says that the average company loses half of its customer base every four years. He and his current employer, Bain & Co., have come up with a new metric called "net promoter score," which measures the likelihood of a customer returning.
That's the bottom line for every financial institution today—customer satisfaction and profitability. Knowledge management, quality management and process management are just three of the disciplines that allow you to make the best use of your information.
The following are four summarizing principles that exemplify how these disciplines combine together in your organization to have a significant impact on your business:
- Create a systematic understanding of your business processes, both the ones that directly touch the customer as well as those that sit in the back office;
- Begin to connect and cross-connect those processes, not only within business units, but where it makes sense, across the enterprise;
- Apply relevant technology that allows your information to be collected and maintained centrally as well as integrated across your business units; and
- Share critical business knowledge, processes, and best practices across the organization and with all your knowledge workers.
While these techniques have a deep and rich past, they continue to evolve. The finest financial institutions have been using them for years, and the best keep finding ways to improve on them. Whether you deploy these practices internally or are connecting them directly with your customer, they represent an opportunity to deliver world-class customer service, something that will always allow you to stand out amongst your competitors.
Hummingbird Ltd. is a leading global provider of enterprise content management (ECM) solutions, enabling organizations to manage the lifecycle of enterprise content from creation to disposition. Hummingbird Enterprise™ solutions enable organizations to address critical business needs, such as information management, business continuity, compliance and risk mitigation. Please visit
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