Business Process Management and Reengineering: Are They Fads or Necessities?

22 Oct

In the aftermath of the global financial crisis, it could be argued that the banking industry is under more regulatory scrutiny than ever before. Essentially, the crisis was due in part to little or no regulation. The passing of acts such as the Dodd-Frank Act, means that banks need ongoing compliance. For the purpose of this post, I will look at how banks are implementing Business Process Management (BPM) and the benefits attributed to it.

Business Process Management (BPM) is considered a crucial player in the financial services industry. Banks are considered one of the early adopters of BPM. The need for flexible processes and real-time responses is extremely high in banking. For example, a retail customer opening an account at a bank or a bank providing a letter of credit to their corporate client. Banks can benefit from BPM through Automated routine transactions, facilitate the handling of greater volumes of information, and reducing long-term application maintenance. There are a number of processes where banks can apply BPM, these include: overdraft processing, credit approval, administration and compliance. Customer retention is a key driver in any company’s objective of profitability, this requires a consistent, enjoyable customer experience. As a result banks need to improve operational efficiency by an enterprise approach and as outlined earlier, BPM supports this (Infosys, 2004)

A paper by infosys used the following example to illustrate the benefit of BPM in banks:

Barclaycard Germany

The company implemented a BPM solution in an initiative to reduce the time taken to process new credit card applications, the BPM benefits were plain for all to see. With the BPM solution, which managed all the steps involved in applications processing and integrates all necessary underlying systems, Barclaycard was able to cut the processing time from three days to just 18 minutes.

Based on my brief introduction to the topic, it would appear that, when correctly implemented, Business Process Management is a necessity, especially in the financial services industry.

Sources:

www.infosys.com/finacle/solutions/thought-papers/…/BPM.pdf

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3 Responses to “Business Process Management and Reengineering: Are They Fads or Necessities?”

  1. Alisa Addison January 10, 2015 at 3:01 pm #

    Thanks for sharing the post. Business Process Management benefits organizations in many different ways like enhance customer satisfaction, cost efficiency, increased productivity, improved process quality, better reporting of process performance etc.

Trackbacks/Pingbacks

  1. Business Process Management and Reengineering – Here to Stay? « So Opinionated … - October 23, 2012

    […] BPM and BPR are still relevant today as seen in blog by ‘aplusk22′. He speaks about how BPM is used by the banking industry to achieve greater efficiency and customer focus. ‘aplussk 22′ mentions a number of processes where banks apply BPM for example in ‘overdraft processing, credit approval, administration and compliance’. (https://sopinion8ed.wordpress.com/2012/10/22/business-process-management-and-reengineering-are-they-f…) […]

  2. Business Process Management and Re-engineering: Is BPR Relevant Today? « So Opinionated … - November 3, 2012

    […] previously talked about the important role Business Process Management (BPM) played in the Financial Services […]

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