Simplifying A Whole Retail Bank And Increasing Its Productivity By 47%

The Client's Challenge

Members Equity Bank (ME) had undertaken a lengthy process to select a new retail banking system. However, the CEO was concerned that the selection process might have been flawed. An earlier assignment found that the real business requirements had not been defined prior to the selection process.

This assignment was to quickly define the real business requirements, simplify the existing operations and assess whether the ‘real’ requirements would be serviced by the selected software.

Scope

All areas of the Retail bank including:

• mortgage application to settlement
• personal loans
• credit cards
• account establishment
• marketing and sales management
• customer and account management
• finance
• securitization
• SME home-loan based business financing.

This represented eight concurrent process streams.

Approach

ME appointed a core full time team of 22 with a further 50 staff from across the country also being trained

We assigned 3.5 consultants to lead the assignment

The eight process streams were simplified concurrently over 14 weeks.

In the last four weeks of the assignment, the previously selected retail banking system was objectively evaluated (and scored) against 12 requirement scenarios generated by the Simplification process to measure the degree of fit and identify any gaps.

The Results

• Productivity was increased 49% across the Retail bank

• The actual time to process a mortgage application was reduced by 47%

• The time to give an ‘in principle’ loan approval was reduced to less than15 minutes

• The number of steps for marketing material approval was reduced by 74%

• All loan areas were combined to provide a single loan application/credit approval process

• The number of people with credit decision making authority was reduced from 128 to 34

• Policies on lending rules were clarified and embedded into the new system

• Alternative approaches to securitization were identified

• Immediate cost reductions of more than $5m were identified (and quickly implemented)

• Three major ‘holes’ were found in the pre-selected software package for remediation

• Over 70 staff were educated, coached and trained in Business Simplification techniques

• Over 120 staff were involved in the project and committed to its successful implementation.

The Payoff

The assignment assured the CEO that the selected software would meet the bank’s needs

The simplification work brought the bank closer to the design of the software, making it easier to configure the software for the bank

The three areas requiring customization (to fix the ‘holes’) were able to be evaluated on a business-value/customization-cost trade-off basis.

The overall cost of the software implementation project was reduced by $500K (due to less process steps to be supported) while the business value was increased from a projected $7m (in the original business case) to $57m.