Business Process Management In The Global Financial Sector

By M. Isi Eromosele

It is vital for financial services companies to ensure the rapid implementation of new processes to meet speed-to-market, service quality and compliance requirements.

This has to be done against a background of increased complexity. Financial institutions today combine a wide range of product and service offerings, across banking, insurance and asset management.

They operate in global and cross border markets. They have increasingly sophisticated and mobile customer bases. Increased regulatory vigilance and new corporate governance rules have the potential to add new layers of complexity and cost.

For all these reasons, the effective management of complexity and change is a key determinant of future success within the industry. Those who automate and streamline their operations most effectively will gain significant competitive market advantage.

Integrated Approach

Integration is now more than ever the key to efficiency, enabling lower transaction costs and increased sales volumes. This is true for capital markets, for retail financial services and for the corporate sector.

An integrated approach to business processes allows products, processes, systems, data and the applications that underpin them to evolve quickly. Whether it’s providing a loan, setting up an insurance policy or executing an investment instruction, optimizing the sale-to-fulfillment process will always win new business, cement customer loyalty and reduce costs.

Lack of integration across lending, payments and trading, on the other hand, simply presents your competitors who are more efficient with a huge profit opportunity.

Integration and process optimization not only has to extend across the enterprise, but must also embrace third parties who often supply key components of today’s complex, multi-instrument financial products.

A mortgage offer for example, will typically involve underwriters, insurers, the customer’s bank, credit reference agencies and others, as well as internal approval, accounting, collections, credit control, risk management, commission payment, incentive management, and business intelligence processes.

Improve all the connections between all the elements of a transaction and performance automatically improves.

The problem is that established financial organizations still have numerous, disparate, proprietary back-office systems which cannot keep pace. These limit the capabilities of even the most advanced front-end systems. The remodeling and implementation of new processes to meet the demands of dynamic change are severely constrained.

There are three objectives to aim for:

• Driving greater efficiency and value from existing systems and processes
• Managing the risks associated with dynamic change
• Achieving greater visibility and flexibility across complex operations

Implement an integration layer that leverages the power of the latest business process execution tools, enabling business analysts and application developers to bridge the current process execution gap.

This will allow the efficient re-use of existing process components and the applications that support them, to create new, more efficient processes, utilizing a free flow of data and collaboration between all internal and external parties to a transaction.

This will allow far greater operational and marketplace efficiency, while meeting regulatory and governance requirements.

Closing The Business Execution Gap

Closing the business process execution gap that currently exists within financial services companies will be a key determinant of future enterprise success, because it supports the crucial ingredients of business velocity and agility.

There is a need for an accelerated time-frame to move from process design to process execution in order to gain real competitive disadvantage. With current execution set-ups, the execution of some processes sometimes takes months, instead of weeks.

In capital markets, the need to execute a new or adapted instrument can involve process change deadlines of days or even hours. Being able to assemble the building blocks of a new trade by treating processes such as pricing, settlement, reporting, reconciliation as commodities allows a fast-moving trading floor to be even more responsive to the requirements of the market.

So making better connections and closing the process execution gap, is key to every kind of transactions in financial services company.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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