Managing Content for Competitive Advantage: ECM in the FS Industry

8 March 2012

By George Parapadakis, IBM’s head of enterprise content management (ECM) Strategy in the UK

How can financial services (FS) firms empower employees to manage their own content? How do they discover and manage dormant content? George Parapadakis, IBM’s head of enterprise content management (ECM) Strategy in the UK, examines how these issues affect the financial services industry and what can be done to improve matters.

Around the world, banks and other financial institutions are still suffering from the downturn that started with the 2008 crisis. However, like the rest of the economy, financial services companies must continue to focus on key imperatives, including the promotion of new, organic growth strategies, services differentiation, long-term profitability and reduced risk. In the wake of the downturn, financial institutions have been focusing on organic growth strategies, such as growing the average number of products per customer, retaining existing customers and attracting new ones via the mobile channel and better marketing using social media and allied customer analytics.

Organisations must accomplish these growth goals by improving the customer experience with whatever technology or strategy they pursue, while simultaneously reducing risk and costs – not an easy task. New opportunities and challenges require new solutions to efficiently address them, but few institutions have the money or time to rip and replace their existing infrastructure. Budgets are tight post-crash so instant Return on Investment (RoI) is often demanded. Banks need to leverage and enhance the rules and practices that work, while adding new cost effective tools to help meet the demands of a new marketplace.

Enterprise content management covers a group of technologies that typically deal with unstructured information; data which doesn’t fit in a relational database and is not transactional information. Typically, it lives in files and emails; media folders, streams or blogs and increasingly on twitter feeds, Facebook and other social media. All data that is text-based can be classed as content which ECM could deal with. Non-text based video and similar social media can be more challenging and often requires separate ‘big data’ analytical tools.

The specific ECM tools for managing text-based information will depend on the type of project; whether it’s capture for reducing paper or content analytics for business insight. When it comes to banking and other FS institutions, advanced case management is one of the most used tools.

Financial institutions broadly use content management solutions in alignment with existing core applications to address customer issues associated with their principal business activities, such as account opening, lending and call centre customer service. Often, cases driven by process exceptions – including customer issues, disputes, complex credit granting, special pricing requests, fee amnesty, fraudulent transactions and identity theft – must collect and manage all of the documents, data, content, collaborations, policies, rules, analytics and other information related to the case throughout its entire lifecycle. Exceptions management is a key efficiency improvement that I think can ECM can deliver.

At most financial institutions, critical customer relationship information is siloed, and departments lack a comprehensive view of a customer’s history, habits and other open cases. Decision-making becomes a guessing game, and the financial institution is exposed to unnecessary costs, bad credit risks and missed revenue opportunities. Additionally, siloed case management applications may provide employees with an outdated, incomplete or inaccurate view of the customer information.

Some of the more basic content management solutions in the market are little more than extended file sharing tools. They do not integrate with process rules to address compliance with corporate and regu­latory mandates, and they lack real-time and proactive analysis capabilities that can provide guidance and decision-making support. Without these analytical capabilities, helping to handle the ‘big data’ flows through organisations these days, content man­agement solutions cannot help financial institutions identify changes and process enhancements which may reduce future case management escalations or pinpoint problem areas.

Optimising outcomes with ECM
Financial institutions can gain significant competitive advantage and differentiation by rethinking how they automate critical customer interactions. By leveraging powerful capabilities, such as integrated analytics within their case management solutions, institutions can consolidate vital informa­tion across line-of-business (LOB) processes – such as credit scoring and acceptance – into intelligent, cross-LOB shared services. As a result, advanced case management should provide a 360-degree view of the customer and a real-time, enterprise view of active and closed case histories.

Aside from integrated analytics, an effective case management solution requires process automation, business rules, collaboration and social computing skills. With these ingredients in place, FS institutions are empowered to drive growth and profitability in three key areas: improving customer service, mitigating risk and reducing fraud, and addressing regulations and facili­tating electronic discovery.

With ECM each case can have just one set of documentation and one history, detailing interactions from across the company. All authorised employees have access to current, com­prehensive and accurate information, which is crucial to resolv­ing cases quickly and with an optimal outcome for the customer and institution. Think of an insurance claim, for example, and the various adjustors, assessors and other hands it has to go through before a pay-out can be authorised.

With a 360-degree view of the customer interaction history and with collaboration tools at their fingertips, contact centre, customer relationship management (CRM) and other knowledge workers can use analytical and proactive intervention information to respond to inquiries promptly. They can also better understand the full story when a customer has a question or files a complaint, improving the likelihood of a quick and fair resolution. This level of awareness helps to improve customer service, loyalty and trust, ultimately contributing to customer retention, acquisition and the bottom line.

ECM is designed to give employees the information to properly assess the value of – or the risk posed by – a customer. By consolidating accurate, complete and current customer transactions, the solution can enable financial institu­tions to analyse a customer’s multiple engagements and to detect patterns of cheque fraud, identify theft or accounting irregularities. Plus, advanced case management capabilities help employees to analyse multiple fraud cases and thus better predict high-risk prospects before they actually become customers. The procedure, backed by efficient technology, can also provide financial institutions with better business intelligence, auditable documenta­tion, rules and analytical tools to demonstrate consistency, facilitate compliance, optimise performance and improve efficiency.

ECM can also help to address emerging and increasingly strict post-trash transparency and reporting obligations to prevent costly regulatory violations. In addition, FS firms can use it to align customer profiles with business rules. For example, a customer that fits a specific profile can be automatically identified and offered personalised treatment. Moreover, ECM can separate business rules from business processes so those rules can be easily modified and business processes made more flex­ible. For example, a financial institution could update credit conditions, approval requirements and special approval privi­leges without IT assistance, resulting in an increasingly agile organisation that can respond quickly to customer needs and changing marketplace requirements.

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