Financial services firms will be adopting business process management (BPM) tools and techniques at rates outpacing those of other industries this year, because the efficiencies and cost savings they can create are vital in an industry quickly losing profit margins as products become commodities.
The message hasn’t been lost on vendors. For example, EMC Corp. in Hopkinton, Mass., is updating its BPM suite in the latest version of the Documentum enterprise content management platform set to be unveiled Monday (see story below).
The new EMC tool enters a field crowded with offerings from suppliers like FileNet Corp., Pegasystems Inc., Tibco Software Inc. and others.
Vendors of such tools can find significant opportunities among banks, brokerages and insurance companies, since these businesses can run more efficiently and boost worker productivity by automating processes, said Peter Redshaw, an analyst at Gartner Inc.
No need for paper
One of the drivers of BPM in financial services is the amount of electronic imaging for items such as checks, mortgages and loan applications, Redshaw said, noting that Gartner has found that BPM is spreading quickly among such firms.
Yet Redshaw said banks are moving cautiously for fear of exposing sensitive data on the Web-based applications.
The First National Bank of Arizona said that by rolling out a BPM tool from Ultimus Inc. in Cary, N.C., it was able to eliminate 20 paper forms related to access to selected corporate data.
Previously, the bank used numerous paper forms that required multiple signatures for varying levels of authorization.
“It saved an enormous amount of production time having that one-stop shopping versus going onto our Web sites to locate the forms for signatures and then get them signed and follow up manually,” said Karen Scheer, operations and technology business liaison at First National in Phoenix.
Scheer said that creating a centralized database for all information related to requests, as well as a central online location for requests and approvals, simplified management tasks
By definition, automating manual processes improves customer service, Redshaw said. “Automating things done manually on paper makes things faster, and customer service looks better — like processing a loan application in six days instead of six weeks,” she said.
Regulations compliance
Sumitomo Mitsui Banking Corp. in Tokyo used the e-Work BPM tool from Metastorm Inc. in Columbia, Md., to facilitate worldwide Basel II and USA Patriot Act compliance. Rise Zaiser, vice president of business applications at Sumitomo Mitsui Bank, said it cost the company less than $500,000 to set up the system at a data center in New York.
The system automates the process of performing background checks on new banking customers through the U.S. Department of the Treasury’s Office of Foreign Assets Control, Zaiser said.
Metastorm’s e-Work platform also allowed the bank to create a globally accessible system for tracking customer activity while interfacing with multiple systems to decrease manual input and improve data accuracy for Basel II, which regulates the amount of cash reserves a bank must have.
“It enabled us to not only set up standardized processes to capture information, (but) we can also change the options people have for filling in (data) fields depending where they are in the world. For example, a ZIP code is a term used in the U.S., and a postal code is used in the rest of world,” Zaiser said.
Many of the processes at the bank had previously been performed manually, requiring personnel to stamp or sign forms and then send them to other employees for approval.
EMC unveils new Documentum version
EMC Monday is unveiling a new version of its Documentum content management suite based on a new underlying architecture that the company says can fully integrate individual products in the suite.
Version 5.3 adds a unified architecture that lets each Documentum application share the same code base, leading some analysts to describe the package as a true product suite.
“What’s new is that they’ve now pulled together disparate elements: workflow, rules engines and content management. Now they have a suite of offerings,” said Peter Redshaw, an analyst at Gartner.
EMC is looking for the new version, especially its updated business process management tool set, to increase its standing in the financial services industry. “
Up until now, we couldn’t sell into insurance, financial applications, mortgage processing or loans,” said Lubor Ptacek, director of product marketing at EMC’s Documentum division.
Documentum’s Business Process Manager suite can now automate exception handling for things such as bounced checks or questionable invoices.
The new version also includes collaboration tools that can be used to automatically invite appropriate business users into an online Web forum and populate that forum with data related to that business transaction. Then the decision made by business users in the forum automatically triggers settlement of the exception. For example, in the case of an invoice, the tools would authorize payment.
