When Roberto Mercadante joined Citibank Brazil as senior vice president of operations and technology, he was asked to lead an engagement program bringing efficiencies to the commercial bank's onboarding and loan approval processes. What he found was a manual workflow wrought with fat-finger mistakes, poor communications, and turnaround times that would make anyone cringe.
Unlike the corporate or consumer banks, the commercial bank works with small and midsized companies -- a segment that is nearly constantly investing and buying other companies, so time is money. Commercial businesses want loans approved in weeks, not months, and money in accounts and ready for investment as quickly as possible. These expectations were a challenge.
In an interview at the annual Tibco Now conference, Mercadante said one of the first processes that needed changing to make these cycle times possible was to update the customer onboarding process. "We did an analysis and found there are over 300 activities to do step by step, and that all have to go right to open the relationships with the company." In addition to working between many isolated systems, a lot of documents needed to be handled. "Contracts would take 10 and sometimes up to 20 signatures, and if, for some reason, a contract was wrong or you were missing something, you had to redo the process. Usually these signatures are from executives who don't have time for this."
Utilizing Tibco's set of business process management (BPM) solutions and Spotfire software for real-time analytic dashboards, Mercadante went to work automating the onboarding process. It worked -- fantastically.
All paper documents became digital. Documents that were once sent by mail over months were managed by an image capture solution that would compress the information and forward it within minutes or even seconds. Cycle time was reduced by 70% in the first month of automation. The standard deviation of the cycle was reduced by 90%. Rejection level by the back office, once 60%, dropped by more than half, and the sales force's productivity increased by 50%.
"That project became a reference for us in terms of what it's possible to do in terms of BPM, and not just for Brazil, but for all of Citibank," Mercadante said.
Last year, the Workforce Management Coalition (WfMC) of more than 2,000 companies gave his team the Global Award for Excellence in BPM and Workflow for transforming the commercial lending process. Since the project was recognized as one of the world's top 10 for BPM, one might expect it to take off and be emulated by Citibank's other territories.
But that's easier said than done.
For a bank offering an array of services in 160 countries, adhering to regulatory standards locally and globally is a huge, complex task. Citibank is well recognized for its enterprise resource planning (ERP) team, whose common, well-organized structure takes care of core business functions for all countries. Mercadante said this makes up 70% of Citibank's infrastructure. The rest, including credit approval and commercial lending onboarding, is left to the regional offices to enact based on local laws and regulations.
"The business processes are there, but is there's no information system to support those processes," he said. "Some of these functions and processes are not even public… But these are core banking functions, too, and I believe solutions like [Brazil's BPM] is the type of thing we need."
Mercadante is well aware that Brazil is not the only place with a level of maturity around BPM, and he knows there are several "islands of solutions" in Citibank around the globe. But the regional offices are working in uncoordinated ways, largely unaware of one another's solutions. They are not collaborating on best practices.
If major steps in the process were standardized, he said, a significant percentage of the technology could be "copy-pasted" from one region's infrastructure to the next. However, from a political standpoint, it's very difficult to disseminate new practices. Like many other large banks, Citibank has vertical businesses, in which the sharing of best practices is encouraged, but they quickly become too complex to implement.
Mercadante is preparing to launch a global internal survey to understand where his bank is in terms of BPM, how mature it is about this, and which processes still see the most pain points. "I will collect information, analyze it, do an assessment, and propose a plan. We will go to NYC headquarters and say, 'We know what we're talking about.' I doubt they even know who and where we are, but I want to come and say, 'Here's a proposition.'"
The situation is too big and complicated for a simple answer. "If you go to the ERP system, you see an extremely well-organized structure taking care of the whole world. They are taking the specifics and incorporating it into this. But that is ERP for 70%. How about other set? I'm trying to make the point that there is room for some processes outside of ERP, and credit approval is one of them. It needs support, and BPM is a good solution."Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio