Kristin Moyer

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Kristin R. Moyer
Research Director
11 years at Gartner
18 years IT industry

Kristin Moyer is a research director in Industry Advisory Services/Banking and Investment Services. She has more than 17 years of experience across the global high-technology industry in a variety of roles. Ms. Moyer's research coverage includes card… Read Full Bio

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Improving Business Processes in Banking

by Kristin Moyer  |  April 17, 2009  |  2 Comments

Each year, Gartner does a survey of CIOs from around the world.  We ask them what their priorities are, both in terms of business and IT.  For 2009, one of the top business priorities for financial services firms is to improve business processes (formal results to be published shortly).  This is also a top priority across vertical industries (see Meeting the Challenge:  The 2009 CIO Agenda).

Banks are highly focused on business process improvement.  Existing processes and services need to be documented with a focus on identifying commonalities, redundancies and interdependencies.  The inefficiencies need to be moved, which will drive out cost and improve agility.  Process then need to be modeled and simulated.  Doing this will provide the foundation for business and IT transformation.

I see two main types of business processes in banking:

  • Horizontal business processes – HR, accounting and other functions that are common across vertical industries
  • Banking-specific processes – processes that are specific to the banking industry, for example lending

Banks should re-engineer horizontal processes (such as compliance, HR) and aggressively attack inefficient, non-revenue-generating processes. This will result in the need for fewer personnel, or enable personnel to shift to higher-value functions.

Banks also need to reduce application, process and data redundancy for banking specific process – for example, in lending.  The lending services hub is a centralized, rules-based engine that orchestrates and integrates lending services.  Central to this initiative is re-engineering the processes involved in lending, and removing redundancies, etc.  This lays the foundation for transformation and lasting competitive advantage.

2 Comments »

Category: operations     Tags: , ,

2 responses so far ↓

  • 1 Jesse Torres   April 18, 2009 at 12:05 am

    Kristen,
    I love you blog and I love your insights. However, on this one I think, while you are “ideally” on target, you are off from a practical perspective – at least with respect to one example you provide.

    You summarize (and certainly you are not given the benefit of the doubt here since I am certain you could have expanded your comments) that banks need to work on horizontal processes related to compliance. You state that by doing so banks can eliminate personnel and focus on higher added-value activities.

    In my career I have functioned as a chief operating officer as well as a chief compliance officer. I have worked as a bank examiner for the OCC and as a consultant for KPMG. In all my years of banking (nearly 20) I can assure you that with rare exception, compliance examiners will not get it. These folks are driven by a process that includes the dotting of “i”‘s and crossing of “t”‘s. Process improvement – and quite frankly, leveraging of technology, is not high on their list. In fact, most compliance examiners would glaze over with such discussions.

    I wholeheartedly agree that redundancies need to be eliminated. Any institution that would require such a reengineering is likely large in scope ($10 billion plus, in my mind) because smaller organizations are more centralized in their compliance efforts.

    While in theory, your points make sense, in practice, with regard to compliance, they don’t jive for most bank in the country (small to mid-size) since the compliance role in those tends to be centralized.

    Let’s face it, regardless of how important an institution thinks compliance is, most classify it as a “cost” center. As such, the goal with cost centers is to keep the costs down. As such, most banks already have an eye towards maximizing what they spend on compliance activities.

    http://socialmediabanking.blogspot.com/

  • 2 Kristin Moyer   April 18, 2009 at 4:34 pm

    Thanks for reading the blog Jesse, and thanks for sharing your point of view. The main point I was trying to make was not about compliance, but rather that business process improvement should be a key priority for banks across both vertical and horiztonal processes. I totally agree with you that “mentality” is an issue – “it’s always been this way…” In addition, re-engineering is just one of the improvements that needs to be made. Banks have many opportunities to improve upon process automation as well.