The payments industry’s historical need for integrated solutions has typically been organized around a core set of central processes, with batch file exchanges providing communication between applications. But with the advance of technologies over the last three decades, the adoption of web-based, service-oriented models, XML data exchange, TCP/IP network usage, and multi-lingual web screens are now very commonplace. Financial institutions are seizing the opportunities to combine new technology with their existing enterprise systems and coming to realize the advantages of deploying workflow technology to further improve efficiencies and increase flexibility.
So What is Workflow?
A workflow can be defined as the automation of a business process, in whole or part, during which documents, information or tasks are passed from one participant to another for action, according to a set of procedural rules. A workflow can therefore be illustrated as a group of tasks to include business policy rules and staff assignment logic.
One theme that has clearly emerged over the past decade is a shift in discussion from standard transaction processing functions towards the workflow-related functions that are necessary for operational efficiency across the enterprise. This shift has created questions such as ‘How can I reduce my cost of operations?’; ‘How can I reduce the manual effort involved in an activity?’ and ‘How can I better utilize my resources across geographical locations within the enterprise?’
In response, industry thought leaders have also shifted to take these technological developments into account. To offer better support for enterprise business strategies, workflow technology is absolutely essential, and is threaded through the very core of the system architecture.
The Benefits of Deploying Workflow
Using integrated workflow process technologies provides multiple benefits to financial institutions, typically including:
- When replacing an existing manual process with an automated process, existing paper-based steps can be eliminated or greatly reduced
- Automated escalations and forwarding for decisioning greatly reduce the time lags within an existing paper process
- Multiple check and approval processes across geographic or departments are tracked and synchronized
Quality of Services
- Mitigation of rekeying of data
- Reduction in errors and rework
- Reduced backlogs
- Increased customer satisfaction
Increased Response Times
- Automatic policy checks can remove user intervention. For example, the system can request letters to be sent out to request missing information
- Reduced time to process end-to-end applications
- Removal of paper-based systems
- Reduction in paper costs, storage space and office space required
The key challenge for issuers is targeting the most viable type of manual processes to automate; as not all automation will provide the same magnitude of savings or benefits.
Trends in Workflow Application
The issuing business is characterized by many manual processes that range from the relatively simple to the challengingly complex. Below, we can begin to identify those processes in the payment system domain that provide the best returns when re-engineered with automated workflows.
The main driver in using workflow is to reduce the operational cost of boarding and approval of applications. The speed of processing a new card application is often seen as critical to the success of the bank and provides an increased competitive advantage.
Integrating all relevant external systems and monitoring all functions within the workflow process not only yields time savings but also reduces the costs of processing card applications.
It may typically take several days to process and approve an application in a paper-based environment, but this time can be reduced to minutes using workflow systems.
Automating applications processing also increases a user’s well being, as simple, repetitive tasks are removed, leaving them able to engage in more complex and rewarding tasks.
Standard collection systems can be enhanced with the use of value-added systems. But can we do more to help reduce costs?
The simple answer is yes. Many client projects require the core functional system boundary to be extended, without affecting the core processing functionality, to try and solve integration and automation issues.
The workflow system can then be used to develop and automate deeper manual processes that are not part of the core card processing functionality. For example, where an account moves to a legal collection status, a workflow system can be used to track the progress of litigation cases.
The agility to extend the reach into other enterprise systems offers further opportunities for cost savings. For example, a bank’s customer-facing website could offer repayment plans for clients who are unable to pay, and record workflow actions for bank staff to establish these plans, including automation of send letters, contracts, system updates and phone call actions.
Fraud Case Management
Fraud has implications for many enterprise departments, including customer services, card production, legal, accounts, chargeback and risk departments to name a few. The use of workflow in fraud management has enabled organizations to better manage fraud cases as they arise and provide a more efficient enterprise-wise coordination.
By automating the fraud case tracking, waiting times and events, reminder alerts, and service-level monitoring in a single case, the complete process is streamlined.
Chargeback processing typically involves multiple departments, and needs to follow complex payment association standard rules for presentation, conditions and timelines.
In this approach, the workflow process resulting from an initial customer service complaint or exception item can be logged and tracked as it proceeds to chargeback, re-presentment or arbitration.
As the workflow system automatically monitors the state of a chargeback case, new changes in data — for example, a new re-presentment being received — can be matched to the original request and either automatically processed or provided to the chargeback team for processing.
Such workflow automations can act as a linkage to better coordinate staff in different locations to produce greater efficiencies across the enterprise.
Customer Service Processing
Audit and risk management departments need to ensure correct credit and bank policies are followed when undertaking cardholder credit limit changes. In many cases, the decision process is external and requires additional supporting documentation from the cardholder.
Workflow processes have been developed to allow automated policy and approval processing. These range from simple workflow processes that check and approve the customer service agent credit limit changes to complex workflow processing that takes requests from the front-line customer service agent, undertakes policy checks, actively queries credit bureaus, obtains third-party application credit scores, and checks current account-card blocks and payment-due status. The credit limit change can then be automatically approved, declined or forwarded for manual decisioning.
The workflow process enables streamlined decisioning processing to cross multiple departments and operate in a highly effective manner, mitigating the need to re-key information that has been made readily available to all concerned at the moment of the initial request.
The adoption of automated workflow by an institution requires careful and detailed reviews of work processes, system components and user interaction points to avoid potential integration problems.
The combination of workflow functions with rules-based systems is widely accepted as the baseline for both inter- and intra-organization workflow processes.
However, it remains the case that many manual processes in the payments industry have yet to be automated and not all systems are able to support workflow service interaction. The challenge is in designing and providing system components that can seamlessly employ workflow functions to integrate the multiple complex processes produced by multiple applications in multiple geographical locations. But with the advanced workflow technologies available from chosen processors in the marketplace today, we believe the tools are available to help meet the challenge.