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The servicing backbone: no department is an island

John Donne’s famous saying, ‘no man is an island, entire of itself’, is as true today as it was when he wrote it 400 years ago.  And it is particularly relevant at a time of economic downturn, when the ability to take a holistic view of the enterprise and its commercial relationships - allowing early warning of risk and exposure, so enabling a prompt, effective response - can mean the difference between the business surviving or going under. 


Yet just as companies often have an exaggerated view of how the business is ‘different’ from others - with their perceived unique problems and issues - so within the organisation itself departments take a similarly false, siloed view of their operation and the difficulties they face.


The reality, by contrast is that by taking an agile, process-centric view of each part of the business, there are often more similarities than differences.  As a result, by adopting a servicing backbone incorporating sophisticated case management capability – a common technology underpinning the various layers of business functionality – the same underlying solution can be readily adopted across the enterprise.


When addressing a particular pain point within a bank – in, say, payments exceptions and investigations – many of the same basic processes can be seen to apply to, and therefore be re-used in, other parts of the business such as cash management, derivatives or treasury.        


By implementing a solution within one department therefore, it then becomes relatively straightforward to extend this to other business functions, simply by extending the underlying servicing backbone and capturing the requirements of each. 


This has two key benefits.  First, it speeds up the development process as, by cloning the common capabilities across departments, the business can focus simply on developing specialist department-specific applications.  And second, with the barriers removed, the different applications can appear on one screen so that any indicators of potential concern can be flagged up immediately and the appropriate judgments made.


Financial institutions have been trying to achieve this for some time, of course.  Historically, one problem with the traditional data-centric approach has been that much of the data captured in huge data-warehouses is almost immediately out-of-date.  By contrast, in adopting a rules-based BPM solution such as Pegasystems, the data can be tracked at the point of contact with the customer and instant action taken.


Such an approach also offers benefits in implementing strategic policy change.  Today, Board-level decisions are being made around a return to ‘core banking’: similarly, ‘Know Your Customer’ (KYC) policies are being developed to ensure compliance and get a better handle on issues such as profitability and exposure by individual account.     


In each case, the servicing backbone allows the businesses to achieve a holistic and granular view of its data by customer: it also enables Board-level policy changes to be interpreted and implemented rapidly at operational level, so avoiding the costly ‘execution gaps’ which commonly occur with traditional IT implementations.    


And this is not just fine theory.  At least one major international financial institution has already put in place Pegasystems’ servicing backbone to provide its own ‘early warning system’ and drive rapid and effective change throughout the business. It may just be coincidence, but they happen to be one of the more strongly placed financial institutions in the current credit crisis.


by John Everhard, technical director, Pegasystems


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