The biggest fallacy in this reasoning (there are many, from
an economist’s point of view in doing a completely cost-analysis comparison) is
that it doesn’t take into account the cost of the things we’re not doing. The oft-used phrase “because that’s how we’ve
always done it” is the flip-side of the single “these are the things we’ve
never done” – which are usually the areas of highest cost and greatest
opportunity for improvement. Just
because something is inexpensive doesn’t mean it doesn’t actually cost us a
lot. Some cases in point, from the
recent past:
1)
Banks in England were slammed this week by
various ministers and government agencies, demanding that they account for how
much they’re doing to help the unfortunate people who were dealing with record
flooding of the river Thames.
Inflexible systems mean that merely accounting for who were the effected
customers was difficult and required many to resort to manual calculations;
politically-motivated promises of special handling and immediate changes to
treatments, offers, etc. were made by top management while the operational
execs scrambled to find ways to fulfill those promises reliably, repeatably and
provably. The net is that the cost of
responding to this weather-created crisis will far exceed the actual benefits
announced for victims.
2)
Banks in Australia are dealing with the
impending onset of new credit reporting practices that will effectively
multiply the number of customer complaints exponentially. The inflexibility of current operational
systems renders them a non-option for responding to this new regimen, dictating
that they spend large sums on new complaint and dispute capture and resolution
processes. Even these new systems must
be carefully vetted for adaptability and ease of use, as the growing body of
regulations is sure to be modified as experience mounts. In sum, the cost of building entirely new
systems arises from inflexibility that could have been avoided, were
flexibility valued highly enough from the start.
3)
In the U.S., banks face stiff penalties for
failing to adhere to the Servicemembers Civil Relief Act (SCRA) provisions on
special treatments for veterans. Flexible systems would be able to add data elements about their
customers to capture status data relating to military service, to create
automated “scrubs” to mark customer records appropriately, to provide a simple
way for customers to inspect their own data and
provide a standardized way for agents in any part of the bank to update
a customer’s relevant information in a way that allows the system to
automatically ensure compliance with the Act.
Inflexible systems make creating that new infrastructure so expensive an
undertaking that some banks have consciously decided to take the risk of
enforcement actions for failing to comply.
CMC’s CredAgility platform offers one thing above all: the
powerful flexibility to adapt your operation’s execution to meet ever-changing
needs and demands.
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