Bits and Bytes: An Open Letter of Apology to the CIO

Top 10 Violations of a Repentant Ops Guy

Dear I.T. Professionals of My Past,

During the first dozen years of my banking career I was a user… an end-user, an ops guy or leader of ops people.  As your internal client, I had very little appreciation for the nature of your work, the constraints you operated within, didn’t care to educate myself, and should have been a better team player.  Now that I have walked a mile in your shoes working on the tech side of the business, let me say…. mea culpa bro. 

Below are the top 10 violations for which I am sorry.  Regrettably, I know I am not alone on these and observe the same behaviors today in even the most respected institutions.

 1)       I didn’t understand the nature of data but behaved as though I did.

“If the distance between apples and oranges is greater than the sea’s altitude, then display odd numbered vowels only during the customer journey.  Oh… and make sure my data is big, I need big data."

2)       I rejected every estimate provided in hourly increments as absurd measurements intended to obfuscate and delay getting to my needs.

“170 hours? That’s ridiculous.  I could build this by myself in one month using excel.”

3)       I gave business requirements the middle finger then I gave you the middle finger when you built the thing I asked for.

“I required a complete set of left handed golf clubs - how can I be any clearer?  Of course you should have known to include a squash racket, I’m a member at Bushwood.”

4)       I assumed to know what was a big effort and what was a little effort –and quite confidently, but had written no more code than you had forecasted losses.

“This should be pretty easy for the developer to handle.  All they need to do is….”

5)       I did not appreciate that you had limited capacity to serve multiple needy internal clients including marketing in the same way that my customers were waiting in a queue to be answered by a limited number of call center associates.

“If it’s not a compliance issue it won’t see the light of day – all we need to do is to get Compliance to call it an issue and it will move up the priority list – sweet.”

6)       I dropped passive aggressive threats that were unfounded in reality.

“Ok sure.  We can do without that feature for Phase 1… our roll rates are going to melt the polar ice caps but that’s fine… let’s move to the next must-have item on the list.”

7)       I expected you to completely eliminate human error instead of setting a higher bar for my staff.

“You’d be surprised, but I’ve got several employees who can’t remember their name when logging in.  You can automate that right?”

8)       I was captain obvious, schooling you on the need to provide good service and lower credit losses – as if you did not already know that.

“Now Bob.  You’ve got to understand that if our customers have a poor experience on the web site, they might go to our competition – right?”

9)       I made sarcastic remarks about how long it would take for you to get something done.

“We’ve got to log an IT work ticket?  Great… that will get done when the Eagles win the Super Bowl.”

10)   I assumed that the root cause of every production issue was a “testing miss”.

“Come on man! Who did you have testing this thing – let me guess, OFFSHORE?”

So what have I learned? 

Every c-suite executive worth their salt is forced to make difficult trade-off decisions – to maximize enterprise value making the most of limited resources; the CIO is no different.  If you think of yourself as a high performing operations executive and a member of a high performing team – you are well served to acquire some understanding of how software, hardware, and data work at the most basic level.  Finally - you have a choice to treat your technology department as a “vendor” or you can treat them as a partner.  You can probably guess which of those behaviors will get that business critical feature you need moved up that never ending priority list.

My bad… it won’t happen again.

Love always,

Matt

Branching Out: The Value of Self-Service

I recently came upon some interesting statistics showing exactly how mobile we’ve become as a society. First, we’re now seeing that the majority of customers prefer shopping online rather than in stores. While that fact may not be earth shattering (except for brick and mortar retailers), a few others I recently saw did catch me by surprise. For example, there are almost 3 billion people worldwide using the internet. And did you know that, starting in 2013, there are now more smartphone and/or tablets shipping than PCs? And the most compelling, to me, is that there are currently more mobile subscribers than there are people on the planet!  

While it’s clear that customers like to browse and discover in self-service environments, are we clear on exactly what that means to us in Collections operations? Well, for starters this isn’t something that is going to go away. We know this, but what we might not be anticipating is how quickly our other, more traditional, forms of customer interactions are going to diminish, or even disappear. It also means that simply providing a means for our customers to conduct bare-minimum-banking is not going to cut it any more. Customers expect (not just want) the same experiences and capabilities online, even on their phones, as they expect to be able to do in person or on the phone with our agents. Finally, have we thought about how our current online self-service offerings and experience impact our customers’ loyalty? Studies reported by Informatica in the UK have shown that satisfied customers are 83% more likely to be loyal, and that customer ascribe a high amount of their customer satisfaction to how their service providers handle them in online and social media transactions. We need to be able to interact with, and satisfy, our customers in their online interactions with us. 

What’s also apparent is that our legacy processes in place for collecting customer data will no longer be able to tell the full story. We need to broaden how we learn about and react to our customers’ buying patterns and transacting patterns, especially for those in collections: being able to effectively use this “metadata” directly affects our cost of collection. Without this information, we are not equipped to truly understand our customers, discern what motivates them and causes them to behave in a certain way so we can hopefully guide them toward the outcomes we want. Being able to gain this greater understanding of our customers, using both their data and this metadata to drive our strategies dynamically, is where we derive our competitive advantage. 

This is, of course, the fundamental value proposition that only a fully unified approach like CMC can deliver. Being able to capture the data and metadata within your automated business process workflows and to make real-time decisions as new information comes in, as you can do with CredAgility-based solutions, gives you both the flexibility and power to drive superior effectiveness and results. See your CMC representative or contact us at sales@cmcagile.com to discover how to unleash the effectiveness and efficiency gains that our clients are enjoying, all while improving their ability to conduct provably compliant operations. We’d love to talk to you about it.

The Top 5 Things We’re Expecting to See in 2014

2014 already? Where did the time go? Every January, most of us are instilled with a renewed enthusiasm to make this year better than the last. Amid a number of accomplishments and wins in 2013, we are certainly aware of challenges the industry faces as we head into 2014! Here are the top 5 things we expect to see in 2014:

1. Regulators continue to drive (too) much of the agenda for banks in 2014

The OCC’s latest guidance of 10/31/13 on Third Party Vendor Monitoring will force even more stringent risk management principles to be applied, putting pressure on Vendor Management teams to come up with more, and more provable, ways to oversee third party vendors. And the CFPB’s ANPR of 11/30/13 will reappear as new regulatory guidelines that will further reshuffle the deck for creditors, third party agencies and debt buyers. Whereas the banks that invested heavily for the past 1-2 years in risk and compliance systems are struggling to get more business benefit out of those investments, others will come to realize that they can’t avoid biting that bullet any more.

2. Despite regulatory challenges, top management focus turns increasingly to efficiency and yield

Collections operations are being scrutinized once again for efficiency measures as the U.S. economy gains steam and lending begins returning … repeating a familiar cycle. This time, however, many organizations will also be facing vendor-induced decisions brought about by the end-of-life of some key collections and recovery package solutions. The good news, as told to us recently by a collections executive, is that it means the entire collections organization is available to participate in streamlining through new technologies as well as new thinking about transforming and automating manual- and paper-intensive business processes and workflows.

3. More banks create digital/mobile/self-service initiatives

In addition to needing to find significant cost-efficiencies, banks are recognizing that changing consumer demands are providing an impetus for leveraging digital technologies better. As James Gordon of Needham bank put it, “We’re entering a society where before the phone was an add on, now the computer is becoming an add on”. Despite more and more hyperbole about how the world is going mobile, the larger trend toward creating a seamless series of interactions across all channels (labeled “omnichannel communications” by the analystgentsia) and incorporating dynamic offerings and treatments is what will occupy banks’ attention this year.

4. Banks seek to get closer to customers to gather information and personalize offers

Based on better data management (integration across systems and normalized for optimization) and analytics, banks will try to reach customers with more individualized offerings and treatments in an attempt to improve yield in marketing, collections and recovery efforts. We were surprised to hear a client executive predict that, in the not-too-distant future, the bank’s outbound calling efforts would be completely halted in favor of various synchronized digital communications aimed at driving customers to interact – by calling in, texting, emailing, going online or chatting or video chatting – and that they have to be prepared to manage that array of separate and parallel threads into a single productive dialogue with their customers. Individualized campaigns comprised of dynamic, interactive customer-facing enticements are already generating terrific results in automating credit line increase execution, and we expect that trend to expand into collections and recovery operations as well.

5. Banks who deployed short-term band-aids turn to more comprehensive, enduring solutions
 
The financial crisis was typified by creditors whose response to the crisis conditions and the uncertainty of the new regulators was to deploy short-term band-aid solutions involving large staff increases and system workarounds. Given the chance to take a breath, these banks are finding that there’s no time like now to replace piecemeal workarounds with more comprehensive, enduring systems and business transformations. Regulatory uncertainty and unknowns are largely becoming known and are no longer the deterrent to broader action that they were in years past. We expect to see a continuation, and in fact acceleration, of the trend toward banks gaining substantial efficiencies through automation of document management, workflow and business process management to replace time-consuming, paper and manual intensive business processes with simpler, web-based tasks.

What are you expecting in 2014? Click this link to add your thoughts on our blog.

CMC would love to help you be prepared for challenges in collections, recovery, regulatory compliance, agency and third party vendor management, marketing, and customer service. Automating customer-facing business processes with our comprehensive and unified solutions can be your key to getting out in front of the coming wave of new regulatory requirements, rising delinquency volumes, and “efficiency challenges” from top management.

To learn more, contact us at sales@cmcagile.com or call us at +1-302-830-9262.

Compliance "Provability" Achieves a Whole New Level

I was given pause recently when hearing a client tell me that they were ‘throwing bodies at the problem’ of putting the bank into position to be able to withstand upcoming audits. “What are all those people going to be doing?” I asked, naively. Turns out that even when the bank has expensive, high-tech systems in place to manage collections inventory, decisioning, letters, auto-dialing, email, text messaging, and IVR messaging…. they still need to manually reconstruct a view of each customer’s experience with the bank. These hoards of staff he mentioned were taking data from all the disparate systems and sources – they HAVE all the data, he assured me – and creating a normalized data set that then could be combed to find all instances of a particular customer’s experience and “paste them together” in a manner that was responsive to their audit examiner’s request. 

Proving a negative (“show me, by walking us through the experience of at least 100 customers, that your systems and people are consistently executing the policies and practices that you assured us are in place for your bank, 100% of the time”), it turns out, is much harder for the bank than it is for the examiner to find the one exception to the rule. The examiner therefore holds the high ground, until we can IN ONE PLACE, under the control of one system, easily step them through the entire experience of as many customers as they want to see, any time. And if we can also show them the strategy-writing and maintenance process we are following at the same time, in the same system… we win. CMC’s CredAgility offers just such a system, and with it the granularity needed to “provably” report on all activities at the individual account or customer level.

Prospects are always asking us to quantify the value of CMC’s comprehensive customer experience management automation platform. Viewed solely through the lens of staff avoidance, the savings can be very substantial during the peak staffing demands typically associated with an audit, and significant (if lower than at audit times) by making ongoing customer-facing business processes more efficient. There is also the effectiveness gain that occurs when a unified strategy is executed and customers’ experience improves, resulting in more resolutions: higher collections, higher issue resolution rates with less re-work needed, increased pull-through on complex processes like loan modifications. But the greatest value comes in the form of eliminating the dread fear of what an examiner might find and how much the ensuing enforcement action might cost the bank…