Business Process Management processes have so many benefits for all industries but the amazing scope of potential gains within the financial services industry seem that one could almost imagine that they were the initial market for them. Banks and financial institutions encompass a great many systems that may not be compatible, and their profitability is their biggest priority, yet is difficult to measure and quantify.
What Can BPM Bring To Financial Services
The requirements of banks and financial services companies are focused on profitability analysis, risk adjustment measurement, and improvements to planning capabilities. They also need to demonstrate that they are meeting all the standards for risk management.
There is a need for evaluation of profitability of new products, payments and customers in relation to the element of risk and liquidity. BPM can clarify these factors, confirming profitability assumptions and creating performance plans which can highlight costs, profit margins, distribution demographics, market share and customer retention rates.
The tools and systems of a BPM can assist financial institutions to model a multitude of interest rates and exchange rates of currencies to allow the analysis of scenarios to discover how profits will be affected by rate changes. Some systems also have tools for predictive analytics which can facilitate minimising risk. For example, by comparing plan data to historical trends and economic indicators, a model can be established to show accurate estimates of bad loans.
Suitable BPM Products
There are a variety of BPM products which are suitable for big or smaller companies, although smaller companies do face more challenges of integration. Specific systems have been created to give multidimensional analysis by a variety of criteria, including geography, product and customer segment.
Vendors which have focus and expertise within the financial services industry have a tendency to deliver a product with greater ease of use and lower overall costs. These will have built-in functions that will have significant importance to the operations and strategies, such as calculators for average daily balances. There is always the issue of verifying the compatibility with existing systems to ensure proper integration.
There are also some quick start packages available which have a greater degree of manageability and reduce the burden of IT services. These have usually been converted using some of the guidelines and best practices established during implementation of BPMs in large financial institutions.
The most efficient and productive businesses have made use of BPM, so in order to compete it is essential to be better equipped to manage business performance. There are some excellent solutions available now with specifically designed applications for the financial services industry, which allow increased functionality and have best practices incorporated, with reduced costs. The implementation of BPM is no easier or simpler than any other industries, but the potential benefits and rewards are far greater. These new systems can be used to illuminate the complex factors of relationships, products, profitability, costs, liquidity and risk, to ensure maximum performance with increased efficiency and productivity and make for a more stable and secure business future.