Anyone who's had the misfortune of going through a divorce, a tax audit, or even a mortgage application process knows the paperwork nightmare of collecting old financial records. What people don't realize is that it's no cakewalk for banks to provide customers with copies of past statements, either.
Toronto's RBC Royal Bank felt the pain and has taken steps that are paying off. Not only has the bank deployed a technology-driven process that shrinks the costs and amount of time involved in re-creating bank statements for any of its approximately 12 million customers, but its risk-management and anti-fraud and anti-terrorism units are likely to tap into the system to help them make decisions and gather data in near real time.
Bankbook-reconstruction projects are common these days, says Maggie Scarborough, senior analyst with banking industry research firm Financial Insights. But being able to repurpose the technology--"to have information integration spawn itself"--is the ideal, she says.
RBC Royal Bank for years has charged clients about $30 an hour to re-create statements, a process that took from one to three weeks. There had to be an easier, more efficient, and less costly way to pull together historical information and present it to customers, and Andy Hanna, RBC's manager of report management and distribution, found it.
Hanna, who spent 10 years in IT and 10 years on the bank's business side, chose to deploy an automated Web-based system for accessing archived data. It has delivered a 1,200% return on investment since it went live in June, he says.
In the past, reconstructing transaction statements went like this: When a client requested back statements for a specific period of time, an agent in RBC's operations service center dug into various legacy systems for transaction data and cut and pasted information into a document. Meanwhile, the everyday data that appeared on statements, such as the customer's address, was stored by third-party service providers on microfiche, so agents had to find and print out those records. All these documents then went to data-entry clerks, who would input the data into a Microsoft Word template. And, because some of the bank's customers are French speakers, the documents sometimes required translation.
Hanna's biggest challenge was to get that data, about 1 terabyte, into a centralized location that could be easily accessed by agents. Knowing that many of the divisions collected and stored their own data, Hanna poked around other areas of the bank. He discovered that the marketing department had a data warehouse to monitor and record all transactions in order to spot business opportunities. The data warehouse was storing all customer-contact and transaction data, everything that was later duplicated on the mainframe and microfiche systems. Things fell into place from there, and suddenly the microfiche system was no longer needed. "If we could use all those records of those transactions and create a new Web application to access it, it'd be easy" to re-create statements, Hanna says.
Hanna and his team called on one of their suppliers, Information Builders Inc., to provide a middleware layer between the marketing department's enterprise data warehouse and the operations agents. WebFocus, Information Builders' business-intelligence architecture, provided the integration tools to place a Web interface in front of users and connect them to the data sources in real time. Hanna worked with an RBC developer, Jayem Nolan, for six months to build the Bankbook Reconstruct application, with Hanna creating the business rules and Nolan developing code. Banks use thousands of transaction codes to identify customer activity--such as whether a payment was made with a check or via a funds transfer--so Hanna's team had to work with different bank units to find out which transaction codes would be needed to reconstruct the bankbook. Also, the marketing department had only two years of data in its enterprise warehouse. Hanna bumped that up to six years, which added a cost of $360,000 for additional storage.
All the data had to be cleansed and tested to assure its integrity before the system could go live. Hanna, who banks at RBC, tested a year's worth of his own transaction data to be on the safe side. Good thing. "There were missing transactions that we had to reinject into the data warehouse, and we had to make modifications in the data-collection process to do a better job of data cleansing," Hanna says. For customers who need this data for audits and other efforts, "it had to be down to the penny."
Now, when customers call the operations service center to request a bankbook reconstruction as far back as six years, agents input the dates requested via a Web-based interface, and within as little as 30 seconds they have a com- plete report in an Excel spreadsheet ready to send to the client, who's guaranteed that there are no errors because the process no longer includes manually transcribing data. Software automatically handles language translations--which is increasingly im- portant as the bank expands its reach into 66 countries.
The cost saving is estimated at $2 million per year, from increased efficiency as well as eliminating microfiche creation and storage costs. Now, RBC customers pay just $5 per reconstructed statement. "We've passed along our savings to the customer," Hanna says.
The next phase is to give access to the same data to branch tellers, so clients can simply walk into a bank and receive a spreadsheet on the spot. Hanna hopes to expand the type of information accessible by the interface beyond personal account data to include credit-card statements and more. Plus, he wants to push the service to the Web. He won't do that, however, until he's certain the data can be available 24-by-7 and that it will be secure.
Now other business units are looking at the system to see how they can use the same interface to access data. The risk-management department is using the application to make decisions for things like approving credit lines. "They can see from the data whether a customer is hanging out at a casino or is overdrawn for another reason, so they're saving because they're not having to write off loans," Hanna says. "This is huge for them."
The anti-fraud and anti-terrorist division has tapped into the system to comply with government requests that the bank monitor for suspicious activity under anti-money-laundering regulations. "We get as many as 30,000 information requests and search warrants a year from different law-enforcement agencies that we have to comply with," Hanna says. "Using this application saves time and speeds up the judicial process."
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