Customer Solution Case Study
Venezuelan Bank Saves $3 Million Per Year with a More Efficient Claims Management Process
Overview
Country or Region: Venezuela
Industry: Financial services
Customer Profile
Banco de Venezuela/Grupo Santander, established in 1890, is the country’s oldest bank. It has traditionally focused on the corporate segment, but it is also an important player in retail banking.
Business Situation
The bank faces challenges implementing new government regulations that impose time-limitation for customer claims. These national regulations require the bank to better manage and monitor the claims management process.
Solution
The bank implemented a workflow solution based on Microsoft® Office Visio® 2007, which helped the bank to visualize and explore complex claims data faster and to better monitor and resolve customer claims.
Benefits
n Compliance with new claims response time regulations
n Faster customer claims resolution
n Savings of about U.S.$3 million in claims management per year
n Cost reduction of 75 percent to generate claim reports / “We can visually monitor claims process and realize value from our existing claims system. This helps identify and eliminate bottlenecks, improve customer satisfaction, and resolve more claims faster.”
Marie Blanco-Fombona, Vice President of Organization and Corporate Quality, Banco de Venezuela/GrupoVenezuela/Grupo Santander
A leading provider of financial services in Venezuela, Banco de Venezuela, a subsidiary of Spain’s Grupo Santander, provides a full range of banking services to more than 2 million customers. The bank wanted to improve the time to resolve customer claims and address new regulatory requirements designed to regulate customer service. The current claims system was not able to effectively track claims in process. To address compliance needs and improve efficiency of its internal claims management processes, the bank deployed Microsoft® Office Visio® 2007. With its improved processes and capabilities, it has been able to cut claims resolution time by up to 7 days, reduce time to process claims reports from 16 to 4 hours, meet regulatory requirements, and increase customer satisfaction. As a result of the new processes and technology, the bank expects to save nearly U.S.$3 million per year.
Situation
Banco de Venezuela/Grupo Santander, headquartered in Caracas, Venezuela, has more than 115 years of working experience in the retail banking industry. The institution provides a full range of banking services to individual and commercial customers. Banco de Venezuela/Grupo Santander has more than 4,000 employees. It provides its services to 2 million customers through 280 branches and 700 automatic teller machines (ATMs) across Venezuela. At more than 15,000 points of sale (POS), its customers can purchase goods in stores and shopping malls with their debit or credit cards.
Business Priorities
To maintain its reputation as the leader of the national financial system, Banco de Venezuela/Grupo Santander wanted to address the following business priorities that include:
n Designing a six-year consumer finance growth strategy.
n Implementing more responsive services and improved products.
n Increasing its retail-banking business segment with a focus on consumer finance.
n Expanding the size and depth of its consumer banking portfolio.
n Increasing the growth of government-regulated loans.
Achieving these business priorities while meeting new government regulations drove the bank’s efforts to improve its internal customer claims processes.
New Regulations to Improve Customer Claims Processes
The bank is facing challenges as a result of new government regulations. Failure to comply with those regulations could result in substantial fines. The regulations are designed to enforce the measurement and control of customer claims processes, as well as the claim response time. Specifically, the new regulations mandate that each claim must be received, processed, and resolved, and a response sent to the customer who originated the claim, within a maximum of 10 working days.
To achieve that objective, Banco de Venezuela/Grupo Santander needed to develop a solution to serve more than 2 million customers. These customers are not only geographically dispersed, but also often live in remote areas with limited communications and access to banking resources.
If the bank failed to meet these regulatory requirements, it could be subject to fines of millions of Venezuelan Bolívars. It was imperative that the claims be processed rapidly and accurately.
Challenges in the Customer Claims Process
A claim request occurs when a bank customer goes to a branch office in order to submit (in a paper form) a formal complaint about the bank’s services or products. The most common claims involve an issue with an ATM, a POS, or a bank statement. After the customer submits the form, the claim is entered into the customer complaint system. There it is assigned to the appropriate bank officer. The officer then resolves the claim according to a defined workflow and responds to the claimant. The performance of the claim process is measured by the time between the upload of the request in the system and the resolution of the claim.
The bank documents and controls the claim resolution process through process diagrams. Organizational changes, paper-based documentation, and incompatible workflows have resulted in a time-intensive claims resolution process and out-dated process documentation. To measure and control claims process performance, processing data was manually collected from different back-office systems and was visualized in process diagrams created by the staff. Incompatible tools and inconsistent process documentation made automatic exchange of data to and from process documentation tools problematic. The bank experienced difficulties in tracking progress of the claim resolution and controlling process performance metrics. (See Figure 1 for a detailed breakdown of the customer claims management process.)
Marie Blanco-Fombona, Vice President of Organization and Corporate Quality at Banco de Venezuela/Grupo Santander, says, “We were lacking tools for process diagramming and visualization of workflows, and this is what we really do on a day-to-day basis.”
The capability to design, manage, and monitor the claims processes became a financial and legal issue as well as a business issue.
Critical Success Factors for Management of the Customer Claims Process
Blanco-Fombona identified several critical success factors, and associated key performance indicators (KPIs), for better managing the customer claims process:
n Ensure that the response time meets government regulations (KPI: number of days to process a claim).
n Reduce the cost of managing claims (KPI: cost reduction in claims processing).
n Reduce the cost of reporting on claims management compliance (KPI: average monthly cost to generate reports on claims management compliance and claim- processing performance).
The bank decided to invest in a solution that would help its employees to better monitor the claims resolution status, would enable them to quickly resolve claims, and would ensure that the bank meets the regulatory requirements.
Solution
In order to address these areas of improvement, Banco de Venezuela/Grupo Santander selected a Microsoft® solution to increase the efficiency of the claims resolution process. In partnership with Grupo OpenCrom, Banco de Venezuela/Grupo Santander participated in the 2007 Microsoft Office system Rapid Deployment Technology Adoption Program. In the course of the program, it deployed Microsoft Office Visio® 2007 drawing and diagramming software. “The bank is very pleased with the results,” said Blanco-Fombona. “The staff has more time to do analysis and deliver value added to the job they perform, instead of spending time only on formatting and diagramming.” See Figure 2 for a detailed description of how each step of the customer claims process (as detailed in the Process Level 2 of Figure 1) is improved, resulting in a specific benefit.
Using Business Strategies and Tools to Improve the Customer Claims Management Process
In the course of the program Banco de Venezuela/Grupo Santander was able to increase the efficiency and control of its claims management process. The business strategies include automated workflows and data updates and real-time monitoring and analysis of the claims data and process.
Tools to Visualize and Analyze Complex Customer Claims Data
Data-connected workflow diagrams created in Office Visio 2007 provide a visual context for complex customer claims data. Bank staff can easily create new diagrams and modify existing ones with the new AutoConnect feature, which automatically connects, aligns, and distributes diagram items. The Data Graphics functionalities of Office Visio 2007 provide a real-time representation of the relationship between the process and the graphical indicators in the diagram. This visualization of process data allows officers to easily analyze complex claims processing data and quickly identify delays in the resolution process. The bank can readily monitor and explore the performance of its claims process and initiate required corrective actions.
Consistent Process Workflow Diagrams
As changes to the claims management processes in the back-office systems are automatically reflected in the linked workflow diagrams, consistent and up-to-date diagrams are available at all times. This ensures that bank employees use Office Visio 2007 as the single diagramming tool and avoid incompatibility issues between different tools.
By using Office Visio 2007 and its cross-functions, workflow diagramming, organizational charts, cause-and-effect diagrams, and exception-flagging alerts, Banco de Venezuela/Grupo Santander employees are able to visualize, map, and document complex processes through a single tool.
Workflow Diagrams Integrated with Actual Metrics from Different Back-Office Systems
With its support for the XML file format, Office Visio 2007 enables users to integrate data residing in different back-office systems with diagrams. The new Data Link feature automatically links diagrams to customer claims data. The bank’s officers can combine disparate sources of complex visual, textual, and numeric information into a single view and provide visual context for data. This allows the staff to create a complete picture of the status of the claims resolution process without searching for data in different back-office systems.
Automated Data Collection and Analysis
The 2007 Microsoft Office system business productivity suite integrates and automates actual process metrics from Office Excel® 2007 spreadsheet software with process workflow diagrams in Office Visio 2007 to enhance identification of process bottlenecks. With the new Refresh Data feature, bank officers can automatically update data in workflow diagrams. When data on customer claims changes in the back-office system, the data in the process diagrams is automatically refreshed. The diagrams will show real-time claims processing data and manual data reentry is not required to maintain the workflow.
Enhanced Ability to Communicate with Other Business Users
Office Visio 2007 enables users to export diagrams to a Portable Document Format (PDF) file format or save them as Web pages, Banco de Venezuela/Grupo Santander is now able to quickly share workflow-related information about the customer claims process. Staff in the Organization and Corporate Quality Department can send PDF files to users in the various business areas in order to visualize the claims management process. The ability to share workflow information in PDF files simplifies the communication between branch staff and internal business users
Overall the new solution based on Office Visio 2007 helps Banco de Venezuela with the management of its complex claims resolution processes. The wide range of diagram design and data visualization functionalities assist bank staff with documenting and monitoring of the claims processes and systems. Visual expression of claims processing data from different databases in a single process view allows bank employees to analyze process data and initiate issue resolution at an early stage.
Benefits
Through the implementation of Office Visio 2007 with the Office System 2007 Integration, Banco de Venezuela/Grupo Santander has achieved several important benefits. Through reducing time spent on diagramming and data consolidation, the bank staff can focus more on exploring the data and resolve the claims faster. The bank also gained better insights into the current state of the process, resulting in an increased efficiency and an accelerated response time. Denis Kepka, Program Manager at Banco de Venezuela/Grupo Santander, summarizes the benefits of the new solution to the department: “We can visually monitor claims process and realize value from our existing claims system. This helps identify and eliminate bottlenecks, improve customer satisfaction, and resolve more claims faster.” See Figure 3 for detailed information on the measurement of improvements and benefits from the customer claims process.
Faster Response to Customer Claims
Bank officers can now react faster to customer claims. Crucial claims processing data is consolidated from different systems and graphically visualized in the workflow diagram. Officers have a more complete picture of the claim resolution and are able to quickly identify process delays and resolve the issues faster. Through automatically updated information, the new solution provides a nearly real-time display of critical process data. Bank officers are now enabled to precisely monitor the current status of the customer claims resolution. This real-time monitoring ability enables bank staff to take more precise corrective actions faster and respond to the customer more quickly. These new insights into the claims management process helped Banco de Venezuela/Grupo Santander to increase its claim-processing capabilities and to accelerate the claims resolution. Blanco-Fombona says, “The consolidated view of claims processing data gives us the business insights we need to resolve more claims faster.” She expects that the organization will be able to further reduce response time and operational costs through the roll-out of the solution to other departments of the bank. The bank was able to achieve the following KPI improvements:
n Reduction of the average time required to process an ATM claim from 75 working hours to 35 working hours
n Reduction of the average time required to process a POS claim from 75 working hours to 22.5 working hours, with a corresponding increase in the processing of incoming claims from 40 percent to 90 percent
n Reduction of the average time required to process from 23 working hours to 4 working hours
Reduced Customer Claims Management Costs
With its new workflow solution, Banco de Venezuela/Grupo Santander was able to reduce administrative costs. It achieved this reduction by expending 50 percent less time diagramming its processes and cross-function workflows through faster creation and easier modification of claims processing data. Instead of spending time on diagramming workflows, the bank staff can now focus on exploring the claims data and resolving customer issues. The new diagramming features automatically align, connect, and arrange workflow items. Also the automation of updating workflow diagrams with the latest claims processing data reduces the amount of manual data reentry activities for the staff. At the same time, the bank improved the quality of process documentation. The automated data transfer allows the bank to avoid mistakes through manual data transfer. With less time spent on manually updating the diagrams, bank staff can now focus more on the claims resolution and increase the banks processing efficiency. Blanco-Fombona says: “We have reduced the total time spent on diagramming workflows by more than 50 percent.” As a result the bank has seen: