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Free Book Offer Welcome to “BPM in Financial Services Second Edition” If you missed the first edition of BPM in Financial Services (Retail $25.00. 263 pages in 9mb PDF), you are invited to download it now for FREE. Use discount code FINANCE on check out and download immediately at no charge. Download now (263 pages, 9MB) http://bpm-books.com/products/ebook-series-financial-services This book presents the collection of best and most important chapters on this specific topic recently published in our various publications. BPM’s promises are real, but the path to success is often littered with pitfalls and shortcuts to failure. Best practices can help you avoid them. If you are just embarking on using its methods and tools, these authors have a wealth of experience for you to learn from and build on. Whether you are a business manager or an Information Technology practi- tioner, this special collection of papers will provide valuable information about what BPM can do for you—and how to apply it. WfMC Annual Awards for Excellence in BPM and Workflow The case studies featured in this book are all recipients of the annual prestigious awards for Excellence in BPM and Workflow. If you’d like YOUR case study to be considered for publication, submit it to the annual BPM awards at http://BPMF.org. Award-winning entries are guaranteed publication. Business Process Management in Financial Services Methods, Concepts, Case Studies and Standards in Business Process Management and Workflow This book series contains important chapters previously published in the annual BPM and Workflow Handbook series, the Excellence in Practice series and our other publications and are assembled here with permission. Excellence in Practice Series Published in association with 23 Years of Thought-Process Leadership Future Strategies Inc., Book Division Lighthouse Point, Florida Business Process Management in Financial Services Copyright © 2016 by Future Strategies Inc. All brand names and product names mentioned in this book are trademarks or service marks of their respective companies. Any omission or misuse should not be regarded as intent to infringe on the property of others. The Publisher recognizes and respects all marks used by companies, manufacturers and developers as a means to distinguish their products. The “WfMC” logo and “Workflow Management Coalition” are service marks of the Workflow Management Coalition, www.wfmc.org. Neither the editor, Workflow Management Coalition, nor Future Strategies Inc., accept any responsibility or liability for loss or damage occasioned to any person or property through using the material, instructions, methods, or ideas contained herein, or acting or refraining from acting as a result of such use. The authors and the publisher expressly disclaim all implied warrantees, including merchantability or fitness for any particular purpose. There will be no duty on the authors or Publisher to correct any errors or defects in the software. Published by Future Strategies Inc., Book Division 3640-B3 North Federal Highway Lighthouse Point FL 33064 USA 954.782.3376 fax 954.719.3746 www.FutStrat.com; www.BPM-Books.com; [email protected] All rights reserved. Manufactured in the United States of America. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, or information storage and retrieval systems—without written permission of the publisher, except in the case of brief quotations embodied in critical articles and reviews. Keywords 1. Adaptive Case Management, 2. Intelligent Systems, 3. Knowledge Work, 4. Business Intelligence, 5. Business Process Technology, 6. Production Case Management, 7. Big Data, 8. Predictive Analytics, 9. Business Process Innovation, 10. Internet of Things 11. Business Process Management 12. Financial Services © IMPORTANT COPYRIGHT INFORMATION BPM in Financial Services Second Edition © Future Strategies Inc. This book is published in PDF digital format. The content of this book is fully copyrighted under international copyright law and may not be distributed or data extracted therefrom without written permission by the publisher, Future Strategies Inc., which will not be unreasonably withheld. BPM in Financial Services Second Edition http://bpm-books.com/products/bpm-in-finance-2nd-edition You are legally licensed to retain one digital copy on each of your own mobile devices/computers and to print one copy for your own use.  All book titles are available at quantity discounts for corporate and academic distribution, education and training use in both Print and Digital Formats.  Digital Editions can be licensed for mass distribution at very reasonable fees. To license multiple copies for distribution in a corporation, library, academic or other environment such as promotional gifts to customers, please contact the publisher. Future Strategies Inc., Lighthouse Point, FL, USA [email protected]. www.FutStrat.com. Tel: +1 954 782 3376. 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If this book is illegally shared, the publisher and DMCA-enforcing authorities can track the identity of the licensed owner. Foreword Klaus Schwab, founder and executive chairman of the World Economic Forum, famously said, “In the new world, it is not the big fish which eats the small fish, it’s the fast fish which eats the slow fish.” This is what digital transformation is all about; using technology to make change more agile, faster, while creating better customer outcomes. If you’re reading this book you’re likely somewhere along the path of driving change in your Financial Services business. This book delivers a vital collection of use cases providing practical insight to those focused on digital transformation. It couldn’t come at a better time. The Financial Services industry is in the middle of a major transition to become more customer value focused, more compliant, and better-adjusted to new normal cost structures. That’s the story behind the story of evolving modern digital technologies including FinTech, Cognitive, Machine Learning, Automation, Robotics, IoT, BlockChain, and other new and interesting opportunities. The challenges for successful digital transformation are plentiful. There is a funda- mental shift in expectations around ‘Speed,’ expressed as ever-more-rapid response to opportunities and competitive threats. It’s not about doing old things faster; it’s about finding new ways to do more by extending existing business architecture to include new technologies and new methods (such as ‘citizen development’). It’s all central to one key transformative theme: create and deliver faster. Easier said than done in our complex world where few firms have the latitude to start ‘greenfield’ business. Rather, most firms are dealing with decades of investment in entire arrays of complex, and often limited, legacy business architectures. These are the battleships of business architectures. By definition, they cannot eas- ily pivot. They are the source of the proliferation of data silos that all compound to increase complexity. Oceans of stand-alone apps, one-off answers to latest most critical fire-drill. Banking is a great example where much of business is still aligned by product silos rather than the customer. This is where strategies that adopt modern technology to create ‘digital overlays’ are so critically important. Being able to quickly adapt and create value-adding and compliant answers to business challenges without having to retool legacy is the way to go. It’s critical that the thrust of digital transformation seeks to not only move siloed objectives. It really is possible to have it all by focusing on a portfolio of critical change mandates that include driving new value for customers that is compliant and delivers opportunities to improve overall process effectiveness. Often the results are doing more with existing capacity by minimizing non-value added activi- ties by moving to processes that are more integrated, controlled, and less frag- mented. We are seeing lots of examples where effective monitoring and controlling of process is helping across a spectrum of topics including providing more holistic ways of managing compliance and risk globally under regulations like FATCA and the evolving nature of KYC (aka Know-your customer; Know-your-customer’s customer, Know-your-counterparty, etc.). This is the space where BPM, Case Management, Low-Code, and Digital Platforms can play an important role as enablers of innovation. These technologies provide i FOREWORD the glue to integrate FinTech and other modern technologies into the existing land- scape. The result is the ability to compete at “digital speed” – and it’s all being ena- bled by the next level of transformation in the Financial Services sector. My belief is that our Financial Services industry is in a profound period of transformation; although, to be fair ,at times it’s difficult to tell if transformation is real vs just new collections of buzz words. I think it is real and I’m basing that on real market signals such as the increased importance of consumer choice, expectations of value and emergence of new technologies that can aid a major transformative shift. My sense is that this current transition is profound in scope and impact – not just in terms of retail banking (aka payment platforms, etc.) but across the full spectrum of Financial Services including commercial, wealth, asset management, data providers, exchanges, etc. I expect the future will hold more modern, new, innovative ideas with higher value and better outcomes for most. For that reason, I could not be more optimistic about where Financial Services is headed. Not all will win in this new way of working; but those who adapt will garner the benefits and ultimately move the dial on making banking and capital markets a more effective, transformed, and accountable industry. I am humbled by the great honor of being asked to write this foreword and share my perspectives that are founded in two decades of experience as a Financial Ser- vices operations and transformation leader. Also in my capacity as Appian’s FS lead I have had the privilege of working closely with many of the leaders in our industry seeking new ways of working. This book is a great resource for those seeking better ways of working. It outlines the path forward by providing tangible use case examples that will help guide change agents in their thinking about how modern BPM technologies can support the shift to future business models and value-adding business outcomes. Speed may indeed be King, but scale, reuse and consistency all matter more than ever. Collaboration, mobility, mature cloud/on-premise architectures – these are increasingly table-stakes, not in and of themselves differentiators. The right com- binations of thought-leading, envelope-pushing technologies are here, ready to be assembled to meet 21st-Century challenges. I wish you great success in your digital transformation journey. Enjoy reading this book, because it will provide invaluable help. Michael (Mike) Heffner Appian’s Global Banking and Capital Markets Industry Lead [email protected] ii Table of Contents FOREWORD Michael Heffner, Appian INTRODUCTION AND OVERVIEW 9 Layna Fischer, Future Strategies Inc. Banking and Financial Services Overview THE ART OF BPM SUCCESS 17 Nathaniel Palmer, BPM, Inc. (BPMI), USA BENEFITS OF POLICY AND RULES DRIVEN PROCESSES IN LATAM RETAIL BANKING AUTOMATION 45 Kay Winkler, Negocios y Soluciones Informáticas, Ricardo Ungo, Panama Canal Authority, Panama LINKING ARCHITECTURES FOR BUSINESS RESULTS 60 Jude Chagas Pereira, IYCON ADAPTIVE CASE MANAGEMENT AND THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FACTA) 71 Kay Winkler, NSI Soluciones, Panama Learn from Award-Winning Case Studies AFRICAN REINSURANCE, AFRICA 88 Nominated by Newgen Software Technologies Ltd, India AGFIRST FARM CREDIT BANK, USA 98 Nominated by Bizagi, United Kingdom AXLE GROUP HOLDINGS LTD., UK 106 Nominated by EmergeAdapt, United Kingdom BANK DHOFAR 120 Loan Origination Nominated by Newgen Software Technologies Limited, India CNP ASFALISTIKI LTD., CYPRUS 132 Nominated by Newgen Software Technologies COLPENSIONES, COLOMBIA 142 Nominated by Bizagi CRAWFORD & COMPANY, UNITED STATES 147 Nominated by Appian Corporation, United States DELTA LLOYD, THE NETHERLANDS 154 Nominated by You-Get, the Netherlands 5 TABLE OF CONTENTS EATON VANCE INVESTMENT MANAGERS, USA 167 Nominated by EMC Corporation, USA FLEET ONE, USA 172 Nominated by 4Spires, USA FREEDOM MORTGAGE, USA 134 Nominated by Freedom Mortgage GENERALI CEE HOLDING B.V. 185 Nominated by Bizagi, United Kingdom HCL IBS, UNITED KINGDOM 196 Back Office Optimization Nominated by Corporate Modelling, UK HML, UK 208 Finalist: Financial Services, Nominated by IBM, UK INFOSYS MCCAMISH SYSTEMS, USA 216 Nominated by PegaSystems, USA NEW MILLENNIA GROUP PLC, UK 230 Nominated by AuraPortal USA PENSCO TRUST COMPANY, USA 240 Nominated by PENSCO Trust Company, USA PERSHING LLC, 249 a BNY Mellon Company, USA, Nominated by Pershing LLC, a BNY Mellon Company, USA PSCU, UNITED STATES 261 Service Request Management Nominated by OpenText, Canada TIAA-CREF, USA 268 Nominated by IBM, USA UBS BANK, WORLDWIDE 279 Nominated by Whitestein Technologies Section 3: Appendix WFMC STRUCTURE AND MEMBERSHIP INFORMATION 209 FURTHER READING: BPM AND RESEARCH 221 6 Introduction and Overview BPM in Financial Services Layna Fischer, Future Strategies Inc. This new eBook presents the collection of best and most important chapters on healthcare recently published in the annual BPM Handbook and Excellence in Practice series and other publications. BPM’s promises are real, but the path to success is littered with pitfalls and shortcuts to failure. This book is going to appeal to those getting into BPM in Financial Services and struggling to engage colleagues into the journey. It provides realistic and pragmatic guidance on how to approach BPM initiatives, along with a wide range of modern case studies developed by those who have undertaken real BPM programs. For those setting out on the BPM journey, you'll find the direct guidance on business case development and ROI calculation examples particularly useful. Perhaps more importantly, the case study authors also share their real-world best practices and pitfalls to avoid. Section One: Overview THE HEART OF BPM Nathaniel Palmer, BPM, Inc., USA The impact of new technologies, the mandate for greater transparency, and the ongoing aftershocks of globalization have collectively removed nearly any trace of predictability within the business environment. As a result, sustainable competitive advantage no longer comes from scale and efficiency but adaptability – the ability to process streams of information flows, make sense of these, and rapidly translate these into effective responses designed for precision rather repeatability. BENEFITS OF POLICY AND RULES DRIVEN PROCESSES IN LATAM RETAIL BANKING AUTOMATION Kay Winkler, Negocios y Soluciones Informá-ticas, Ricardo Ungo, Panama Canal Authority, Panama The following analysis and reflections represent the gathered experiences our team members at NSI (Negocios y Soluciones Informáticas, S.A.) have made during the last eight years, implementing more than 150 BPM solutions in several countries but mainly in Latin America (LatAm), in the financial industry. Being the results and conclusions of a broadly experienced, vertically specialized but only a single organization, this paper is complemented by our correspondent peers to serve as a practical guideline for applied and proven business process implementation meth- odologies and ROI metrics, allowing for continued improvements. LINKING ARCHITECTURES FOR BUSINESS RESULTS Jude Chagas Pereira, IYCON Organizations today have adopted business process management as a must-have initiative to further their success. This is driven by many factors, the need to ra- tionalize cost, the allure of promised results, and also the mounting peer pressure where “everyone is implementing BPM.” 9