Case Study

Innovations Solve Capacity &
Service Problems



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Global Bank Case Study

Innovative Service Solves Resource Capacity & Customer Service Problems

This case study is about the private bank of a +60B global bank. The activities described here occurred in the US, Canada, Latin America, and Caribbean countries.






The New Results Needed


The bank's customers were complaining that they had to call and ask for confirmations of their routine transactions such as funds transfers and securities trades. They often complained about delayed transactions that actually were on time but the confirmation was late and the customerís perception was that the transaction was delayed.


The bank's employees in both the branches and the processing centers were stressed and frustrated because they felt that didn't have enough time to follow-up transactions, obtain confirmations, and then provide the confirmation information to the customers.


Branch employees also complained bitterly about how complex and time consuming it was to fix a failed or delayed transaction.  The annual transaction status follow-up, research, resolution, and customer confirmation activity costs were $32M (salary and benefit only). The annual organizational capacity cost was $63M.


Because of the status information difficulties, a rift was growing between the branches and the back office processing centers. Management was becoming very concerned about this rift because it was undermining the highly collaborative and respectful relationships the bank had enjoyed for so long.


Product Managers were complaining to senior executives that because branch personnel were failing to provide customers with timely transaction status services, new revenue growth rates were declining.. In focus groups customers revealed that they werenít giving the bank more share of wallet assets if they were dissatisfied with the transaction services. This was particularly true of investments, a highly profitable service whose stalled growth was noticeable on the income statement.



The Approach


 New Results & Solutions

This problem was solved within six months and new leap-scale customer service improvements were achieved within eighteen months. The service innovations added value to the transaction service and contributed to both share of wallet and new customer growth. The bank's initiative implemented Orient Point's new results formula.


New Knowledge X New Decisions = New Results


 The bank had engaged Orient Point over the previous five years and the management team was aware of Orient Point's approach and deliverables. The COO engaged Orient Point to construct AIModels that included the process, product, and customer segment models with special AIModels for "follow-up and rework" activity. The COO organized a steering committee of senior managers from the regions, Corporate Finance and HR, and also from the five largest processing centers.



Their New Information


Their AIModels showed them that branch personnel spent 18.2% of their time on transaction follow-up or re-work corrective activities. This 18% capacity was 740,000 branch labor hours at a direct salary and benefit cost of $36M and a total operating cost exceeding $70M.


An additional cost in the processing centers for "status research, working with branch staff on status issues, transaction follow-up, and corrective re-work" activity was $19M (s&B). The bank's own internal estimates of the problem had overestimated the branch costs and underestimated the processing centers' costs.


The multinational team was split into three groups and each were assigned a single work stream while serving as reviewers and advisors to the other two groups.


Group 1 developed an array of possible technology solutions and they were assisted by a corporate IT team with diverse expertise. Group 2 developed process change scenarios that forecast labor cost benefits. Group 3 developed product service changes for the 16 product groups that had 88% of the high cost transaction status problems.


Each group used the AIModels to conduct extensive scenario construction and analyses. These scenarios were prepared with Microsoft Excel and the AIM database. Each team spent about twelve hours over two weeks: six hours developing ideas, two to four hours analyzing the costs and benefits and four to two to fours hours vetting and summarizing the recommendations.


The AIModels provided all of the process, product, and customer interaction information they needed to thoroughly understand the problems and analyze a wide variety of solutions with little effort. Orient Point consultants guided and at times assisted the teams for some complex scenarios and analyses.



Their New Decisions


 The three groups met physically for the first time in New York to share their findings and preferred case recommendations. The COO, CEO, and CFO had promised that the teams' plan would be approved on the 2nd day of the meeting if the recommendations met these criteria:

  1. The cost-benefit analyses was comprehensive and presented break-even ROI within eighteen months using only the quantitative data AIModels.

  2. The implementation activities were not complex and could be conducted by the bank's employees, not consultants or non-bank staff.

  3. Most of the results and solutions could be achieved within eighteen months.

Decision 1


IT would create a "bolt on" email module for the eight major transaction processing systems that accounted for 94% of all transactions. The email module would email the customer, the banker and the initiating employee about the completed status of a transaction such as a funds transfer. The estimated cost was $270,000 and the estimated time to complete was six months.


Decision 2

Branch operations would add procedures that asked customers what kind of confirmation they wanted and verified the email or phone number. While the email addresses and phone numbers were in a customer file, a final verification was needed because many customers had multiple residences and offices and traveled frequently. The automated email confirmations reduced 92% of branch's confirmation costs.


Decision 3

Branch operations and the processing centers created new Expert Resolution Centers in each region to handle the language requirements in English, Spanish, and French. These centers researched late and failed transactions. These departments were staffed with the most seasoned experts who could resolve a problem in a fraction of the time it took branch staff to figure it out.


They also had $10,000 reimbursement authority to immediately reimburse a customer's account for a loss due to a transaction delay or failure. Branch personnel did not have reimbursement authority and their reimbursement requests could take five days which further frustrated customers.


These Expert Centers reduced 96% of branch costs for delayed and failed transactions. The new cost of the Expert Centers was slightly under $3M for logistics support and space. No new personnel were added because the operation only shifted the complex research work from many employees to a few for a zero sum workload increase.



Their New Results

Customer complaints stopped and shifted to compliments. When surveyed, customers gave "exceed expectation" ratings for transaction timeliness and communications.


Branch workload was reduced by fifteen percent. The bank grew into this excess resource capacity within eighteen months. Productivity, as measured by transactions per month, number of accounts, and account assets, all increased by more than ten percent.


An added benefit realized later was that instantaneous confirmation was of significant value for some customers and some products. The bank experienced an annual aggregate fifteen percent growth over forecast for a number of years later in these products because clients increased the share of transactions, or new customers were attracted by the confirmation services.


Instantaneous transaction confirmation set a new banking industry benchmark that received favorable publicity for about two years after its implementation. Interestingly, some of the bankís top competitors found that copying this innovation was difficult and expensive.





The bank implemented the same initiatives and technology in the other regions during the next two years and achieved similar operating capacity savings and customer service improvements.


This bank continues to engage Orient Point and most recently engaged them to reconstruct the entire operations models for a 5,000 branch North American division. Orient Point had originally constructed these models in 2006. These models are their primary reference metrics that are used for for resource, finance, and product management.


The private bank increased its customer retention over the following five years from a mediocre 80% to the best in the industry at above 95%. It increased its customer share of wallet from 60% to an industry leading 88%. Its annual asset growth has kept it in the top five of global private banks.


New Knowledge X New Decisions = New Results





These exhibit reports were prepared from the bank's AIM-Activity Information Models database with over 500,000 work records from more than 1,000 employees. It has a statistical confidence above 98% and a statistical variance less than .25%. It was built in 8 weeks..


Exhibit 1


This report displays the resource hours and cost of Follow Up activity for each process.

Note that 755,353 hours are spent handling client inquiries!
These were clients that call or email asking about the status of their transactions.


Exhibit 2


This report displays the hours spent on ach product and the hours consumed by follow up activities.



Exhibit 3


This report displays the resource hours and resource cost of the follow up activities.




"I've engaged Orient Point Consulting since 2001 at Chubb and now at XL. I've always been able to solve my problems and achieve my goals by using their activity information models as my core information for analysis and planning."
Jeff Brown
Senior Vice President, Chief Processing Officer, XL Group

          I'd like to learn more

"AIM is a unique and valuable tool for us. It delivers new information needed to make better decisions and achieve our goals."
Larry Agoglia, Managing Director & COO, Citigroup Private Bank


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