4 minute read

4 Tips for Bank and Credit Union Process Improvement

Office working sitting at desk, smiling.

In our current age of technology, speed, and extreme expectations, the ability of banks and credit unions to quickly provide answers, complete transactions, and deliver service is no longer simply a convenience feature – it’s an absolute necessity. Simply put, it could be the difference between someone who hangs up the phone and someone who becomes an accountholder for life.

To help you navigate change, embrace transformation, and ultimately improve accountholder loyalty, here are four best practices in banking and credit union operations.

  1. Automate Business Processes

When it comes to bank and credit union process improvement, the value of automating your business processes cannot be overstated. One of the key challenges banks and credit unions seem to struggle with is manual processes: 82% are still using manual processes that are undeniably slow and highly vulnerable to human error – which leaves room for compliance violations, regulatory scrutiny, and reputational damage. In fact, in 2019, there were 1,473 data security breaches in the United States and the banking/credit union/financial sector faced the fourth highest number of breaches.

On top of risk and liability issues, banks and credit unions are also losing time and money to their manual processes. It’s estimated that companies lose 20-30% of their revenue to inefficiencies every year – and a lot of that is laid at the feet of difficult-to-use systems. Over 80% of business leaders say process issues come up because they have different internal systems that don’t talk to each other; and 83% of working professionals say their organizations have two or more redundant applications for the same function.

If you choose to automate, you can easily identify areas in your organization where you can become more efficient – like using automation to address increasing fraud rates and labor-intensive processes like manually posted payments. You can also use automation to standardize business processes by integrating with multiple core or truly third-party solutions (AKA systems that talk to each other) to save time and money while reducing operational risk. Think: contact centers and bill pay platforms.

Next steps? Start automating your business processes by looking into:

  • Prioritizing process analysis and optimization
  • Streamlining enterprise content management
  • Effectively identifying fraudulent check activity
  • Saving time and resources during data conversions
  • Eliminating manual tasks and redundant data
  • Offering integrated receivables to business accounts
  • Choosing truly open third-party solutions
  1. Streamline Branch Operations

Banks and credit unions know that even on a good day, efficient branch service is not optional – it’s a necessity. But throw in a pandemic and an economic crisis, and you have a recipe for potential disaster if you can’t meet your accountholders in their moments of need.

The keys to effective branch service include ease of handling frequent transactions and quickly and accurately resolving issues: 80% of American consumers say speed and convenience are among the most important accountholder experiences. But this isn’t new news. Long before the pandemic, the modern consumer was already looking for the technology, speed, and convenience we’ve all become accustomed to in our everyday lives. In the financial industry, it comes down to being there for your customers and members where they need you to be – whether that’s at the branch, on the phone, or through a digital channel. After all, branch support doesn’t stop at your branch doors.

Not surprisingly, some of the biggest time-killers when it comes to branch operations include manual processes. For instance, 38% of bankers surveyed said reducing paper-based processes is one of their top challenges. And recent research from Gartner says that finance departments can save their teams from 25,000 hours of avoidable rework caused by human errors by deploying business process automation technology (or robotic process automation).

When branches offer automated solutions for repetitive processes, there’s more time for enhancing accountholder service through speed, accuracy, and convenience.

Next steps? Streamline branch operations by looking into:

  • Improving staff mobility and accountholder convenience
  • Empowering contact center agents to provide high quality service
  • Optimizing your core and complementary solutions to enhance accountholder service, convenience, and loyalty
  1. Improve Back-Office Productivity

Back-office operations are the lifeblood of an organization’s ability to serve accountholders and create efficient workflows for employees. A back office working at maximum efficiency can drastically reduce the number of errors while improving adherence to compliance and regulatory demands. The back office is also important for digitizing and automating the flow of information throughout the organization for quicker response times – and as previously mentioned, that speed can be a huge competitive advantage.

Unfortunately, a fair number of banks’ and credit unions’ back offices are far from frictionless. When asked for the cause, 43% of workers said they often have to copy/paste or rekey information; and 80% of business leaders said problems arise because they have different internal systems that don’t talk to each other. When systems and departments are siloed, communication breaks down and interrupts the flow of information.

One trend the financial industry has seen in the effort to combat back-office friction is the migrating of operations to a private cloud. In explaining their decision to migrate, banks and credit unions have cited cost savings (as much as 50% on core costs), access to better technology, improved processes and productivity, and the ability to tackle IT security and regulatory uncertainty.

Next steps? Improve back-office productivity by looking into:

  • Collaboration between systems and departments
  • Saving on hardware and maintenance costs by migrating to a private cloud 
  • Reducing IT and infrastructure burdens with hosted computing services 
  1. Reimagine the Customer and Member Experience

To meet the expectations of the modern consumer, banks and credit unions need to offer the best possible customer experience and credit union member experience. That means secure digital banking. It means making sure your accountholders get the support they need when they need it. It means offering modern conveniences like end-to-end lending and digital account opening.

Unfortunately, while the financial industry has been moving in the right direction when it comes to reimagining the customer and member experience – and keeping up with the changes brought about by tech giants like Amazon – it’s been happening slowly. More than 50% of consumers want an omnichannel banking experience with the ability to seamlessly switch between physical and digital channels. But according to The Financial Brand, only 66% of banks and credit unions surveyed allowed a complete online loan process – with only 46% enabling end-to-end completion on a mobile phone. Another 72% of banks and credit unions allow consumers to open a checking account end-to-end online, but only 46% allow that process on a mobile device.

Although there’s room to improve, banks and credit unions have made strides in areas like online account opening, digital loan management, and personalized phone and computer-based assistance. Services like these let accountholders know they’re cared for and that their institution is comfortable with the latest technology. And when accountholders can send a P2P payment, open a new account, and apply for a loan all within a seamless digital environment – all following intuitive, clear steps, they have no need to look elsewhere for services.

Next steps? Reimagine the customer and member experience by looking into:

  • Effectively managing relationships and pricing new business 
  • Securely engaging with accountholders via digital banking
  • Providing quick, intuitive digital account opening 
  • Streamlining near-real-time payments for accountholders 
  • Modernizing deposit strategies and technology 
  • Enhancing the borrower journey with centralized loan processing 

To help with your “next steps” checklists for implementing best practices in banking and credit union operations, check out the newest Jack Henry Insight Series. It starts with just one question and specifically spotlights efficiency and offers actionable resources your organization can use to save time and money while improving the accountholder and staff experience.

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