We’re delighted that we were able to help our client, a UK high street bank to identify a 75% efficiency saving opportunity with their secured collections operations.
The challenge
- This high street bank was struggling with legacy software in its secured collections operation.
- The operation was inefficient, and we identified 75% process waste.
- There was a 5-year IT backlog.
- The lack of digital customer channels, or a data driven workflow and decision engine, meant that customer experience was fragmented, slow, non-personalised and unsatisfactory.
What we did
We worked with the bank to create a service blueprint for secure collections, defining the required capabilities across people, process and system. We created example future customer journeys, a requirements document, a market sweep analysis and a case for change.
The results
We further validated our discoveries with process observations and value stream mapping, and used these calculations for the business case for a new digital collections workflow platform. We facilitated several vendor demos to get to a final shortlist for procurement.
Next steps
- We have recommended Lean Six Sigma training for operational teams to achieve quick wins in operations.
- Lean Six Sigma and other changes will be used to create a sustained continuous improvement culture.
- The bank will be working through the implementation and optimisation of the new collections platform based on our recommendations.
The challenge
The bank was significantly constrained by its current operating model in secured collections, mainly due to legacy software solutions. This meant that the bank faced a number of challenges.
- The bank was unable to introduce automation due to the constraints from legacy systems and a lack of integration amongst those systems.
- It was reliant on a large operational headcount which was struggling with current levels of demand. Due to the cost-of-living crisis, it was forecast that arrears cases would increase by 53% by Dec 2023 and by 94% by Dec 2024, meaning an additional 22 FTE would be required at the current level of efficiency.
- The bank had recognised that transforming the department with the existing technology as a platform for the future was impossible.
- With the FCA’s Consumer Duty Regulation deadline fast approaching, the bank wasn’t able to demonstrate that their collections processes and tools delivered on all the required outcomes (e.g. consumer understanding and consumer support).
The discovery
A specialist team from Sopra Steria was brought in to examine the current situation and explore potential solutions to the bank’s challenges. The team, which specialises in continuous improvement and customer experience in the financial services sector, discovered the following:
Platform inefficiencies
The team assessed the current collections platform and found that it was both slow and costly to make even small changes and updates. It also included a single point of failure – the 5-year IT change backlog. The core processes in the platform were highly manual which were impacting potential speed and recovery rates. This created a high risk to compliance, customer experience and customer outcomes.
During the discovery, the Sopra Steria team identified up to 75% efficiency saving opportunities. If these inefficiencies were addressed, the bank would not need to hire the additional 22 FTE to account for the forecasted increase in demand. In fact, they would actually save on existing FTE costs, potentially investing resource into delivering good customer outcomes.
Case handling
As part of the Discovery phase, the Sopra Steria team identified the lack of any dialler technology for outbound contacts. This meant 85% of agent time was spent attempting to contact the customer, yet they were only successfully connecting less than 10% of the time.
Another issue discovered was the lack of an effective workflow and decision engine, which resulted in increased lead times and the inconsistent handling of cases. These were manually pushed through by agents rather than being data-driven and automatic.
Agents were having to navigate multiple applications (up to 10 in a single case) to pull account information. This meant that there was no single-view-of-customer and a frustrating experience for both agent and customer.
The deliverables
On the successful completion of the Discovery, the Sopra Steria team set about creating a compelling set of deliverables for the client.
The bank was looking for transformational change and as such, a series of outputs were required and delivered by Sopra Steria as part of the contract:
- A discovery report and service blueprint for secured collections which defined required capabilities across Platform, People and Process.
- Multi-channel User-Journey Maps for secured collections based on existing real-life examples.
- An RFI requirements document, market sweep and solution shortlist recommendation for a new collection and recovery platform.
- A support document to help define the internal business case.
The results
The above deliverables were each presented to the client’s Head of Collections, the Chief Operating Officer and Director of UK Mortgages. Each of these key stakeholders wholeheartedly supported the findings and the case for change. So much so that they requested continuation of Sopra Steria’s work into a second phase.
This crucial second phase included the delivery of:
- ‘As-Is’ and ‘To-Be’ value stream mapping to support the detailed business case and operational quick wins.
- facilitation of the shortlisted vendor demonstrations.
- evaluation of those demonstrations.
- a detailed business case for a commercial off the shelf (COTS) SaaS digital collections and recoveries workflow platform.
Next steps
With the business case written, the Sopra Steria team went on to support the bank in gaining support and buy-in from various stakeholders from across the organisation. They also took the business case through the relevant client governance. The shortlisted platform vendors went on to the formal procurement processes.
Sopra Steria will continue to support the bank with the implementation of the platform. They will also provide Lean Six Sigma training to the operational teams involved. This important training will assist the client team in achieving the quick wins that have been identified. It will also help create a sustained culture of continuous improvement which is a key facet of delivering the level of transformational change the client requires.
The Sopra Steria team
Miles Smith is a Senior Customer Experience & Continuous Improvement Consultant at Sopra Steria, working within the Business Transformation and Change Consulting Team. Miles leads efforts focused on operational innovations and identifies collaborative business solutions. He has a qualification in Engineering and is a Certified Lean Six Sigma (Black Belt) supported by 20 years’ experience in retail and financial services. Nearly 10 of those were as a customer experience manager for a number of organisations.
David Tomlinson is a Senior Change and Transformation Consultant. Working alongside Miles, David has a background in Lean process redesign, change management, operating model transformation and cultural change. He has over 10 years’ experience in financial services transformation as well as experience in utilities, motor, energy and telecoms sectors.
Darren Townson is a Senior Business Change Consultant within the Digital Technology Consulting Team. He has a qualification in Design and is a Certified Lean Practitioner. He has 19 Years’ experience in financial services delivering projects on Target Operating Model, customer experience and service design in a number of different architypes.