LINQ is enabling the financial sector to highlight the cost of manual, inefficient and expensive processes – building the business case for change.
Is Loan Processing costing us more than we earn in Interest?
Banks are using LINQ to model their internal information flows which are often highly manual, inefficient and expensive. Processes such as loan or credit card applications often use multiple systems that lack integration, therefore people plug the gap, manually transposing information from one system to another. LINQ objectively measures the direct cost of these information flows as well as the latency cost which is delaying loan settlement.
LINQ shows business leaders that current processes are so expensive that small to mid-level loans cost more to process than the value of the interest earned against the loan over the repayment period. Moreover, LINQ can be used to quickly show how the information supply chains can be improved.
The result? A visual business case for change that aligns cost to value.
Measuring the Efficiency of Compliance
Compliance is no longer just a binary question. The competitiveness of any bank is dependent upon the efficiency of compliance. That can be challenging to understand when the purpose of a specific process or information asset isn’t clear; is that asset supporting core business or compliance… or both?
LINQ’s Information Flow Models ensure that every process and information asset is connected to the purpose that it is supporting. This means that efficiency of compliance can be measured, assessed and improved.
It goes further than that. An investment management firm was capturing their risk of regulatory non-compliance using legacy “boxes and arrows” editing tools. They were looking to reduce the time taken to capture information and increase its value by finding opportunities for re-use.
Using LINQ , they found the speed of capture was five times faster. They also discovered that the LINQ sketches were so universally understandable and relevant that they could be reused multiple times across the organisation.
LINQ reduced capture costs by 80% and increased the value of the captured information.
Should we be worried about Privacy regulations such as GDPR?
Financial institutions rely on holding personal data; therefore privacy regulations such as GDPR will impact the business. But how? What information should we worry about? Who is involved in processing data? What systems are processing personally identifiable information?
Information Flow Modelling connects every information asset with it’s purpose; and that must relate to the permission granted by the individual for the organisation to store and process information about them. LINQ therefore plays a crucial role in understanding an organisation’s compliance with current and future privacy regulations.
One interesting example is the risks of printing. LINQ has highlighted examples where source information is nicely corralled within a privacy trust boundary… and then documentation gets printed out, signed… and then scanned in outside the trust boundary. Because LINQ isn’t constrained by system boundaries, LINQ is able to show this issue in a way that business leaders understand; they can then lead on the required change.
Eliminating duplication after Mergers and Acquisitions
A multinational payment gateway company had grown through acquisition, and as a result had multiple systems which performed the same role across a new business group. This was inefficient and duplicated information and processes. The group wanted to consolidate their operations down to single systems that delivered business value efficiently.
In order to understand the costs and benefits associated with each system, and the associated processes and resources needed to operate them, LINQ was used to model the current state. LINQ enabled informed conversations between the groups so that a decision could be made regarding a way forward.
By focusing on information that supporting outcomes, the emotion can be removed from the conversation so that decisions are made based on what is best for the business. Change can be described in terms of information, action, system and people. Inputs and outputs supporting critical operational needs can be maintained as systems are migrated.
Helping Clients become more Efficient… and Profitable
What’s good for the bank is good for their clients. Many banks provide business improvement services for their premier clients; typically helping to improve financial reporting systems. A major challenge is to measure the impact of improvements.
LINQ allows the current state of a client’s financial information flows to be objectively measured. What business values are being delivered and how much is it costing to deliver the value? LINQ can then show future states that represent industry or sector ‘best practice’ as proposed future states that can be tailored to fit the client’s specific needs.
This provides a visual business case for continuous improvement. Because LINQ’s capture is so fast and efficient, the changing current state can be maintained, allowing the return on investment to be continuously depicted.