In today’s rapidly evolving financial landscape, traditional banking providers face intense competition from fintech start-ups and tech companies offering innovative financial solutions and outstanding user experiences. With 71% of millennials indicating they’re likely to use digital-only banks for deposits in the future, customer expectations have shifted dramatically. They now demand round-the-clock accessibility, seamless mobile banking, and swift, simple transactions. Coupled with stringent and ever-changing regulatory requirements around data protection and cybersecurity, banks are under immense pressure to transform digitally if they’re to remain competitive.
One critical area that’s often overlooked in this transformation journey is the reduction of failure demand.
Failure demand is the demand generated when a service fails to meet customer expectations, leading to rework, additional queries, or even complaints. Unlike the internal demands we might set for ourselves, failure demand reflects the gap between what customers expect and what is delivered. In traditional manufacturing, this might be akin to rework or returns; in the service industry, it manifests as customer dissatisfaction, repeated contacts, and ultimately, wasted resources.
In the finance sector, failure demand can be particularly costly. Consider the numerous touchpoints in banking—from processing transactions to addressing customer queries—where any failure to deliver on the promised service creates a ripple effect of additional work. This not only strains operational teams but also impacts customer satisfaction and trust.
The Key Causes of Failure Demand in Finance
Let’s delve into some common sources of failure demand in the finance industry and explore how they can be mitigated:
- Failures in Quality Control
• Challenge: Quality issues are best identified and resolved before a service reaches the customer. However, traditional quality control (QC) systems often fail to catch errors early, resulting in costly rework or customer complaints.
• Solution with OPX:
o Open and Closed QC: OPX enables both pre-delivery and post-delivery quality control checks. Quality checkers are prompted with specific questions tailored to the service, product, or customer, allowing for real-time identification of issues and implementation of corrective measures.
o Bottled Knowledge via Scriptflow: For complex services, OPX allows subject matter experts to encapsulate their expertise in a business scenario wizard (Scriptflow). This guides less experienced staff through tricky processes, ensuring consistent quality and reducing the chance of failure.
2. Mismatched Service Level Expectations
- Challenge: There can be a significant disconnect between the service levels that banks believe they are delivering and the expectations held by customers. For instance, what might be considered a five-day turnaround internally could be viewed as sluggish by customers.
- Solution with OPX:
- Real-Time Capacity Planning: OPX monitors workload fluctuations in real time, enabling banks to adjust resource allocation dynamically and set realistic service expectations.
- Automated Delivery Time Predictions: The system can predict and communicate expected delivery times to customers, reducing unnecessary follow-up enquiries and mitigating the risk of failure demand.
3. Inadequate Escalation of Tardy Service Requests
- Challenge: Without automated systems to track every case, some service requests may fall behind, leading to delays and additional customer contacts to check on progress.
- Solution with OPX:
- Automated Escalation: OPX tracks service requests and automatically escalates those that are lagging. This ensures timely intervention and prevents bottlenecks, maintaining service levels even during peak periods.
4. Poor Communication with Customers
- Challenge: Failing to keep customers informed about the progress of their service requests can lead to frustration and additional, repetitive contacts.
- Solution with OPX:
- Automated Status Updates: OPX’s Document Production module can generate and send real-time status updates via email, SMS, or letters. Keeping customers in the loop reduces anxiety and minimises follow-up calls.
5. Incomplete or Poor-Quality Data
- Challenge: Missing or inaccurate data in backend systems can cause significant delays and lead to rework.
- Solution with OPX:
- Data Quality Checks: OPX employs a robust rules engine to run quality checks on critical data. When gaps are identified, the system generates reports and work items to prompt data correction—either through automated communications or scheduled outbound calls.
6. Skill Gaps and Inadequate Training
- Challenge: The efficiency of service delivery is often hampered by insufficient training or underutilised skills among staff.
- Solution with OPX:
- Granular Skill Tracking: OPX records skills at a detailed level—by service, process, and customer variation. This data allows team leaders to allocate work effectively and identify training needs, ensuring that employees remain proficient and confident in handling tasks.
- Guided Processes: For less frequent or complex tasks, Scriptflow and integrated checklists ensure that even less experienced staff can adhere to best practices, reducing errors and rework.
7. Lack of Real-Time Operational Insight
- Challenge: Without access to up-to-date performance metrics, it’s challenging to identify and address under-capacity or over-capacity issues, leading to inefficiencies.
- Solution with OPX:
- Operational Insight Dashboards: OPX provides real-time visualisations of key performance metrics, historical trends, and future capacity planning. This comprehensive insight allows organisations to reallocate resources swiftly and maintain optimal service levels across the board.
The Impact of Reducing Failure Demand
The benefits of addressing failure demand extend beyond improved operational efficiency—they directly enhance the customer experience and drive business growth. Our customers who have implemented OPX have witnessed remarkable improvements:
- Complaints Reduced by 70%
- Increase in First-Time-Right Performance by 12%
- SLA Breaches Reduced by 62%
- Transactions per FTE Increased by 35%+
- Operational Costs Reduced by Over 30%
Moreover, these improvements not only boost productivity but also reduce stress within operational teams, allowing them to focus on strategic, high-value work.
Conclusion
The finance industry is at a critical juncture. With customer expectations evolving rapidly due to digital disruption and fintech innovations, traditional banks must embrace digital transformation to remain competitive. Failure demand, the hidden cost of not meeting customer expectations, is a major contributor to operational inefficiencies and mounting expenses.
OPX offers a comprehensive solution that addresses the root causes of failure demand—from ensuring rigorous quality control and real-time capacity planning to improving communication and data quality. By automating repetitive tasks, enhancing compliance, and providing actionable insights, OPX empowers financial institutions to streamline their operations, significantly reduce failure demand, and unlock new levels of efficiency and growth.
For banks ready to meet the challenges of tomorrow, the future is clear: adopt digital transformation with OPX and lead your organisation confidently into a brighter, more efficient future.
If you’d like to learn more about how OPX can transform your operations and help reduce failure demand, get in touch with us today. Together, we can pave the way for a more agile and innovative finance industry.