Apromore’s representative and Senior Advisor, Nigel Adams, spoke at MoneyLIVE in London in March 2024. Here, Nigel shares his insights from the event on how to navigate uncertainty in a volatile global environment.
Given ongoing global uncertainty, it’s more important than ever to make the most intelligent decisions, based on the most intelligent insights. The challenge for decision makers is to bring order from the chaos. Partnering with companies such as Apromore to leverage tools such as process mining becomes pivotal, offering a structured approach to uncovering patterns and inefficiencies within organizational processes.
There are conflicting narratives around the economic landscape and geopolitical strife, as well as social disparities make life incredibly difficult for decision-makers.
The geo-political situation alone is hugely complex - and likely to remain fluid for some time to come. There are elections in the UK, US, and Russia this year. The war in Ukraine is now in its third year with no resolution in sight. Conflict in the Middle East continues to dominate the news, while many other potential flashpoints such as the Taiwan Strait continue to cause concern. The rules-based order that has survived since the end of the Second World War appears to be buckling under the strain.
Beyond geo-politics, the social challenges of inequality are accelerating, and the cost-of-living crisis is a phrase that resonates across the world. In the UK, for example, the shadow of BREXIT still looms large. Climate change brings its own challenges globally too, as we witness increasingly extreme climate events such as flooding, wildfires and damaging storms.
These themes are not new but have been building momentum and there is no reason to suggest that will see them reverse in the near future. So, what does this mean for the process mining industry?
Well, a trite answer would be: “Ask anyone who works in sanctions operations, to get a sense of the turmoil.” At a more strategic level, significant uncertainty is adding to the challenge for decision makers to place the right bets.
Understanding the banking agenda:
Amidst the chaos, the banking sector grapples with its own set of challenges, as outlined in conversations at MoneyLIVE.
At the top of the banking agenda are the usual suspects: containing costs; facing increased regulatory scrutiny; and responding to non-traditional competition, whether it’s the global tech giants chipping away at the juicier parts of the value chain or FinTechs finding opportunity in niche parts of the market.
From regulatory pressures to technological disruptions, the industry has a complex array of obstacles. However, there are opportunities in areas such as interest rate paradigms, payments and PoS innovation, the platform economy or supporting clients with their green transition.
In addition, ongoing digital transformation demands organizational talent and project budgets. Alongside this, banks are confronting a range of challenges that include: customer hardship; flexible work practices accelerated by COVID; and heightened community scrutiny of every move - from record profits amidst a cost-of-living crisis to navigating AML/CTF obligations and account closure politics.
In the fast-paced world of banking, decision-making amidst uncertainty often tends towards the political rather than rely on data-driven insights. This reality was evident during a discussion on scenario planning at MoneyLIVE.
While scenario planning is a familiar tool for the risk community, its reliance on high-level models poses challenges in capturing the true complexities of banking processes.
At a Royal Commission on banking misconduct five years ago in Australia, one CEO illustrated how seemingly simple tasks like mortgage origination involve over 400 steps. But it’s not the number of steps that make it complex, it’s the 35,000+ pathways through the steps. This complexity can make managing banking processes feel like wrestling with a seven-headed hydra, with surprises lurking in operations every day.
Process mining technologies, however, offer a solution. By providing insights into process bottlenecks, rework, and customer engagement, process mining allows bankers to grasp the reality of their operations.
This granular understanding empowers stakeholders to articulate root causes, estimate costs, and allocate resources with precision. Moreover, it uncovers hidden opportunities for revenue generation and retention. For instance, a payments command center may be focused on maintaining operational control, but the proactive, client-centric insight it generates can make retention a far easier task.
This transformative approach has propelled significant growth for forward-thinking organizations, as demonstrated by real-world success stories.
The path to decision-making confidence:
Amidst the daily hustle, seizing opportunities isn't just about confidence-building or freeing-up capacity freeing — it's about informed decision-making in the face of economic and geopolitical uncertainty.
It's evident that uncertainties pose more questions than answers, and shows the need for thorough analysis of multiple scenarios grounded in the realities of banking processes. Simulating scenarios, like a 25% drop in lending demand, not only uncovers cost burdens but also hints at potential upticks, such as in hardship or recovery sectors.
Understanding the dynamics of process interconnections is crucial, yet often overlooked in siloed scenario analyses. This calls for a deeper level of insight, achievable through tools like process mining. By delving into millions of events, process mining offers robust foundations for decision-making, ensuring it's grounded in facts rather than political maneuvering.
This profound understanding enables organizations to navigate uncertainties with clarity and confidence, setting a solid course for success in turbulent times.
Nigel's tips solutions for winning decisions during turbulent times:
- Implement regular scenario planning sessions grounded in process reality to anticipate potential challenges and opportunities, enabling proactive responses.
- Adopt process mining technology to gain granular insights into banking operations, including automation and customer engagement, enabling informed decision making based on facts rather than political maneuvering.
- Take control of your day-to-day operations by getting to the root cause of the variation that drives the complexity.
- Manage operational risk more effectively by monitoring compliance at a granular level, across the whole population of transactions on a near real-time basis.
- Leverage advanced analytics tools, such as predictive modeling and machine learning algorithms, to analyze vast amounts of data and uncover valuable insights.
- Prioritize customer experience initiatives to build trust and loyalty by investing in digital banking solutions and personalized services.
- Diversify revenue streams and supply chains to reduce reliance on specific markets or regions.
- Foster adaptive leadership to respond quickly and effectively to changing conditions.
Thank you for reading. Contact us to explore how Apromore can help optimise your processes journey and create operational excellence. Contact us here or check out our solutions here.
Nigel Adams