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Home > GEM > Processing Cost Reduction
PROCESSING COST REDUCTION - Credit Card Issuer, EU Market
Assignment
Provide a solution for reducing direct billable processing expense to the Client.
Exploring how managing key processes more effectively can reduce accessing of core operating and affiliated software, thereby reducing fees.
Background
The client business had grown dramatically since its inception and in common with similar start up ventures has developed certain inefficiencies and ‘work around’ processes that need to be eradicated.
To that end the client is reviewing the structure for the operating areas within the processing of the credit card product, with a view of capitalizing upon significant financial savings.
The client undertook its Business Review under three core areas:
- High level relationship review – existing contracts are in renegotiation alongside a review of potential upgrades and enhancements.
- Benchmarking the market competitors to determine appropriate price points.
- Operating Review – employing external consultants (fasEo) to review the efficiencies and effectiveness of its people and processing system deployment.
fasEo undertook the review against a clear set of definitions that the client agreed would become measures of success for the project.
The Approach
Our underlying principle is that we partner with our clients to ensure that objectives are met on time and within budget. Given that many processes span a business endeavour, by necessity we also reviewed the holistic activity – albeit at a very high level.
Within a very aggressive project timeframe fasEo had to learn quickly how the client’s employees use their systems and processes. While we did not get a truly deep dive – the upside is that whilst limited, our review process had to quickly identify impact areas.
We staged our approach as follows:
Off site activity
- Client appointed Project Sponsor and Team Leader.
- fasEo facilitated discovery conversation.
- fasEo dedicated 5 man days to pre-visit background reading and finalise planning process. Client Project Manager available throughout.
- fasEo issued a project plan to Project Sponsor 5 days before on site arrival.
On site planning
Our plan was to pull a small team of key process owners from across the critical areas where operating systems are accessed. We defined and then looked at the entire Customer Life Cycle chain key processes:
Acquisition, on boarding, activation, authorization, line management, risk management, customer service, inbound and outbound selling, call vector management, collection (queuing, dialler strategy, collection practices), charge off and post balance sheet action, residency and system fees .
Impact
fasEo learned about and understood the client operating environment, culture and deployment of people and systems. We agreed by consensus (with identified process owners) on the key areas where we believe costs may be recovered through reduction of waste and revenues enhanced through improved production. We discovered what is done, not what is thought to be done, could or would be done. We reaffirmed and agreed measures of success with the client
We worked with a number of teams to create improved process maps, moving from current to desired state, across key process areas. Together, we prioritised areas where processes are ineffective or long winded. Identified the impacts and benefits and determined how to implement change. Facilitated management working parties to deep dive and document the most impact-full processes in need of priority review. Using best industry practices, questioned findings and agreed upon process reductions or eliminations. We tested impacts against known client process handshakes, to prevent any negative domino-effect.
Results
We produced a detailed report outlining our findings and recommendations, as supported by evidence.
Running a cost benefit analysis, we identified tangible annualised savings of 15% that were readily attainable. The client immediately began the process to implement our proposals.
Further “hidden values” in People, Process and Systems were also recognised. Additionally, and maybe outside of the obvious brief, our client benefited by our many additional proposals for Improvements.
fasEo offers a vast array of product and service solutions, especially tailored to the credit card industry. Our expertise is in people management and systems that optimise results for all the business stakeholders
To obtain a specific quote or view more sample materials contact orders@faseo.com.
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