Banking Best Practices

Proven Leading Practices to Improve Banking Operations & Strategy

Banking Best Practices

Proven Leading Practices for Bank Operations

Banking Best Practices Guide

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Mortgage Lending Best Practices Guide

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Investment Management Best Practices Guide

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Use a Standardized Complaint Form to Log Borrower Issues and Improve Customer Satisfaction

Best Practice (Good)

Use a standardized complaint form to log borrower issues. Categorize the most common complaints into 5-7 general issues (e.g., time to reach loan decision, interest rates, access to capital, service quality, etc.). Document the issue, time frames and the next step that should be taken in order to resolve the issue. Keep records of all formal complaints that are submitted in order to analyze and identify weaknesses in the consumer loan origination process and the most common instances of borrower dissatisfaction. Once complaint analysis is performed and root causes are identified, develop training methods for consumer lending employees to address the problem areas and increase borrower satisfaction.

Typical Practice (Bad)

Provide personalized customer service to all borrowers who submit complaints. Encourage dissatisfied customers to call customer service so that customer service representatives can provide friendly service and suit the unique needs of each individual borrower. Rely on customer service training to be sufficient enough to adequately resolve all borrower complaints.


Benefits:

Standardized complaint forms enable the company to perform root cause analysis and identify key weaknesses and opportunities for improvement within the consumer loan process. This helps the company to prevent future complaints from occurring, instead of providing ad hoc resolutions to borrower issues. In addition, standardized forms encourage specific and efficient calls to action from employees, which minimize the amount of time each employee must spend on customer complaints. Targeting the root cause of borrower complaints will lead to smoother business operations and increased borrower satisfaction.

Perform Periodic Investment Management Account Reviews to Ensure Progress Towards Specific Goals

Best Practice (Good)

Review the value/results the bank's Investment Management Group has delivered to customers over the course of each quarter, half year and year to accurately measure progress towards joint goals between the bank and its customers. Ensure that all Investment Managers keep in regular touch with the key people (i.e., C-suite executives, departmental managers, etc.) in the accounts managed. This not only allows the bank to"feel the pain" of their customers (i.e., identify the needs to the customer), but it also helps both the bank and the customer to produce business strategies that will align with better overall results.

Typical Practice (Bad)

Review the results the Investment Management Group has delivered to customers after each year and contact customers immediately after the required analysis has been made. This allows the bank's Investment Management Group to communicate with customers what progress has been made while also identifying any strategic changes the customers may want to enact and/or if there's anything else the bank can help the customer with. Take this opportunity to cross-sell the bank's other products and services.


Benefits:

Periodic reviews of the value/results the bank has delivered to customers allows the bank's Investment Management Group to both measure their internal and customer-facing performance (i.e., their productivity and how well they've performed according to the business needs of the customer). Periodically touching base with customers/account holders, furthermore, allows the Investment Management Group to ensure that the bank is fulfilling the needs of the customers while providing the customer the ability to receive in-depth knowledge of the bank's performance. This keeps customer satisfaction high and allows customers the chance to work with Investment Managers to align their business goals (i.e., develop business strategies that will bring greater benefits) for added improvements and accuracy.

Use of a Single Standardized "Interaction Guide" Across the Retail Branch to Improve Customer Experience

Best Practice (Good)

Develop and enforce the use of a single standardized "interaction guide" across the Retail Branch that outlines common conversations with customers and how to best handle questions and address cross-selling opportunities. Ensure that the standardized script is centrally located within an online knowledge database (typically through the organization's online portal, Intranet-based resources, etc.) to allow all customer-facing employees (tellers, platform employees, etc.) to refer to it when necessary. This ensures that all of the bank's employees provide customers with the same messages, thus reducing customer confusion, frustration and overall dissatisfaction.

Typical Practice (Bad)

Allow tellers and other customer-facing bank employees to create their own "interaction guides" to answer all of the most frequently asked customer questions. Ensure that all customer-facing employees keep their script close at hand to allow them quick access when the time arises and to prevent the rework associated with rewriting scripts. It is the responsibility of customer-facing employees to keep their messages to customers consistent to prevent customer confusion and attrition.


Benefits:

Bereft of a common "interaction guide," customer-facing employees (tellers, platform employees, etc.) are left to either create their own or interact with customers in the way they see fit, which increases the likelihood that customers will become confused with the inconsistent messages/answers given across the bank (this includes answers posted on the bank's online portal, email notifications, in-person interactions, etc.). As such, providing customer-facing employees with a centrally located (typically through the organization's online portal, Intranet-based resources, etc.), standardized "interaction guide" not only allows all employees the ability to view the same guide, but it also ensures each employee's messages are on point and consistent with each other and with the bank's goals. This reduces customer confusion and increases overall customer satisfaction and understanding.

Define and Measure KRIs to Help Mitigate the Bank's Exposure to Risk

Best Practice (Good)

Define and measure key risk indicators (KRIs) that can illustrate the internal controls in place to mitigate the bank's risk exposure (e.g., Percentage of Customers that Require Suspicious Activity Report, Percentage of Customers Classified as High Risk, etc.). Track these KRIs regularly, and create a time series chart to indicate whether the number of risky accounts managed by the bank is increasing or decreasing.

Typical Practice (Bad)

Collect data related to Suspicious Activity Reports and "high risk" accounts (based on AML regulations), but do not measure specific KRIs that can be visualized and presented to management for insightful conclusions.


Benefits:

Measuring the KRIs that demonstrate the bank's ability to minimize risky accounts reduces the likelihood that the bank will be vulnerable to legal sanctions or reputational harm. If the bank detects that there is a growing percentage of Suspicious Activity Reports or "high risk" accounts over time, then they can work on creating procedures that will increase the effectiveness of Customer Due Diligence to prevent further onboarding of risky accounts.