Banco de Venezuela

Venezuelan Bank Saves $3 Million Per Year with a More Efficient Claims Management Process

A leading provider of financial services in Venezuela, Banco de Venezuela, a subsidiary of Spain’s Grupo Santander, provides a full range of banking services to more than 2 million customers. The bank wanted to improve the time to resolve customer claims and address new regulatory requirements designed to regulate customer service. The current claims system was not able to effectively track claims in process. To address compliance needs and improve efficiency of its internal claims management processes, the bank deployed Microsoft® Office Visio® 2007. With its improved processes and capabilities, it has been able to cut claims resolution time by up to 7 days, reduce time to process claims reports from 16 to 4 hours, meet regulatory requirements, and increase customer satisfaction. As a result of the new processes and technology, the bank expects to save nearly U.S.$3 million per year.
   

Situation

Banco de Venezuela/Grupo Santander, headquartered in Caracas, Venezuela, has more than 115 years of working experience in the retail banking industry. The institution provides a full range of banking services to individual and commercial customers. Banco de Venezuela/Grupo Santander has more than 4,000 employees. It provides its services to 2 million customers through 280 branches and 700 automatic teller machines (ATMs) across Venezuela. At more than 15,000 points of sale (POS), its customers can purchase goods in stores and shopping malls with their debit or credit cards.

Business Priorities

To maintain its reputation as the leader of the national financial system, Banco de Venezuela/Grupo Santander wanted to address the following business priorities that include:

• Designing a six-year consumer finance growth strategy.
• Implementing more responsive services and improved products.
• Increasing its retail-banking business segment with a focus on consumer finance.
• Expanding the size and depth of its consumer banking portfolio.
• Increasing the growth of government-regulated loans.
  

Achieving these business priorities while meeting new government regulations drove the bank’s efforts to improve its internal customer claims processes.

New Regulations to Improve Customer Claims Processes

We can visually monitor claims process and realize value from our existing claims system. This helps identify and eliminate bottlenecks, improve customer satisfaction, and resolve more claims faster. Marie Blanco-Fombona Vice President of Organization and Corporate Quality, Banco de Venezuela/Grupo Santander

The bank is facing challenges as a result of new government regulations. Failure to comply with those regulations could result in substantial fines. The regulations are designed to enforce the measurement and control of customer claims processes, as well as the claim response time. Specifically, the new regulations mandate that each claim must be received, processed, and resolved, and a response sent to the customer who originated the claim, within a maximum of 10 working days.

To achieve that objective, Banco de Venezuela/Grupo Santander needed to develop a solution to serve more than 2 million customers. These customers are not only geographically dispersed, but also often live in remote areas with limited communications and access to banking resources.

If the bank failed to meet these regulatory requirements, it could be subject to fines of millions of Venezuelan Bolívar’s. It was imperative that the claims be processed rapidly and accurately.

Challenges in the Customer Claims Process

A claim request occurs when a bank customer goes to a branch office in order to submit (in a paper form) a formal complaint about the bank’s services or products. The most common claims involve an issue with an ATM, a POS or a bank statement. After the customer submits the form, the claim is entered into the customer complaint system. There it is assigned to the appropriate bank officer. The officer then resolves the claim according to a defined workflow and responds to the claimant. The performance of the claim process is measured by the time between the upload of the request in the system and the resolution of the claim.

The bank documents and controls the claim resolution process through process diagrams. Organizational changes, paper-based documentation, and incompatible workflows have resulted in a time-intensive claims resolution process and out-dated process documentation. To measure and control claims process performance, processing data was manually collected from different back-office systems and was visualized in process diagrams created by the staff. Incompatible tools and inconsistent process documentation made automatic exchange of data to and from process documentation tools problematic. The bank experienced difficulties in tracking progress of the claim resolution and controlling process performance metrics. (See Figure 1 for a detailed breakdown of the customer claims management process.)

Figure 1. The customer claims process and subprocesses

 

 

 

 

 

 

 

Marie Blanco-Fombona, Vice President of Organization and Corporate Quality at Banco de Venezuela/Grupo Santander, says, “We were lacking tools for process diagramming and visualization of workflows, and this is what we really do on a day-to-day basis.”

The capability to design, manage, and monitor the claims processes became a financial and legal issue as well as a business issue.

Critical Success Factors for Management of the Customer Claims Process

Blanco-Fombona identified several critical success factors, and associated key performance indicators (KPIs), for better managing the customer claims process:

• Ensure that the response time meets government regulations (KPI: number of days to process a claim).
• Reduce the cost of managing claims (KPI: cost reduction in claims processing).
• Reduce the cost of reporting on claims management compliance (KPI: average monthly cost to generate reports on claims management compliance and claim-processing performance).

The bank decided to invest in a solution that would help its employees to better monitor the claims resolution status, would enable them to quickly resolve claims, and would ensure that the bank meets the regulatory requirements.

Solution

In order to address these areas of improvement, Banco de Venezuela/Grupo Santander selected a Microsoft® solution to increase the efficiency of the claims resolution process. In partnership with Grupo OpenCrom, Banco de Venezuela/Grupo Santander participated in the 2007 Microsoft Office system Rapid Deployment Technology Adoption Program. In the course of the program, it deployed Microsoft Office Visio® 2007 drawing and diagramming software. “The bank is very pleased with the results,” said Blanco-Fombona. “The staff has more time to do analysis and deliver value added to the job they perform, instead of spending time only on formatting and diagramming.” See Figure 2 for a detailed description of how each step of the customer claims process (as detailed in the Process Level 2 of Figure 1) is improved, resulting in a specific benefit.

Step	Activity	Current Process	Business Process Improvement	Benefit
1	Create and submit claim	The system receives information from the call center. Claim information is captured by the bank's claim-processing and statistics system.	Connecting the workflows in Microsoft Office Visio directly with the statistics system	Taking action in real time with accurate statistical data
2	Assign and route claim	The system assigns a code to track the claim, and personnel start monitoring the claim.	Tracking the status of all claims in almost real time is possible due to visibility of all current "claim-processing" information	Automation of monitoring process
3	Resolve claim	Manual checking and reconciliation of the issue. A new status is assigned to the claim.	Automatic updating of the current status represented in the Office Visio 2007 diagrams	Reduction of manual work through process automation
4	Communicate resolution	The banking systems are adjusted based on the validation/reconciliation of the claim. The quality report is issued to the quality analyst, and the claim process is closed.	Analyzing the claim process in real time	Perform corrective actions in real time, not "postmortem"

 

 

 

 

 

 

 

 

 

 

 

 

Figure 2. Improvements and benefits for each step of the customer claims process

 

Using Business Strategies and Tools to Improve the Customer Claims Management Process

In the course of the program Banco de Venezuela/Grupo Santander was able to increase the efficiency and control of its claims management process. The business strategies include automated workflows and data updates and real-time monitoring and analysis of the claims data and process.

Tools to Visualize and Analyze Complex Customer Claims Data

Data-connected workflow diagrams created in Office Visio 2007 provide a visual context for complex customer claims data.  Bank staff can easily create new diagrams and modify existing ones with the new AutoConnect feature, which automatically connects, aligns, and distributes diagram items. The Data Graphics functionalities of Office Visio 2007 provide a real-time representation of the relationship between the process and the graphical indicators in the diagram. This visualization of process data allows officers to easily analyze complex claims processing data and quickly identify delays in the resolution process. The bank can readily monitor and explore the performance of its claims process and initiate required corrective actions.

Consistent Process Workflow Diagrams

As changes to the claims management processes in the back-office systems are automatically reflected in the linked workflow diagrams, consistent and up-to-date diagrams are available at all times. This ensures that bank employees use Office Visio 2007 as the single diagramming tool and avoid incompatibility issues between different tools.

By using Office Visio 2007 and its cross-functions, workflow diagramming, organizational charts, cause-and-effect diagrams, and exception-flagging alerts, Banco de Venezuela/Grupo Santander employees are able to visualize, map, and document complex processes through a single tool.

Workflow Diagrams Integrated with Actual Metrics from Different Back-Office Systems

With its support for the XML file format, Office Visio 2007 enables users to integrate data residing in different back-office systems with diagrams. The new Data Link feature automatically links diagrams to customer claims data. The bank’s officers can combine disparate sources of complex visual, textual, and numeric information into a single view and provide visual context for data. This allows the staff to create a complete picture of status of the claims resolution process without searching for data in different back-office systems.

Automated Data Collection and Analysis

The 2007 Microsoft Office system business productivity suite integrates and automates actual process metrics from Office Excel® 2007 spreadsheet software with process workflow diagrams in Office Visio 2007 to enhance identification of process bottlenecks. With the new Refresh Data feature, bank officers can automatically update data in workflow diagrams. When data on customer claims changes in the back-office system, the data in the process diagrams is automatically refreshed. The diagrams will show real-time claims processing data and manual data reentry is not required to maintain the workflow.

Enhanced Ability to Communicate with Other Business Users

Office Visio 2007 enables users to export diagrams to a Portable Document Format (PDF) file format or save them as Web pages, Banco de Venezuela/Grupo Santander is now able to quickly share workflow-related information about the customer claims process. Staff in the Organization and Corporate Quality Department can send PDF files to users in the various business areas in order to visualize the claims management process. The ability to share workflow information in PDF files simplifies the communication between branch staff and internal business users

Overall the new solution based on Office Visio 2007 helps Banco de Venezuela with the management of its complex claims resolution processes. The wide range of diagram design and data visualization functionalities assist bank staff with documenting and monitoring of the claims processes and systems. Visual expression of claims processing data from different databases in a single process view allows bank employees to analyze process data and initiate issue resolution at an early stage.

Benefits

Through the implementation of Office Visio 2007 with the Office System 2007 Integration, Banco de Venezuela/Grupo Santander has achieved several important benefits. Through reducing time spent on diagramming and data consolidation, the bank staff can focus more on exploring the data and resolve the claims faster. The bank also gained better insights into the current state of the process, resulting in an increased efficiency and an accelerated response time. Denis Kepka, Program Manager at Banco de Venezuela/Grupo Santander, summarizes the benefits of the new solution to the department: “We can visually monitor claims process and realize value from our existing claims system. This helps identify and eliminate bottlenecks, improve customer satisfaction, and resolve more claims faster.”  See Figure 3 for detailed information on the measurement of improvements and benefits from the customer claims process.

Key Performance Indicator	Type of KPI Impact	KPI Calculation/ Measurement Method	Baseline Value (before deployment)	Measurement Value (after deployment)	"KPI Improvement (in %)"	Benefit Calculation in Dollars
Costs and days to process claim	"Decreased costs Improved compliance"	Time savings per claim × hourly labor rate × number of claims per year	ATM: 75 working hours POS claim: Process 40% of claims in 75 working hours Account statements: 23 working hour	45 working hours Process 90% of claims in 22.5 working hours 15 working hours	40% reduction 125% increase in efficiency with 70% reduction in time 34% reduction	Approximately $800,000 per year Approximately $2 million per year Approximately $100,000 per year
Days to generate process KPI report	Improved compliance	Time to generate report predeployment versus time to generate report postdeployment	Total time per month: 16 hours	4 hours	75% time reduction	Not applicable
Cost to generate process KPI report	Decreased costs	Time savings per report × hourly labor rate × number of reports per year	Total cost per month: approximately VEB 90,000	Approximately VEB 25,000	75% cost reduction	Less than $100,000 per year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 3. Measurement of the improvements in the key performance indicators for the customer claims process

 

Faster Response to Customer Claims

We were lacking tools for process diagramming and visualization of workflows, and this is what we really do on a day-to-day basis. Marie Blanco-Fombona Vice President of Organization and Corporate Quality, Banco de Venezuela/Grupo Santander

Bank officers can now react faster to customer claims. Crucial claims processing data is consolidated from different systems and graphically visualized in the workflow diagram. Officers have a more complete picture of the claim resolution and are able to quickly identify process delays and resolve the issues faster. Through automatically updated information, the new solution provides a nearly real-time display of critical process data. Bank officers are now enabled to precisely monitor the current status of the customer claims resolution. This real-time monitoring ability enables bank staff to take more precise corrective actions faster and respond to the customer more quickly. These new insights into the claims management process helped Banco de Venezuela/Grupo Santander to increase its claim-processing capabilities and to accelerate the claims resolution. Blanco-Fombona says, “The consolidated view of claims processing data gives us the business insights we need to resolve more claims faster.” . She expects that the organization will be able to further reduce response time and operational costs through the roll-out of the solution to other departments of the bank. The bank was able to achieve the following KPI improvements:

• Reduction of the average time required to process an ATM claim from 75 working hours to 35 working hours
• Reduction of the average time required to process a POS claim from 75 working hours to 22.5 working hours, with a corresponding increase in the processing of incoming claims from 40 percent to 90 percent
• Reduction of the average time required to process from 23 working hours to 4 working hours
  

Reduced Customer Claims Management Costs

With its new workflow solution, Banco de Venezuela/Grupo Santander was able to reduce administrative costs. It achieved this reduction by expending 50 percent less time diagramming its processes and cross-function workflows through faster creation and easier modification of claims processing data. Instead of spending time on diagramming workflows, the bank staff can now focus on exploring the claims data and resolving customer issues. The new diagramming features automatically align, connect, and arrange workflow items. Also the automation of updating workflow diagrams with the latest claims processing data reduces the amount of manual data reentry activities for the staff. At the same time, the bank improved the quality of process documentation. The automated data transfer allows the bank to avoid mistakes through manual data transfer. With less time spent on manually updating the diagrams, bank staff can now focus more on the claims resolution and increase the banks processing efficiency. Blanco-Fombona says: “We have reduced the total time spent on diagramming workflows by more than 50 percent.” As a result the bank has seen:

• Reduction in the cost of managing ATM claims by approximately U.S.$800,000 per year.
• Savings of approximately $2 million per year for POS claims process management.
• A 75 percent reduction in the annual cost of generating claims reports.

Compliance with Government Regulations for Claims Response Time

Through the visualization of the claims process and by linking the diagrams to the bank’s claims management performance metrics, Banco de Venezuela/Grupo Santander is now able to visualize the status of its claim-processing activities in real time. The graphical shapes provide a faster, clearer indication about workflow bottlenecks and delays in the process, enabling the staff to ensure that all claims are resolved according to government regulations. The tie between the diagram and the data forces the documentation to stay in synch with the actual process performance.

Increased Customer Satisfaction

The improved process-monitoring capabilities help the bank identify the causes for customer claims more quickly. Drawing on these new insights, the bank is able to more efficiently react to customer claims and resolve the issues. This improved response to claims is expected to increase customer satisfaction.

Tighter Control of Critical Processes

Through added user-friendly diagramming features and increased ability to communicate with these diagrams, the staff uses the Office Visio 2007 solution more consistently and accurately as the single diagramming and monitoring tool. This increased internal adaptation of the tool enabled the bank to solve its incompatibility issues and allows for more consistent and updated workflows throughout the bank. This increases the ability of the department to monitor and manage the bank’s operational processes. At the same time the bank has better control over its processes and it can ensure consistency and adherence to its standards and guidelines.

Overall, the consolidated real-time visualization of the claims process data enabled the bank to reduce claims processing time while it increased its internal processing efficiency. In addition to gaining the ability to respond more quickly, the bank has reduced costs for managing customer claims related to ATM, POS, and bank statement complaints. Overall, this resulted in the bank meeting its objective to enhance compliance with government regulations. The bank also achieved increased customer satisfaction and a tighter control of its processes. Based on the positive results Banco de Venezuela/Grupo Santander is expanding the solution to monitor and control all processes in the Organization and Quality Control department.

Partner Profile

Grupo OpenCrom is a leading provider of consultancy services, technology solutions, and business process outsourcing in Latin America. It provides services under a value delivery model that generates competitive advantage for its clients. The group is a Microsoft Gold Certified Partner for Collaborative Solutions and for Enterprise Systems.

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About Business Value Assessment
This business value research study was developed by Capgemini using the Microsoft Rapid Economic Justification (REJ) Framework to assess the business value of the 2007 Microsoft Office system.

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For more information about Banco de Venezuela/Grupo Santander products and services, visit the Web site at:
www.bancodevenezuela.com