At its most basic, we can think about productivity as a measure of efficiency. Within a financial context, productivity describes the outputs created from inputs—in other words, units of material become units of product. When it comes to financial crime risk management (PDF)Opens in a new window (file size: 0.75 MB), the more effective the processes are, the greater the relevance and value of the activities identified and crimes prevented.
To put it simply, productivity is all about what an organization is getting. It’s about applying resources where it matters and ensuring an effective program.
In this piece, we take a look at productivity in banks and financial services and, more specifically, from the lens of the financial intelligence unit and investigations. We explore how financial institutions can most effectively support fast growth while ensuring compliance and maintaining their obligations under law.
Often, when we at PwC Canada do a statistical analysis of an organization’s transactions and clients, that organization’s view of their business is very different from what our analysis ultimately reveals.
We start with, for example, a bank’s 2 million clients. But once we’ve finished our review, we’ve uncovered the fact that of all of those, 200 are ultra-high risk: they’re high value, but because of the high value of their transactions, the organization is actually losing money on them.
When we look at an organization’s activities from this financial point of view, it becomes clear that to be most productive, organizations should manage to where their risks are. Basically, organizations should put up their artillery where they’re most vulnerable.
While it may seem straightforward, most organizations, at best, have accomplished compliance. This means while their program is risk-based and possibly effective, it’s not efficient or productive.
So how can an organization build this approach and, perhaps more importantly, sustain it? Here at PwC Canada, we break it down to three steps: process, people and technology.
Improving an organization’s process is all about driving an empirical analysis to determine the total cost of a customer.
While many organizations understand the idea of total cost of a customer, to realize and make decisions based on that total cost, an organization needs to truly understand what it takes to manage a customer. This helps organizations determine whether they should be servicing any given customer. Getting a customer onboarded and determining how much service they’ll consume has little or nothing to do with how much it will ultimately cost to deliver.
Having methodologies to support teams is critical, but the next step is to improve how people work together.
Whether it’s through digitization or automated frameworks for coaching supported by electronic applications, decisions can be visualized and acted on immediately. This empowers people to collaborate, work together and make changes in real time, resulting in dramatically increased employee satisfaction.
The third piece is technology: while machine learning and artificial intelligence (AI) are both important, they’re tools—what’s essential is to understand which tool to use in which circumstance and how to apply it. And this needs to happen in conjunction with the process and people improvements we’ve described above.
While many organizations understand how to design a framework such as this one, not a lot are able to execute it—but making this all come to life and sustaining it drives productivity.
If we’ve learned anything over the last year, it’s that the assumption many of us had that important activities needed to happen in a physical facility was false. In fact, what we’ve learned so far from COVID-19 is quite shocking: productivity has gone up and people are, overall, more focused.
Here at PwC Canada, we’ve seen our clients start to realize it might be more efficient to focus on their core business rather than doing back-office work, which they can often cosource or outsource for a lower cost than doing it internally.
What we’re all realizing now is that there’s a better way to do things, and we’re truly excited to explore this with our clients.
