Introduction: Why Can’t Our Transactions Be More Like a TurboTax?
Ever wonder why your firm is still juggling paper forms or online PDF documents to process its transactions with customers?
TurboTax has set the bar for how digital transformation can provide customers with a delightful experience, even when they’re performing an activity as onerous as calculating their tax return. Instead of using an archaic and technical paper document or a PDF document, the user can easily navigate most personal tax situations and do so via a great digital experience.
If, however, that same user attempts to perform any number of financial transactions with a major bank, financial services firm, or insurance provider, they quickly realize not everyone has caught on. Even digitally- savvy companies like GEICO still require a combination of online forms, calls to agents, and paper to complete a homeowner’s insurance policy.
Why can’t it be better? In other words, what’s the big holdup?
Answer: The big holdup is the complexity of digital transaction management—what, at many of these firms, falls under the rubric of digital transformation: capturing data digitally from the point of origination. Then if/when a regulatory document needs to be created within the process, it can be, but it’s abstracted from the customer experience for as long as possible.
And depending on the organization, the complexity of digital transformation of customer transactions can involve as many as seven roadblocks:
- Roadblock #1: The Demographic Problem
- Roadblock #2: The Process Problem
- Roadblock #3: The Business Case Problem
- Roadblock #4: The Technology Problem
- Roadblock #5: The Content Modularization Problem
- Roadblock #6: The Compliance Problem
- Roadblock #7: The “Tunnel Vision” Problem
This white paper takes a close look at each of these roadblocks to digital transformation, and offers ideas for how to surmount them—so that your organization can provide its customers the fully digital transaction and the far more delightful guided experience model for which TurboTax has become the standard.
Roadblock #1: The Demographic Problem
One of the big obstacles to truly digital transaction processing is that many financial services organizations are beholden to their wealthier, and many times, older customers who, they believe, do not want a digital experience. But the question of demographics and digital experience is more complicated. Increasingly, the truth is all customers want to interact with their financial organization when they want and how they want.
But focusing specifically on the issue of age and net worth, do older, high- net-worth individuals prefer to interact with real people, as opposed to via digital channels? Recent research suggests that it depends on the transaction. But as the Pew Research Center found, this demographic has dramatically increased its adoption of the Internet and online banking.
Financial services firms may look at this kind of data and claim that these seniors are just checking their balances and not conducting business online. But the Federal Reserve reports that consumers between the ages of 55 and 64 average a net worth in excess of $800,000. That's a large portion of the financial services market. And the list of Forbes 400 includes a growing number of young people, ages 20 to 29—i.e. both high-net-worth and digitally-savvy.
Large wealth management organizations are usually the slowest to digitize their processes. Here are a few reasons that missing the boat on digital transformation is likely to mean the loss of customers in the future:
- Tech-savvy beneficiaries. When the beneficiaries of a trust (likely younger individuals) receive an influx of wealth, they’re unlikely to keep those funds with an institution that can’t serve their needs in a digital environment. Nobody wants to inherit several million dollars, only to discover they’ll have to fax in a signature page to initiate a money-movement transaction.
- Speed of transactions. Even clients who don’t initiate transactions electronically want their decisions to be executed quickly, with greater visibility into the process. The average wealth management organization fields thousands of calls from clients and their support staff (advisors, attorneys, accountants) regarding the processing of transactions. These call centers are big cost centers for financial services firms.
- Cost of transactions. The advisors who service these accounts and might be doing the faxing on behalf of their client are not only slowing down the transfer of funds, they’re also making the process more expensive for the institution. Manual, paper-intensive processes are slow and expensive.
- Customer Mobility. Customers of financial services are living longer, healthier lives. That means more travel, which isn’t always conducive to in-person meetings with a financial advisor. Older, high-net-worth customers may not move to a 100 percent, digital-first environment anytime soon. But that white-glove treatment we hear so much about will start to erode if financial services providers don’t begin digitizing the processing of their clients’ information.
The name of the game is to provide the ability to serve the client’s needs when and where they want. That will mean paper at times, and TurboTax-like experiences at other times. But providing those types of experience requires that a firm address its process problems.
Roadblock #2: The Process Problem
The process problem is a big roadblock for legacy organizations. These days, it’s further complicated by the fact that many firms lose top technical talent to new financial services startups because these upstarts offer them the opportunity to design a process from scratch, instead of having to deal with the disarray of issues faced by an organization that’s grown over decades through acquisition.
Let’s split the problem into two primary organizational components. First, the business. In a process like new account opening, the front office handling the customer-facing interactions for onboarding is totally separate from the middle office, which is responsible for approving the transactions, and again separate from the back-office operations group that processes the data downstream. At many organizations, multiple technical groups support the different line-of-business systems and the workflows for those processes.
The second organizational component is the group responsible for the creation, maintenance, and production of eforms. This ordinarily includes a group within the business that owns the forms. When a change needs to be made or a new form needs to be created, they send a request to a forms management team, responsible for implementing the design and update of the form as requested by the form’s owner.
Depending on the organization, the forms management group may be centralized, or there may a group within each line of business. Then there are representatives from Legal and Compliance who must sign off on the language of forms. In some cases, Marketing owns the customer experience and must be involved in editorial decisions about look, feel, and tone of the document and its language.
And where are the digital transformation teams in this quagmire? They’re focused on the customer-facing web properties and the social media platforms, and on the analytics tied to each of those. They haven't yet begun to recognize or address issues around collecting customer data in electronic forms, e-signature, and the data that passes downstream as part of the customer experience.
So what do you need to do to overcome the process problem?
- Begin by creating an inventory of the major business processes and the forms that support them today (most will be paper or fillable PDF). Identify who touches those forms in the front, middle, and back office.
- Identify who your form owners are in the business and who manages the forms for them. Are there central Legal and Compliance resources that support them, or does form review go into a queue?
- Create an inventory of forms across business processes and prioritize the list by volume. In many organizations, there will be five to ten iterations of a form, depending on the product it supports (Brokerage, Trust, Term Life, etc.) or the channel that distributes it (retail branch, third-party advisors, etc.). But that’s a limitation of paper / static PDF.
Once you move to digital, you can create variable templates to serve those uses (see “Roadblock #5, The Content Modularizatrion Problem,” below). In many cases, a Wire Transfer is a Wire Transfer, so you can probably combine the number of “Wire Transfer” forms being processed across all product lines.
Establish whether there are any additional support groups involved in data capture. Examples of this would be the team that supports e- signature or data capture on the customer-facing web site, line-of- business application owners that use forms as a part of their process or which create a form at the conclusion of their process, etc.
Once the major processes, forms, and support groups have been identified, you can begin rationalizing those efforts and reimagining them against a more centralized, flexible model that supports a true digital transformation. You will also have the beginning of an assessment of where the opportunities for straight-through data processing exist within your business processes.
Roadblock #3: The Business Case Problem
One reason digitally transforming the data capture process and moving from a classic, forms-based-environment to a more Turbo-Tax or guided experience model is so compelling is that it can deliver a real, hard-dollar return on investment (ROI). While many digitization business cases depend on soft savings (e.g., users spending less time looking for what they need) or cost avoidance (e.g., decreasing the amount of data that needs to be discovered during a litigation event or even decreasing the amount of hardware needed to support the growing amount of content in an organization), the case for digitally transforming data capture can:
- Decrease time to money
- Decrease “not-in-good-order” (NIGO) rates
- Decrease the number of back-office professionals needed to double- key data
- Decrease the number of calls to Customer Service about the status of a request-in-process
But as we’ve seen, many firms don’t have a full understanding of the end- to-end process for, say, opening a new brokerage account or executing a transfer-of-assets request. You might be able to track down the key metrics to help build an initial business case. In many instances, however, building a business case for digitizing these processes requires some industry benchmarking to develop an informed estimate of the potential savings.
Here are some questions to ask to help identify the primary sources of data that will drive savings for your organization:
- What are the top three to five forms that drive a majority of the requests in a particular line of business? It’s likely that your organization has hundreds, perhaps thousands, of discrete forms that are processed on a regular basis. Simply addressing the top three to five forms will drive sufficient savings to fund an initiative and demonstrate value for additional ongoing work.
- If you’re required to produce and store a form that memorializes a given transaction, how can you abstract the data from the form during the data capture process and deliver that data to the back-office in a straight-through process, so you aren’t paying folks to re-enter data that’s already been captured upstream in the process?
- What are the transactions that begin digitally, but which are then processed in an analog manner, such as fax, thereby forcing downstream data entry? (If fax is being used as part of the workflow, you are almost certainly incurring redundant data-entry costs.
- What is the cost for digitizing incoming forms and extracting and validating the data, either manually or through use of automated capture technologies?
- What are the top NIGO triggers, and how can those triggers be pushed upstream to when the original request is being submitted?
- What is the cost for developing a new form or for making an update to an existing form? It’s likely that a large number of the new forms that are being developed or changes that are being made are redundant across your forms library, and they’re only being repeated because you lack a process to work with modular elements across forms (see “Roadblock #5, The Content Modularization Problem,” below).
- Where can you use e-signature to accelerate a process, rather than waiting for a static document to be signed and then retrieving the data from that document?
- What percentage of calls to the call center involve the status of a form that’s been submitted? What is the cost of those calls?
The volume of transactions will drive the business case for this type of initiative. If your organization is processing less than 100 forms per month, even at a high cost of $20 per application, you may not be able to justify the necessary technology and process changes to transform the entire process end-to-end. You will likely need to focus on a specific departmental application with lower cost and time-to-market for the solution, then roll it out across additional groups. If, however, you’re processing thousands of applications and requests, you will likely be in a position to move toward more of a centralized model.
There are benefits to each approach. The primary risk if you take the departmental approach will be the scalability of the tool and the process as you roll it out to additional groups. Ideally, you can vet a technology that will be able to grow with your program—the subject of the next section of this white paper.
Roadblock #4: The Technology Problem
In the typical legacy environment, a complex array of tools is being used to capture and transfer customer data. In even the most disciplined environments, it’s difficult to align under standards and build a consistent infrastructure that doesn’t cost an arm and a leg to implement and support. To make matters even more complex, it’s currently untenable for a single tool to provide the entire platform for data capture and processing.
In most organizations, several categories of technology are currently being forced to work together—whether they want to or not. The figure below shows a high-level architecture for technologies that impact the customer experience, designed to help bucket the different capabilities that have a seat at the table in this customer experience conversation:
Caption: High-level Architecture for Customer Experience Technology Tools
On the far left, you have runtime inputs—the actual environments where an initial transaction request is generated and data is captured. In some situations, this might be a business system that a financial services representative uses to enter customer data, or a client-facing portal on the web or in a mobile application. In the best-case scenario, these systems capture all the necessary data for a request, then pass it downstream for approval and processing. Worst case, these systems are maintained completely separately from the actual forms environment and are acting as an independent forms silo.
The center of the figure shows a variety of capabilities that are needed for creating, maintaining, and storing forms elements, and for requesting changes to those elements. It’s likely that forms owners in the business have tools they use to track and maintain forms in Word documents and Excel spreadsheets. They’re likely using email as the so- called “poor man’s workflow” tool to obtain review and approval of changes to forms elements. Larger organizations are more likely to have developed a variety of workflow capabilities around the forms creation and maintenance processes. It’s also likely that your web content management and document composition systems are housing forms for online access, or for distribution as a part of a print onboarding kit.
On the far right of the figure is a list of various output channels for forms, including the multi-channel output that you would ordinarily think of as delivery channels. It also includes items such as long-term archival for the form template or for executed forms, e-sign for applicable forms, and e-transmittal tools in the organization.
Finally, at the base of the figure is the resource library. This is a bucket holding all things related to the care and feeding of the actual forms.
These can be forms templates, or pieces of those templates, if you’re doing modular design of the forms and form processes.
Large, complex organizations likely have developed a host of siloed, ad- hoc tools to support duplicative processes across multiple lines of business. For example, how specialized does a transfer of assets form need to be for each product line? Compounded with the previously discussed “Roadblock #2, The Process Problem,” the complexity of the technology environment resists consolidation and change. It’s difficult to change the process without touching the technology, and vice versa.
To impact the technology problem at your organization, you’ll first need to inventory the tools currently being used to support your forms. You can use a simple, high-level architecture (like the one above) to bucket those tools.
Then, even if you can’t standardize everything, try to standardize the system that provides the care and feeding for the forms. If the forms are all being created and updated in a central environment, it’s easier to hook the other systems to that point so that the forms being delivered to clients are up to date and consistent.
As you mature in the process redesign, you can then begin to standardize on workflow tools and delivery options. A central design environment also allows you move toward a digital-first design strategy capable of supporting the long tail of paper and PDF delivery. And, finally, it allows you to implement greater consistency in the look and feel of data capture environments, regardless of the channel they’re exposed through. And when you get down to it, that’s what your TurboTax-conditioned customers first see, and interact with, in their online experience with your company.
Roadblock #5: The Content Modularization Problem
When it comes to digitally transforming a forms-based data capture process, two things are critical, going forward:
- First, that content creators conceive of content as modular components, capable of being reused (and updated when necessary) as individual elements
- Second, that a good information architecture be in place to organize and classify those modular components of content and facilitate that re-use and updating
Together, these conditions can be the difference between success and failure. You can get every other part of the equation right, and if the content elements aren’t sufficiently modular, and the information architecture organizing those elements doesn’t work, then the entire thing will be nearly impossible to operationalize---never mind providing a delightful experience to your customers.
Traditional form design is not capable of supporting reuse of common components across form types and channel types. Under such design approaches, form templates that were not complete duplicates are handled as unique artifacts.
Achieving digital transformation requires deconstructing the content which comprises existing artifacts, analyzing it to identify and isolate the constituent content modules, then rebuilding the information architecture for the library in which these modular content components will be stored and organized, so that they can easily be reused across multiple forms.
Templates then pull the necessary content modules from the library to compose the appropriate form on the fly. If a change is necessary to a particular component, that change can be made in the individual component and then be populated across all of the templates which contain it. Going forward, future content is conceived and developed as modular components.
A component can be a logo, a data element, or even a block of text (e.g. regulatory language). For instance, take the example of a document that has regulatory requirements which differ by state. Under the old model, each state would have its own template. But more advanced thinking incorporates a template with data-driven variable content specific to each state. Now, it might not be realistic to have only one template with 50 different outputs. But organizations that have begun this journey have been able to find an operational middle ground between 50 templates (the current situation) and one template with 50 output versions (the hypothetical future state).
The template defines the layout of the content.
Rules define what variable to include (data rules) and how to alter layout, based on the amount of content in the generated document (layout rules).
Content refers to the text, graphics, and other objects that can be included in a document. Modern forms tools allow these objects to be highly granular, with the ability to reuse the same component across multiple templates, thereby simplifying maintenance and updates.
Data refers to the information (typically from line-of-business systems) that’s used to either populate the documents or to trigger rules.
The library manages all the templates, rules, and content components that are used and reused at runtime to present forms or deliver documents. The necessary content elements can be pulled from the library and then be used to generate a prepopulated PDF which the customer can either print and sign or e-sign. It can also be used to develop a guided experience similar to TurboTax, so that a user need never realize that as they provide the requested information, they’re filling out a form. But at the conclusion, the system can generate a form representing the transaction in question, which can then be memorialized internally in long-term archive.
As for information architecture, what is it, and how does it impact the digitization of forms-based data capture?
Consider the challenge you have now, in your traditional approach: managing thousands of forms and understanding their relationships to business processes and their dependencies on each other. Now, take that batch of thousands of forms, and break them down into the component parts (modules)—and just try keeping all of those straight, without losing your mind.
The information architecture is needed to help catalog, manage, control, and understand the modules that are created, and to enable users to find them.
Information architecture is, in the words of Richard Saul Wurman, “the creating of systemic, structural, and orderly principles to make something work—the thoughtful making of either artifact, or idea, or policy that informs because it is clear.”
For our purposes, that means thinking about the way forms-based data capture environments are designed, irrespective of channel, so that only the essential elements, and nothing else, are delivered to the end user— for instance, your customer, sitting out there at a Starbucks, filling out a form. When done correctly, content modularization and information architecture combine to drive the creation, maintenance, and delivery of forms-based data capture through paper, PDF, mobile app, etc., through a single design environment. In fact, in modern design tools such as Adobe AEM Forms or Intelledox, this way of thinking is baked into the toolset.
But that doesn’t mean you don’t have some serious work to do internally if you want to get it right. Modularizing content and building this type of information architecture requires a combination of business analysis and modular design thinking. The work is a combination of both art and science, wherein the appropriate balance is achieved through an iterative process. Balancing the creation of that exceptional user experience with the business and regulatory requirements within the process is truly where the art comes in.
Roadblock #6: The Compliance Problem
You’ll often hear business and operational leaders claim that it’s the folks in Compliance or Legal who are delaying their digital transformation objectives. To hear them describe it, they would be a best-in-class digital organization if it weren’t for that pesky compliance department.
More conservative compliance and legal departments can cause difficulty for the firm that’s attempting to embrace content modularization in its form design process. If you’re a national property and casualty insurer, for instance, you likely have state-by-state differences in the disclosures required on a specific form. If you modularize your content, you can produce unique forms for each of the 50 states, while maintaining only a handful of templates. But in many cases, Compliance will still want to see the final output for each state. Worst case, you’ll develop and maintain 50 forms, each with minor regulatory variations. But even if you move forward with the modular approach, your team will be stuck keeping track of the approval process for 50 forms—not as bad as maintaining each form as a separate template, but still onerous.
To use a different example, a forms management group might be interested in developing a guided experience for client onboarding, but Compliance requires the ability to audit any possible variation of the experience. This means finding a way to expose all possible variations of the guided experience and then submit it in a reviewable format.
And despite the fact that federal guidelines for e-signature were put into law nearly 20 years ago, many compliance groups are still suspicious about approving the use of e-signatures.
But digital transformation helps an organization be more nimble in response to regulatory changes—e.g. propagating the necessary changes to all forms, to all channels, thereby helping to ensure compliance with new regulations. This is a good argument to use to get internal compliance folks on your side. In fact, some organizations have begun their journey to digital transformation with just this line of thinking.
At the end of the day, though, Compliance doesn’t make decisions; it provides advice. The onus for transformation is on business and operational leaders who are responsible for understanding the risk, as described by their organization’s compliance function, then weighing that risk against the business advantage of providing a better customer experience and improving operational efficiency.
So we advise business leaders to go out and ask for a second opinion on the perceived risks, whether from their own compliance group or from an outside advisor. We find that the organizations which are succeeding with digital transformation are balancing the advice they get from Compliance with the benefits of transforming their processes—seeking advice from compliance professionals familiar with digital capabilities, instead of relying expressly on the advice of the stock representative they’ve been provided with, right out of the gate.
Roadblock #7: The “Tunnel Vision” Problem
If your organization has a digital transformation group, the chances are they’re focused on the low-hanging fruit—e.g., customer-facing web properties, digital apps, the “customer journey,” and other marketing concerns. To the extent that these items impact core business processes and operations, most groups have made only the front end of the process more delightful for the client, and have done little or nothing to change (or improve) the back-end process.
Take customer onboarding. A client might be able to apply for a new account online through an app-like wizard. But the data captured in this application process is likely handed off to a separate, middle-office program for approval and, even if the application is automatically routed to the back-office for processing, that back-office processing almost certainly still involves a vast amount of manual data entry and validation. And each time a human being needs to touch the data, the cost of customer onboarding goes up. Multiply that cost across every customer and every product for the average number of changes a customer might make to their account, and you’ve got a really expensive model for customer support that isn’t being addressed at all by digital transformation.
To make matters worse, because many of these digital transformation efforts are focused entirely on customer experience without the necessary focus on straight-through data processing or operational efficiency, it’s wasting a natural opportunity to provide real value to the enterprise in terms of time to money and efficiency. Not to mention it’s also skipping some of the most essential elements of customer experience. At the end of the day, clients want to do business with an organization that can service their requests quickly and efficiently, while also providing visibility into the process—so they needn’t contact Customer Service to find out the status of an application or transaction. Too many organizations digitize the front-end process, believing they’ve digitized the process—not realizing that the expensive back- end processing work is still being carried on.
And there’s a political element to this “tunnel vision” problem, too. Organizations with a designated Digital Transformation team often require other projects that seem to fall under that charter to be co- sponsored by the Digital team. Say Operations has determined it could reduce processing costs by reducing duplicate data entry. It wants to sponsor a digital transformation effort to improve straight-through data processing, but it has an additional hoop to jump through to align its roadmap with that of the Digital Transformation group. Many central services like Operations and Digital Transformation are understaffed and underfunded. So cross-service initiatives like this one often get deprioritized on both sides—with the result that Operations focuses on projects that are purely operational, and Digital focuses on projects that are purely digital.
The good news is that conducting a thorough investigation into all of the preceding roadblocks discussed in this white paper tends to surface opportunities across groups and, as in this example, to expose the necessity for the Operations and Digital Transformation groups to reach across the aisle and co-sponsor a project which has hard-dollar impact for both groups. Consider these scenarios for jumpstarting the digitizing of the eforms process:
- It can start with an evaluation of the existing technology portfolio and the technology landscape, leading to an acknowledgement that the existing tools can’t support the aspirational goals of the Digital team.
- It can begin with a process analysis that highlights the inefficiencies (and the resultant higher costs) of the existing business processes.
- It can even begin with the Regulatory group realizing it doesn’t have the resources to support the variety of data capture environments within the organization, and that a more modular approach is required to enable efficient updating and maintenance of regulatory language across the organization’s customer-facing documents.
All the more reason to consider which of the aforementioned roadblocks is holding your own organization back and preventing you from offering your own clients that TurboTax-like customer experience.
Digital Transformation: To Conclude
In our consulting engagements, we see financial services, insurance, and banking organizations addressing the issue of digital transformation in one of three ways:
- Stay the course. Let’s face it: Organizations in these industries are conservative by nature, and many are choosing to stay the course, continuing to serve their current client base in the ways they always have. In the near term, these firms will invest in other priorities, but eventually they’ll be forced by a new generation of clients and by the mounting operational inefficiencies to play catch-up in the digital transformation landscape.
- Digitize the existing process. Most firms that make claims to digital transformation have taken this path. They deliver forms to clients and to the front office via fillable PDF; they’ve automated some of the key process challenges using workflow tools, and some of their processes can be initiated in a web environment. But these firms haven’t invested in the re-engineering of their core approach to forms management or to data processing. As a result, they’ve been unable to realize the ROI available to them from optimizing their operations. Moreover, they’ll be unable to scale this model to meet client expectations in the longer term.
- Pursue a “digital-first” strategy. Forward-thinking organizations are realizing the long-term gains to be had from development of an internal service to pursue the digital transformation of their paper- based forms processes.
Plenty of executives are throwing around the digital transformation buzzword with little meaning behind it. But reimagining business processes with a digital-first vision is the route that offers the greatest potential for success—and for real, hard-dollar ROI.
It’s the organizations which have taken the third of the above-listed paths to digital transformation that have established a roadmap for success.
They’ve done the upfront work of inventorying their forms, processes, and supporting technologies; they’ve identified the gaps in their capabilities and built the requirements for impacting change on a department-by- department, or even a form-by-form, basis. And they’ve standardized their approach to developing and maintaining forms in a central library that can serve multiple channels for customer engagement.
Which of these roadblocks is keeping your organization from pursuing a digital-first environment? And could you use some help in assessing the changes that will be required, then navigating those changes? Or even in making the business case for pursuing a digital-first strategy at your firm?