A typical banking organisation has over 300 unique business processes, with up to 1,600 unique activities. In fact, decisions represent up to 70 percent of the tasks in core banking processes such as loan processing and account origination and administration, according to software company Progress Software.
Business decisions are valuable assets and help contribute to a company's success - they execute corporate policies, provide agility to stay ahead of market changes, and ultimately drive companies' bottom-line results.
Today, a significant percentage of these operational decisions are made manually - by people trained to follow rules documented in policies and guidelines. This traditional approach offers the opportunity to exercise judgment; but when applied across a high volume of recurring decisions, it is costly, time consuming, and often delivers inconsistent results.
Progress emphasised that the approach an organisation uses to manage the operational decisions can have a significant impact on performance metrics such as the speed of customer acquisition, time-to-market for new products and services, time-to-quote, and loan processing times.
Corticon automates business decisions
Progress Software acquired Corticon in 2000, which was founded by Dr. Mark Allen, who is currently the Chief Technology Officer, Decision Management, of the software company.
Progress Corticon adopts the Business Rules Management Systems (BRMS) that delivers automated business decisions. Otherwise known as "rule engines", it helps to externalise decision logic from applications and represent as business rules.
These said rules, according to Allen, are different from decisions. "Decisions are governed by policies and regulations. For instance, a 'decision' question would be: "Should we pay this claim?" whereas a "rule" would be to reject claims with invalid billing codes," he explained.
It separates decisions from processes, helping both business and IT users to quickly create or reuse business rules as well as create, improve, collaborate on, and maintain decision logic, he added.
Companies leveraging Corticon are seeing significant gains in both business operations and IT agility by reducing costs by removing unnecessary manual steps in processes with recurring decisions, improving response times for processes that require calculations, validations and data transformations; increasing consistency of decisions across a high volume of transactions; and reducing IT overhead by maintaining decision logic outside of process and application code.
"Customers using Progress Corticon have seen measurable business results, such as a 75 percent reduction in cost to acquire new customers, 90 percent reduction in manual underwriting tasks; and 50 percent reduction in processing time per loan," Allen said.
Boosting banking efficiency
Singapore-based DBS Bank, one of the largest banks in Asia, is one of Progress' prominent customers in the banking sector, shared Allen.
DBS has adopted Progress Corticon to provide a reliable, accurate, and flexible credit scoring process to support both its consumer and commercial loan activities. Corticon has replaced manual methods, yet offers agility, allowing rules to be adapted as market conditions and data change, and at the same time provide a reliable platform for decision-making.
Sign up for CIO Asia eNewsletters.