ProductFlow

______________________________________ Retail Banking Productivity Solutions ______________________________________

Today, competition in the retail-banking sector is more intense than ever. This is driven by continued consolidation and increasing accessibility by customers to the services of many institutions. To address this trend, banks today are competing for customers by providing better customer service. As competition grows and operating margins shrink, retail banks are closely examining their profitability equations. More and more time is spent on business planning and strategies for minimizing cost and maximizing revenue. There is less and less time to implement the changes and measure their effectiveness. Management is constantly looking for ways to lower their operating costs without impacting (and in fact improving) customer service. They are prospecting a broad range of products through branches and other delivery channels. By adding de novo branches strategic branch network infrastructures are developed to reach out to their customers. ProductFlow Consulting LLC is a New Haven, Connecticut based financial engineering consulting company providing the critically needed assistance to retail banking business leaders. ProductFlow provides proven operational models for identifying areas for maximizing branch profitability and productivity applicable to retail banks of all sizes and efficiently measures the effectiveness of the changes in the production (branch) environment. The combination of state-of-the-art Financial Engineering with the latest Information Technology has yielded six productivity models designed to help business planners and decision-makers meet the goals of the business. All ProductFlow models are built to promptly deliver accurate productivity and profitability solutions. ProductFlow was not satisfied with the status quo presented by other productivity companies in the United States. Therefore, ProductFlow has developed industry-leading technology to steer the next stage of operating effectiveness. The principles established in these financial engineering models go beyond current solution sets to establish a new set of industry guidelines.
ProductFlow Models

Activity Based Branch Sizing

QueFlow

Activity Based Product Costing

Cost of Error

Account Origination

Internal Branch Benchmarking Model

Retail banking productivity optimization tool

Teller scheduling model based on Queuing Theory

A dynamic retail banking product costing model

"End to end" workflow analysis for assessing cost of errors

Measuring effectiveness of new business prospecting

Benchmarking the best practices

Singular Product Flow Database (SPFD)

Continuous planning and execution are an essential part of managements role in running a business. ProductFlow models are the tools for maintaining the continuity in the decision-making process. Our models are exceptionally easy to understand and implement. Additionally, once in production, the impact on operations is minimal and more than offset by the benefits. ProductFlows models work in 3 phases: Phase 1: Establish the current business baseline - In this phase the initial data is collected and entered into the ProductFlow database. This process is a combination of surveys, automated data collection through integration with existing reporting systems, and manual entry. Phase 2: Identify Best Practices and Recommendations In this phase the ProductFlow models are utilized to identify best practice areas and to derive recommendations for changes to achieve target performance levels. The data describing both phases are effectively managed by the Singular ProductFlow Database to generate intended management reports.
ProductFlow Consulting LLC, New Haven, CT, (203) 467-6380. Raj.gaonkar76@gmail.com

 ProductFlow
______________________________________ Retail Banking Productivity Solutions ______________________________________

Phase 3: Continuous Measurement: Through the automated data collection and other methods established in Phase 1, the effectiveness of the recommendations along with additional recommendations are measured and reported to management via a dashboard feature. This allows for effective management feedback and quicker response time as market and competitive conditions change.

The Singular ProductFlow Database (SPFD) is ProductFlows proprietary database that serves as the foundation for all three phases. The database is frequently updated to provide most recent business information to decision-makers. The database is designed on the basis of DR. Edward Demings Constancy of Purpose principle, which means one database for many applications (ProductFlow models). SPFD offers flexibility that can accommodate banks of all sizes. SPFD contains branch process flows, branch activity volume data and human resources data. Branch activities that are based on procedures are graphically stored in SPFD. The graphical presentation of activities makes it easy to understand processes and relate them to actual workflows in branches. Within a branch network some branches perform at a superior level (Best Practice Branches). A segment of a branch can signify leading edge practices from which there is a great deal to be learned. ProductFlow uses its bench marking methodology to identify and bring out the networks hidden potentials to improve network performance. We refer to this technique as Internal Branch Benchmarking. It is very economical and effective in optimizing revenue and cost. ProductFlow uses this approach in all six of its models. ProductFlow models track progress continuously and periodically generate Baseline Reports that allow management teams to assess progress towards a set goal. The Baseline Report is useful in achieving the final goal in small steps. The models are implementation ready and integrate with the retail system without delay. The optimization algorithms are built to assure accuracy of model outputs. The models have great simulation capability to run what if business scenarios. They allow management to evaluate the outcome of a business decision before its implementation. The reports with graphical presentations such as charts, tables and graphs are produced for managers at all levels. A standardized model output can be modified to create customized statistical reports. Summarized dynamic executive dashboards are generated for senior management to continuously understand the state of the business. The ProductFlow consultants are experts in the retail banking business. The knowledge and experience of our consultants are vital to ProductFlows goal driven profitability solutions. Our consultants have designed and installed many outstanding profitability models at major U.S banks. ProductFlow consultants play a key role in implementing models and training the employees of our clients. ProductFlow models are implementation ready. It takes less than 50% of the normal delivery time for any one of our models. The costs of our models are substantially lower than similar models used by many banks. The cost and revenue improvement yields are worthy of implementing in any size bank, servicing all types of customers in any geographical area. ProductFlow is committed to provide you with quality support for making your bank more profitable. Experience gained by honing performance techniques at several money center banks, has resulted in that rare opportunity to establish a futuristic best practice environment. The rewards from using ProductFlow models are quickly evident because the guiding metrics are used to make immediate business decisions. Now is the time to act and to accelerate your profitability potential. If not now, when? It is not feasible to wait. Get that needed advantage over the competition. Find out how the following ProductFlow models can help you reduce costs and steer you to reach optimal profitability.

ProductFlow Consulting LLC, New Haven, CT, (203) 467-6380. Raj.gaonkar76@gmail.com

 ProductFlow
______________________________________ Retail Banking Productivity Solutions ______________________________________

OPERATIONAL EFFICIENCY 85.0% 80.0% 75.0% 70.0% 65.0%

Mar-04

Activity Based Branch Sizing (ABBS) What should be the branch capacity level to meet branch current and future customer demands? is an important issue for retail banks. ABBS is a branch capacity management tool that plays a critical role in maintaining a lean branch with acceptable service quality levels. . It is an easy to use tool and can be applied to any size branches. ABBS can accommodate network variability defined by customer and geographical segmentations. It is an ideal tool for assessing resource requirements for de novo branches. ABBS is the ultimate tool for reducing excess capacity and minimizing operations cost. . The excess capacity can be effectively utilized for branch sales growth. ABBS can forecast staffing needs for fluctuating seasonal customer demands. ABBS can save 4-5% of human resources cost per year.

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Internal Branch Benchmarking Model (IBBM) Branch benchmarking is a methodical process of measuring, evaluating, and benchmarking the best practice branches within a network. IBBM is a benchmarking tool that methodically provides clear directions to branch management to apply the best practices across the network. Merits of IBBM can be appreciated in expense reduction and revenue improvement efforts. The model is inexpensive to maintain. Savings in HR expenses up to 4- 5% per year can be easily achieved. The model is ideal for accomplishing goals in many small steps. IBBM is an ultimate tool for expense control related to:
Branch Operations Expense Control Branch Staffing and Budgeting Opening De Novo Branches Branch Consolidations Branch Goal Setting

QueFlow According to bank customers, teller service is never adequate. Banks have installed many teller scheduling tools but idle tellers and overcrowded branch scenes are still haunting branch managers.

QueFlow accurately forecasts and schedules right number of full/part time tellers across the entire branch network. The teller scheduling problems can be instantaneously resolved. The teller productivity and customer waiting time are dramatically improved. A branch manager can obtain a quick schedule by half hour interval for an entire day and week. A teller schedule consists of shift start and end times, lunch breaks, back office schedules, and time off from work. QueFlow can help achieve noticeable savings in teller supervision costs through the automation of customer trend forecasting and teller scheduling. It can also provide information to cross train and utilize all resources efficiently and cost-effectively.

ProductFlow Consulting LLC, New Haven, CT, (203) 467-6380. Raj.gaonkar76@gmail.com

 ProductFlow
______________________________________ Retail Banking Productivity Solutions ______________________________________

Undelivered Cards 12.1% Cost of Operation with no Errors 52% Damaged ATM Cards 0.5%

Lost / Stolen Cards 35.1% Total Cost of Operation 100% Incorrect Cards Issued 0.3%

Cost of Branch Errors (COBE) The expense incurred in resolving errors committed by branches or customers, ranges from 10 to 20% of the total cost. According to TQM pundits, the cost of errors can be more than just an expense; it can be cost of poor quality. COBE addresses Bank and customer errors separately. Preventive methods such as charging penalties or fees are used to reduce customer errors. Fundamentally end to end workflow is the source of information for finding remedies for errors. The root cause analysis is a common methodology used in error prevention. Faced with current thin operating margins, its time for retail banks to stop additional expenses on errors. The workflow methodology dictated by COBE is an essential tool for minimizing the cost of error. With a dedicated commitment from management, COBE can help to minimize up to 30% of errors.

New Account Prospecting Analyzer (NAPA) Developing an account prospecting strategy is one of the intricate issues bankers face. NAPA is an ideal tool for determining most profitable product mix and prospecting new accounts at a minimum cost. With NAPA, the profitability due to existing and recommended product mixes can be assessed. More importantly, NAPA provides an optimal product mix that can be prospected by branches. An optimal product mix yields the most revenue under a given set of market conditions. NAPA helps to minimize overall expenses related to new account origination. The model recommends the most effective utilization of branch sales staff. The account prospecting analysis is an ongoing dynamic effort. NAPA is an efficient and economical tool for repeatedly fine-tuning the product mix that enables one to micromanage their revenue goals. The costing methodology computes unit costs by aligning products and branch activities. ABPC uses financial engineering techniques to discretely define bank activities and correlate them to products. It provides a clear understanding of fixed and variable cost components of branch products. The model is structured to support Product Profitability with a high level of accuracy. The potential effect on product costs due to changes in policies is made transparent with its what if attribute. It is a resourceful tool in finding solutions for management issues such as:
Profitability Optimization Branch network restructuring Capital allocation plan Product Pricing structures Business Process Outsourcing/ In-sourcing Product portfolio strategy Customer segmentation Distribution Channel selection

Activity Based Product Costing (ABPC) The Customer Profitability Analysis for retail banking is made easier than ever with the ABPC methodology. It utilizes merits of both Activity Based Costing and Full Absorption Costing to provide prompt and accurate cost information.

ProductFlow Consulting LLC, New Haven, CT, (203) 467-6380. Raj.gaonkar76@gmail.com