Buying a home is a significant event in our lives. It’s the largest single purchase most of us will ever make and a home will produce more fond memories than any other asset we own. For first-time buyers it’s often a scary yet exciting launch to a better, more secure and stable future. And experienced homeowners rarely go back to renting, if they decide to move. They see the benefits home ownership brings to the lives of their loved ones and know that, if done right, buying a home can be a terrific long-term investment.
For a multitude of reasons, home-ownership rates vary drastically by country around the world. Everything from the local economy, lending and tax rules, and culture can sway results and opinions. In the U.S., they call home ownership the “American Dream,” but the banking meltdown, which tightened lending rules and wallets alike, has caused homeownership rates to decline over the past few years to 65%, the lowest since 1995. In Canada, the dream is a little closer to reality with about 70% of the population owning homes, but newcomers are taking a wait-and-see approach to home purchases.
Regardless of where you are in the world and what the situation is, if you are trying to buy a home, one thing is certain - you want the process to be as simple and painless as possible. You want a bank that can offer you more than just a low interest rate on a mortgage. You want a bank that understands your needs, offers good advice, and is flexible and responsive.
The National Bank of Canada (NBC), the sixth largest bank in Canada and the leading bank in Quebec, understands this concept and has put the customer at the core of its mission. “Our vision is to create an ultimate experience for our customers,” said Paolo Pizzuto, senior vice president of Business Process Reengineering at NBC, in a video interview with SAP. “We listen, we understand, and then we propose the right solution to the customer. It has to be simple and it has to make sense.”
With more than 150 years of history, CAD$185 billion in assets (April 2013), and 20,000 employees, NBC is consistently rated one of the strongest banks in the world by Bloomberg Markets. NBC takes great pride in its strength as an institution and its ability to turn the complexities of banking into simple transactions for its customers. But simple was not always the case for NBC – inside the company or for customers. “Over the years, National Bank built processes and technology systems that were mostly siloed,” said Pizzuto. This made it very difficult for NBC to service customers through its main channels and lines of business.
In 2008 NBC began a journey called “One Client, One Bank” to break down the silos. The goal was to ensure clients receive a level of service that meets their needs and expectations, regardless of their point of entry into the bank. “We redesigned our processes throughout our channels, integrating them and breaking down the silos,” said Pizzuto. But in the past, NBC underinvested in technology, so its underlying business systems could not support the new strategy. Customers could originate the same type of mortgage transaction via six different channels and get six different offerings tied to multiple systems. Because there were multiple hand-offs in the multiple channels, the customer experience was not at its best. “We were faced with downtime, delays, and high error rates throughout the bank, and our customer satisfaction was being impacted by this,” said Pizzuto.
To resolve its IT system issues, NBC put together a modernization project team and began defining its business requirements at a detailed level. They looked at all the different customer scenarios and designed a customer experience matrix. “We started envisioning what the customer experience should be for a mortgage request, or a personal loan, or opens an account,” said Pizzuto. From there the team could start looking for a new solution that would best fulfill the needs of each customer.
After a thorough selection process, NBC chose the SAP Customer Relationship Management (SAP CRM) application. “We went through such a rigorous process it took us about ten months to down-select the solutions, and SAP came out to be the winner,” said Pizzuto. NBC felt SAP was the best and safest long-term investment it could make for its core banking systems. SAP is committed to building best-in-class software solutions for the banking industry, the SAP CRM functionality met NBC’s requirements, and a large eco-system of partners and solutions were available for additional support where needed. “We felt the SAP CRM solution would bring the best value to the customer and the best business value to the bank,” said Pizzuto.
When it came time for the implementation, NBC did not make the common mistake of customizing the software. “We modified our business to fit SAP versus SAP fitting our business,” said Pizzuto. “ NBC changed its way of thinking, looked at what the software could do, and leveraged the built-in best practices as much as possible. “We decided to standardize and simplify our process throughout all the channels, and automate a great deal of the activities in the process,” said Pizzuto.
During the implementation, it didn’t take long for NBC to see the benefits SAP would bring. “We quickly realized that our administrative costs would come down, our processing cost would come down, our error rates would come down, and customer satisfaction impact would be quite significant,” said Pizzuto. NBC also looked forward to increased sales. SAP CRM would give the sales team quick and easy access to every asset in NBC’s portfolio, making it easy for them to cross-sell and up-sell additional products and services to customers while working with them on their mortgages.
From October 2012 to March 2013, NBC piloted the new SAP CRM solution in 15 branches. During the pilot customers and employees were asked for feedback. Customers indicated they were very pleased with the new level of service. “Ninety-one percent of our customers were extremely satisfied with the process,” said Pizzuto. Employees said they felt much more professional when working with customers because they understood the process, could interact better, and had access to more information. “We succeeded in simplifying, standardizing, and automating the process,” said Pizzuto.
NBC is now in full deployment mode and has about 335 of 450 branches up and running on SAP CRM. About 2000 employees have processed over 4000 mortgage files in the new solution. It was a big change for employees, but they clearly feel the benefits and time savings. “In the past it took us roughly two hours and 50 minutes to get the customer's mortgage origination file adjudicated. We’ve reduced that down to about 50 minutes,” said Pizzuto. Many administrative and non-value-added tasks have been automated with workflows or eliminated, which has greatly reduced down time and paperwork. “Our greatest surprise is that we have no more physical mortgage file, everything is stored digitally,” said Pizzuto. This gives employees a lot more time to focus on building new and deeper customer relationships.
Around September 2013, deployment to all branches and a mobile sales force of approximately 250 will be complete. “We'll have 2,500 end users, three channels integrated to the solution, and 90% of all our retail lending will be leveraged through the deployment as we move along into 2014,” said Pizzuto. NBC’s mobile sales force is very specialized and needs a reliable platform. “They needed a mobile platform with remote connectivity and SAP offered that solution,” said Pizzuto. With SAP they now have everything they need to do their job on the go. They can work on a mortgage at the customer’s home and digitize the entire process. No paperwork is left behind. This turned a slow process that required two or three visits to a branch and multiple faxes into a simple one-hour meeting at home. “It's better to deal with a mortgage at your house at 8 o'clock at night than going to a branch – especially if you're a young couple with children,” said Pizzuto. “Buying a home is one of the most important events in the customer’s life, so let’s make it as easy for them as possible.”
As an NBC sales person is working with the customer on their mortgage, there is an opportunity to also look at the customer’s broader financial picture and work with them on other products such as lines of credit, credit cards, and insurance. “That's how we leverage the CRM piece from SAP. And the benefits are that we're cross-selling, we're up-selling, and in the one-hour meeting, the customer leaves with a financial package rather than a product,” said Pizzuto.
With SAP in place, NBC is realizing a long list of benefits that span across the business, employees, shareholders and customers. Employees are more professional, efficient, and customer focused. Switching from selling products to selling solution-based financial packages has increased customer retention and revenue. And most importantly, NBC has raised its customer satisfaction rate to over 90% by making it easier for customers to work with the bank and achieve their dreams.
In the next five years, Pizzuto feels NBC will be one of the most efficient banks in terms of process management. By then NBC will be leveraging most of the SAP CRM functionality and will have a solid foundation for growth and customer excellence. “We want to be recognized as a bank that really takes care of its customers – that is our main driver,” concludes Pizzuto.
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