Credit Card Application Business Process

To assess customer sentiment and predict buying behaviors, organizations must leverage internal and external sources of informationalong with strong master data managementto gain a 360-degree view of the customer. When organizations can harness Big Data from a wide range of sources and analyze it in many ways, they are able to uncover insights that can have profound effects on their businesses. The sources for capturing this valuable data today come from many places. Much of it comes from within the organization such as from functional area databases a_n_d_/_o_r_ _a_n_ _E_R_P_ _s_y_s_t_e_m_'s_ _central repository, and a great deal of data comes from outside of the organization.

Finance companies, particularly those in consumer lending, are using Big Data analytics in order to spot trends, patterns and hidden insights. They seek to find answers to complex problems and quickly identify new and better courses of action by visually exploring their data. Their intent is to assess the credit risks of their current and potential customers, identify their borrowing habits and patterns for cross-sell opportunities, and identify and mitigate fraud or identity theft.

A small, regional bank headquartered in St. Albert, has finalized their fiscal goals for the year, including its business strategy designed to support meeting these goals. As part of this strategy, senior management at the bank has set the objective of aggressively growing its consumer credit card base to hopefully help meet its revenue targets for next year. They have set a target of increasing their consumer credit card holders by 10%. As part of its action plan, the Marketing department has set its sights on initially partnering with retailers in the region and offering new credit cards through them. For every customer they sign up, the bank will compensate them with a $50 commission. They have decided to initially partner with only those retailers of large ticket items first, such as furniture and appliance stores.

You are part of a team of employees working for the bank and assigned to this project. Your

team is made up of people from the bank'sMarketing, Consumer Credit Card Operations, Underwriting and Security departments of the bank. Your team draws out beforehand what it foresees to be the entire application process initiated through a furniture store acting as the intermediary. Here are the steps you come up with along with your estimate of lead time from when an Applicant first completes the application to when they are advised as to whether they have been accepted or not (_i_._e_._ _t_h_e_ _b_a_n_k_'s_ _decision).

Process:

1. Customer decides to make a purchase at a local furniture store.

2. Customer wishes to purchase using credit - _the furniture Retailer offers a no fee credit card from the Bank.

3. Customer (now a credit card Applicant) agrees to apply and completes a paper application, with the Furniture Salesperson' assistance. The application asks for personal and financial data, including a SIN. The Salesperson fills out the application for the Applicant and then faxes it to the Bank.

4. The Bank receives the faxed application and begins its credit card application process.

5. The B_a_n_k_'s_ _Credit Card department first reviews the application to ensure its accuracy and completeness. If the application is completed in full and with the required information, a clerk in the Credit Card department faxes a copy of the application to one of the major Credit Bureaus in Canada, Equifax, requesting t_h_e_ _a_p_p_l_i_c_a_n_t_'s_ _c_r_e_d_i_t_ _h_i_s_t_o_r_y_ _a_n_d_ _c_r_e_d_i_t_ _s_c_o_r_e_.

6. Once faxed, the clerk then hand delivers the original application to the Ba_n_k_'s_ _Operations Department to determine if the Applicant is a current (or former) customer, or otherwise a new prospective customer to the bank. If the Applicant is a current or former customer of the bank, i_n_f_o_r_m_a_t_i_o_n_ _r_e_g_a_r_d_i_n_g_ _t_h_e_ _A_p_p_l_i_c_a_n_t_'s_ _s_t_a_t_u_s_ _a_n_d_ _h_i_s_t_o_r_y_ _w_i_t_h_ _t_h_e_ _bank would be available (e.g. Are they in good standing? What is their credit payment history? What are their account balances if they still bank there? How many and what types of accounts do they have? What other bank services do they use?)

7. Operations searches its records for the Applicant and an Operations clerk forwards the application with any information regarding whether Applicant is a current or former customer of the bank on to the Underwriting Department. Included with this information is whether the Applicant is or was a customer in good standing or not, the types of accounts held, asset amounts, credit history with the bank, etc. If it is a prospective customer, the Underwriter assigned to review this application is informed of this by Operations, and therefore, the reason why no bank information can be provided.

8. Equifax receives the faxed application from the Bank's Credit Card department and "pulls" _a credit history and credit score from its centralized database. It then faxes this information to the Bank's Underwriting Department.

9. One of the department Underwriters reviews the completed application, the applicant's status with the Bank, and their credit bureau history/score in order to render a decision (accept or reject) based upon the Bank's established underwriting standards. The Underwriter either accepts or rejects the Applicant and then f_o_r_w_a_r_d_s_ _t_h_e_ _A_p_p_l_i_c_a_n_t_'s_ _f_i_l_e_,_ _a_l_o_n_g_ _w_i_t_h_ _their decision, b_a_c_k_ _t_o_ _t_h_e_ _B_a_n_k_'s_ _O_p_e_r_a_t_i_o_n_s_ _d_e_p_a_r_t_m_e_n_t_._ _If accepted, a credit limit is assigned to the new credit card account based upon that A_p_p_l_i_c_a_n_t_'s_ _c_r_e_d_i_t_w_o_r_t_h_i_n_e_s_s_.

10. Once the Operations Department receives the A_p_p_l_i_c_a_n_t_'s_ _file from the Underwriter, an Operations clerk then faxes the ba_n_k_'s_ _decision back to the Furniture Retailer. If accepted, the Bank also faxes a temporary, paper card to the Retailer. The Applicant may use this temporary (paper) card until the actual credit card arrives in the mail. T_h_e_ _R_e_t_a_i_l_e_r_'s_ _S_a_l_e_s_p_e_r_s_o_n_ _t_h_e_n_ _informs the Applicant of whether they were accepted or rejected. And if accepted, they are told their starting credit limit amount and given the temporary card.

11. The Applicant then completes their purchase using either their new (temporary) credit card, if accepted. If rejected, the Applicant must find other means of payment.

Your team is not pleased with its estimate of a 45-minute lead time. They believe that it is far too long and will be a detriment to the appeal of applying for their credit card - _most people would not be willing to wait that long in a store for their application to be processed. Your team is fully aware that many other Retailers offering bank credit cards provide decisions to Applicants within 3-5 minutes. Being sensitive to this competitive environment for credit cards, your team comes up with an objective of r_e_d_u_c_i_n_g_ _t_h_i_s_ _e_n_t_i_r_e_ _p_r_o_c_e_s_s_'s_ _l_e_a_d_ _t_i_m_e_ _t_o_ _a_ _t_o_t_a_l_ _o_f_ _5 minutes or less.

Answer the following related questions to this case. Please be thorough, yet very concise in your answers.

1. Your team has verbalized what it foresees as the_ _a_p_p_l_i_c_a_t_i_o_n_ _p_r_o_c_e_s_s_ _f_o_r_ _a_ _c_r_e_d_i_t_ _c_a_r_d_._ _T_h_a_t_ _i_s_n_'t_ _good enough. Now, it is time to document the process for more efficient analysis. Create a BPMN of this process as described step-by-step above. Use Visio as part of Office 365 to construct your diagram. Use the standard symbols and structure for a BPMN as discussed with your Instructor for all actors, activities, decisions, sequence flow, information flow, inputs, outputs, and sources of data and information (databases). C_o_n_s_i_d_e_r_ _t_h_i_s_ _y_o_u_r_ _"a_s_ _i_s_" _d_i_a_g_r_a_m_ _o_f_ _the process, which is a graphical depiction of all, or possibly most of the steps described above. Note that all the actors in the process steps described above are people. Standard rules apply to this BPMN. You must number each activity that each actor is performing. A brief descriptor of the activity must also be inserted into the symbol - _1 or 2 words maximum. Workflow arrows indicating information flow/handoff and the sequence of activities must be included. The type of information being transferred or handed off must be inserted on the arrow - _a brief 1 -3 word description. All actors must have their own swim lane. There must be a logical beginning and end to the entire process. No other explanation is required; no footnotes. (30 marks)

2. G_i_v_e_n_ _y_o_u_r_ _t_e_a_m_'s_ _p_r_o_c_e_s_s_ _o_b_j_e_c_t_i_v_e_,_ _w_h_i_c_h_ _o_n_e_ _o_f_ _t_h_e_ _f_i_v_e_ _s_t_r_a_t_e_g_i_e_s_ _f_o_r_ _a_ _c_o_m_p_e_t_i_t_i_v_e_ _advantage, as described in the course textbook, is the bank attempting to execute? Please provide reasons supporting your answer. Hint: to be successful, it has been proven that organizations can execute on only one strategy at a time for a competitive advantage. (10 marks)

3. In the financial industry, standardization and controls are very important. Explain why your team must insist that this process have standards and controls in place and are to be followed by all participants in this process. Provide at least two benefits of standardization/controls for this business process and two related risks if it there are none. (10 marks)

4. This course is all about using computerized information systems to improve business processes. As already mentioned, your team is not pleased with its estimate of a 45-minute lead time. They believe that it is far too long and will be a detriment to the appeal by consumers applying for their credit card. Your team has come up with the o_b_j_e_c_t_i_v_e_ _o_f_ _r_e_d_u_c_i_n_g_ _t_h_i_s_ _e_n_t_i_r_e_ _p_r_o_c_e_s_s_'s_ _lead time to a total of 5 minutes or less. Come up with activities that can be automated by a computerized IS or other improvements instead of being performed by a human actor. Put these changes/improvements in a_n_ _"o_u_g_h_t_-to-b_e_" _d_i_a_g_r_a_m_ _following the same BPMN rules. Once again, use the standard symbols and structure for a BPMN as well as follow all rules. In a_d_d_i_t_i_o_n_,_ _t_h_i_s_ _"o_u_g_h_t_-to-b_e_" _p_o_r_t_i_o_n_ _o_f_ _t_h_e_ _a_s_s_i_g_n_m_e_n_t_ _r_e_q_u_i_r_e_s_ _a_d_d_i_t_i_o_n_a_l_ _i_n_f_o_r_m_a_t_i_o_n_._ _Any changes that a_r_e_ _m_a_d_e_ _f_r_o_m_ _t_h_e_ _"a_s_ _i_s_" _d_i_a_g_r_a_m_ _m_u_s_t_ _b_e_ _f_o_o_t_n_o_t_e_d_ _i_n_ _t_h_e_ _B_P_M_N_._ _P_r_o_v_i_d_e_ _a_n_ _explanation in the footnote describing the change, why your team chose to make this change, and how much time do you believe it will shave off of the entire process lead time. This footnoted p_o_r_t_i_o_n_ _o_f_ _y_o_u_r_ _"o_u_g_h_t_-to-b_e_" _B_P_M_N_ _will carry the most weight. (40 marks)

5. Is your objective of a lead time of 5 minutes or less considered an efficiency or an effectiveness type of measure? Answer this question, but first explain the difference between the two. (10 marks)

Additional Instructions:

Case study is worth 10% of the final mark for the course. This is a group-oriented assignment. Late submissions will not be accepted.

2. Assignment submissions should be in soft-copy through uploading to the Drop Box; MS Word format or .pdf are the ONLY acceptable forms for submissions - all other forms will be rejected and therefore will result in a score of zero; note: your Visio diagrams (or if you are using draw.io or some other app to create your BPMNs) must be cut-and-pasted into the Word document. A Cover Sheet stating the assignment, your Section number, Group number, and the names of all contributing team members is required. Submissions missing a cover sheet containing this information or containing only partial information will be penalized 10 points (out of 100 possible points).

3. Technical issues, Internet outage or connectivity loss, or failure to submit when uploading, are not acceptable excuses for missing the deadline; therefore, as a fallback, emailing of this assignment will be accepted, but only as the very last resort. Even if you are less than 1 minute past the expiry date for this assignment, your submission will be rejected.

4. Use of another person's work without providing credit will result in a mark of zero for all members. And remember, if your name is on the cover sheet of your submission, you are attesting to the authenticity of the content in the document, regardless of which team member or members was/were the author. In short, CHECK AND VALIDATE THE AUTHENTICITY OF YOUR FELLOW TEAM MEMBERS CONTRIBUTIONS.

5. All requirements as per the posted Guidance Document will apply as well.