Ahli United Bank overcomes system deficiencies

ahli-united-bank1

Overview:

The Ahli United Bank is an award winning bank in the Middle East, known for its premier pan Gulf, Middle Eastern Retail, Corporate, Private and Investment Banking services. They offer a wide range of products and services in corporate, retail, investment and private banking.

Challenge:

The Ahli United Bank had been facing customer dissonance and some customer service issues for a while – mainly due to transaction omissions / errors, lack of timely updates and incorrect installment deductions/remittance. With the remittance reconciliation backlog exceeding 36 months, the entire servicing and operations team of the bank had to get fully involved in solving this issue.

About 90 percent of the Bank’s customers avail its direct debit service with a significant portion of the loan portfolio comprising mortgage loans with Escrow (with joint accounts being with spouses or members of the same family). Account holders opened an escrow account with Ahli United Bank and their employers would then credit their salaries to their loan account. Deductions would be made based on the instruction of the account holder and the balance would then be credited to the account specified by the customer.

The Core Banking System that the bank used – Phoenix – was unable to support this which meant that the process was handled manually! That included –

  • The Calculation of instalments
  • The Posting of instalments to respective loan accounts based on customer instructions
  • The Remittance statement generation
  • Reconciliation

This manual process was error prone – which led to customer dissonance impacting customer satisfaction directly.

Solution:

Xerago analyzed the current process of installment and remittance and came up with an elegant solution in the form of a seamless automated remittance management system that covered the entire lifecycle of remittance, and which required minimal change management on the part of the bank’s personnel. Xerago developed the XIR (Xerago Integrated Remittance) with features like automatic instalment calculation, automatic instalment posting, automatic remittance statement generation, automatic reconciliation, integrated workflow, maker-checker feature, auto alert etc.

XIR is an enterprise class application that requires minimal manual intervention, with a unique workflow and a highly integrated process. It gets its input in a prescribed format as the customer master from Phoenix (using a cron program), salary amount for each customer from employer’s bank and customer instructions from the front end. (Phoenix was a closed system and XIR used Sybase to communicate with it) Based on these three parameters, the XIR automatically calculates the instalment for each customer, auto debits the instalment and sends an upload file format back to Phoenix with details like salary received, instalment debited, balance amount and the bank account to which the amount has to be credited. XIR also generates a statement bank-wise and sends them to the respective banks via the SMTP gateway.

Apart from this, in order to improve the effectiveness of the application, Xerago successfully factored in variances in salary and built intuitive automated functionalities to detect bonuses and advance salary credits for 2 months using an algorithm. XIR also provided user-friendly alerts that would publish Tasks for the day for Tellers, Finance Users, Back office processing teams, Collections Teams and Admin providing a 100% workflow visibility.

With so much visibility available on transactions to stakeholders and recons moving swiftly between teams, customers were given timely notifications, transaction turn around times were greatly reduced and opportunities for errors in deduction of Escrow accounts were completely removed. This resulted in significant improvement in customer satisfaction and a great reduction in customer dissonance.

Deliverables:

Process Automation Tool (XIR), User Manual, Training and Annual Maintenance Support

Outcome:

  • Over 93% efficiency improvement
  • Over 85% cost savings due to manual overhead
  • 100% trail and transparency
  • Significant improvement in review process with zero slippage for recons
  • Better MIS and greater control
  • Zero customer impact due to incorrect deduction on Escrow accounts achieved
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