21st-Century BPM with Citibank Brazil: Shrinking Response Times From Weeks to Seconds with Contextual Process Management

Reading Time: 9 minutes

Event-driven, contextual BPM has emerged in 2015 as a top-of-mind issue for CIOs in all sectors‚ÄĒintelligence, fraud detection, energy, retail, and financial services. Citibank¬†announced that event-driven BPM has reduced their cycle time by 70%, giving them tremendous advantage against their competitors in Brazil. New architectural ideas are required to make BPM real time and event-driven.


Ellis: You’re listening to the TIBCO podcast. Welcome to the TIBCO podcast. I’m your host, Ellis Booker. Today’s topic is business process management, and how BPM, a 30 year old concept is evolving in light of real-time analytical platforms. Call it event-driven BPM. What’s more, the latest BPM deployments are taking advantage of new trends and disruptive technologies such as fast data, the internet of things, and mobility. All this promises a lot of innovation around how businesses operate and deliver value. To talk about BPM trends, our guests today are Roberto Mercandante, Senior VP at Citibank Brazil, and Mark Palmer, Senior Vice President of Engineering at TIBCO.

Ellis: Mark, let’s start with you. Can you explain how, technologically, event-driven BPM is different than traditional BPM?

Mark: Sure, so traditionally, businesses process management has been something triggered by an event with a human being all the time. So somebody calls into a business and reports a problem or asks a question and that can trigger a flow of events internal to the organization that respond to that request. Now fast-forward to sort of the modern era where everybody’s got their mobile devices, everybody expects questions to be answered right now. We’ve got the internet of things bombarding enterprises with information. So what’s different now is that these business process flows need to be more event driven, right? So you can respond to events as they come in, maybe by a mobile device or when a sensor picks up that somebody goes into a store. So that a very different type of more real-time business flow, and what it presents as a business problem is that businesses are expected to respond more quickly to these kinds of events and we reduce their cycle times to respond to events because of that demand of real-time. So that’s more of a contextual or event-driven business process flow and that’s that we’ve been focusing on at TIBCO for several years.

Ellis: Roberto, why is event-driven contextual BPM important to an organization like CitiBank, Brazil?

Roberto: Well we understand, Ellis, that the profile of our customers is changing. As Mark was mentioning, the people want to use the smart phones and their iPads and the internet. They don’t go to the branches as would happen in the past. They want to have their loan approved or in the near future, hopefully. Even opening an account by just using their smartphones. This changes the context dramatically, so it is important for us. All the banks are looking for efficiency, opportunities, and actually responding to what the customers are asking. So we’re going digital, right? As much as possible and then event driven solutions are basically an essential portion of this.

Ellis: Roberto, I’m given to understand that there are real world implications for this process optimization at CitiBank Brazil. You’ve reduced loan approval times by something like 70%. Can you explain how that happened?

Roberto: Sure, we had, in the recent past, we conducted a project for customer on-boarding. Customer on-boarding is not really about loan approval, it’s about the whole end to end process of opening an account, actually starting the process for loan approval, and so on. So what we did was built an architecture using traditional BPM. It was not entirely event driven, however a number of sub-processes inside of the bank, they will be event driven. They will provide information in real time, they will not have any people waiting. So we will have events triggering sub-processes inside. So that has changed dramatically the way we did and ultimately the result was to improve the cycle time for the customer on-boarding process for our customers.

Mark: And this architecture, I think, is becoming more common where a lot of the processes don’t have . . . there are definitely human beings in the process, but they also depend on machine to machine communication and Roberto, I think that’s the case in your environment. Especially in the banking sector, right? Because so much of the information that comes into the bank is coming from digital sources.

Roberto: Correct, that is correct. The internal process was fairly complex. It has a number of compliance and regulatory constraints we had to obey, so you have to take these into account and at the same time, you have three types of activities you have to optimize. Perceiving or receiving the requests, doing the analysis, and actually responding back to that request. So if you pay attention to those three major activities, you’ll see they’re highly automated, some more, some less, but some of them are event driven and it changes the whole context.

Ellis: I think we can all understand that automating these processes would obviously, dramatically speed up your process and save costs, you could take human labor out of things. But I guess the question is for environments where there are a lot of processes, and banking would be one of them, how do you know which are amenable to automating in this fashion? Let’s start with Mark on that, I mean, how do you get visibility on the processes, the events that you can put into this automated system?

Mark: Well, you know, I mean event processing is core to that. There are new fields of technology, streaming analytics, complex event processing, and then processing in general, which are generally designed to take millions or even billions of events that will come flowing through an IoT sensor and distill those into the conditions that actually matter. So for example you may have a business process flow that’s triggered by a lot of people coming to a particular branch or something, right? A sensor could pick that up and understand what kind of traffic is in that particular physical location and that might distill millions of events down into a few that then trigger a business process flow with people involved to handle. So event processing is a big part of it, so is integration, from an enterprise perspective being able to carry all of that event information because it tends to be much larger volumes, for example. So those are some of the technological ways of managing the events. In terms of identifying which one’s affecting this process, it might be something interesting to ask Roberto about, how they think about that.

Ellis: Exactly, so Roberto, at Citibank Brazil, what were the high value events that you determined could be pulled into this contextual business process?

Roberto: Right. We had, I’ll give you an example, Ellis. We had one ID that we assigned to a particular customer, we are talking about companies, right? We are talking a particular segment that we automated the process, which is the commercial bank segment. So every customer receives an ID, and actually the ID you may even have the headquarters of these companies somewhere else, in Asia or the United States, so you have to actually trigger an event here in Brazil because I’m opening an account and approving a loan for a customer but his ID is actually centralized at Citibank so you need to trigger this, and it’s actually it’s in Asia. So it kicks off an event there and does some processing overseas, and it comes back with the ID automatically for us. We’re keeping this centralized, and at the same time, it’s very fast. So that’s a typical example of how you do this event driven process.

Ellis: Next, a question for both of you. What are some of the organizational and political challenges CIOs face when implementing this scheme, this event driven contextual BPM? Roberto, let’s start with you.

Roberto: Sure, I would say that the challenges are huge, are not simple. I would divide them into two, building the solutions and actually executing those solutions. Building, you’ll see that you have to take the correct methodology to do this, and this is fairly new, introduces some new concepts in how you do this. Which sort of parts of the process where you can do this, what sort of events we are relating here. So that is an interesting type of work to do, it’s very challenging. I would say the other part is how you manage your environment, how you manage your processes. This is no longer the same old-fashioned, where you’re going to be actually executing processes in a very passive manner. So this is event driven, this is real time, so the people are not necessarily used to doing this, especially in the back office or the front office in what’s happening. Because it’s all click driven, coming from smart phones and iPads and internet and the volume’s pretty large. How do you control this environment? So executing takes a change of the mindset of people, I would say that’s probably the largest part. The human component behind the scenes, I’m talking about the bank itself. How the bank controls this and how does it know what’s going on? That’s an interesting challenge.

Mark: Yeah, I definitely echo that and extend one more point, linking to your point, Roberto, about the technology is that we find that event driven systems are not natural for programmers and technologists to be designing. Generally, you know, the standard architecture in most enterprises is, you store a bunch of data in a database, and then you query it sometime later, maybe an hour later, maybe a day later, then you figure out what happened. We kind of think of that as a backwards looking architecture. But the front view mirror architecture is look at events as they’re flowing by and make decisions on the fly, and that’s a different way of constructing software systems. So we see very consistently that that’s a new way of thinking for a lot of technologists, but it’s pretty exciting because it’s all about automation.

That leads me to my second point. When you’re talking to CIOs, what I hear a lot is that there’s kind of, and you touched upon it before in your question Ellis, you were saying taking costs out of the business effectively because you’re automating some processes. I think there’s a large fear in most enterprises about some people feeling like their jobs are going to go away as a result of automation. Now, in some cases, that could be true, but in others actually, we’ve seen clients kind of morph the people power that they have from doing fully manual non value-add processes to working on more interesting, more high value processes.

So for example, we have one customer that took out a good part of their support staff as a result of automating some responses to customers, but what they did with the support staff is they actually morphed them into proactive customer service, outbound sales people because they could see, they say, “Hey, I see that there’s a problem with the way you’re interacting with our firm, so why don’t you do it slightly differently?” They’ll actually call their clients, correct their actions, and make their experience actually better so instead of a reactive support function, they turn into a proactive almost sales function, which provides better customer service and actually in a lot of cases can generate more new revenue. So it’s really kind of a, it’s not so much about automating and taking all of he people out, it’s about automating and then making the people better at what they’re supposed to be doing.

Roberto: Right, I would add one more point there, Mark. I see another thing that we can see, maybe it’s a Brazil thing. But you see differences on the ages of our customers. Some of our customers prefer going to the branch, that’s all they did in their lives and they’re fairly old. They’re part of the baby boomer generation, and some of the others are the exact opposite. They want to do this on their iPhones, they want to interact with the bank on their iPads. So we have to keep both situations because the customer experience is important for us. How do you manage both profiles at the same time?

Mark: It’s interesting, because I was at a presentation from a sociologist actually last week, and he was talking about the generational differences between baby boomers and millennials, so I don’t think it’s a Brazil thing at all. And he was saying exactly this, that millennials are used to and expect you to provide all services through iPhones. Why wouldn’t they? They grew up with them, they were practically born with them at this point, right?

Roberto: Absolutely.

Mark: But, you know, maybe folks from previous generations will say they’re used to walking into the branch but that’s fine, that means businesses have to design their systems to accommodate both which I think that’s what we’re saying here. So I don’t think it’s a Brazil thing at all, I think it’s probably generational.

Ellis: And I think there’s probably a follow up we could do on systems that are handling both sides of this equation, the high-touch personal interactions but also keeping in mind the automated systems for the digital-centric audiences. It’s obviously a hard problem. For our last question, I’m going to return to Mark. Mark, what would you recommend a customer who wanted to start down this path to event driven contextual BPM do first?

Mark: Well, I think this last part of the conversation is the crux of the matter, right? Which is you’re talking about automating four kind of a different class of customer and user. You really have to rethink the way that you’re building your software systems that respond to people who want everything on their iPhone, or they expect to interact with you through social media and live channels. So, I’ve found some of the best practices to include starting with a smaller version, a lot of companies are starting off with this at the very start. So a lot of the best successes I’ve seen are to pick some really compelling and important parts of a problem, but don’t try to automate everything at once. Pick off some key processes where automation is necessary and where the customer expects that sort of real time response. Focus on those and then pick innovative technologists, people that might even think differentially about building systems in this sort of non-traditional way. Meaning with fast data, with maybe event processing instead of using a database out of the box all the time. So starting small, starting with innovators and then incrementally improving the system over time, those are some of the best practices for how to start and then the best practices of how to go forward.

Roberto: If I may, I would just like to add once point just reinforcing the skills you need on developing this type of architecture. You’re not going to do this with the IT traditional methodologies and people. You’re going to have to think differently in order to do this.

Ellis: And that will have to be the last answer. We’re run out of time. I’d like to thank both guests, Roberto Mercandante, senior VP at Citibank, Brazil, and Mark Palmer, senior vice president of engineering at TIBCO for being on today’s TIBCO podcast. Thanks for listening.