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Case Study: First Niagara Bank Boosts Operational Efficiencies

Case Study: First Niagara Bank

At times, businesses take on mega success before they’ve grown to accommodate it.

While super success is something all businesses seek, being able to keep up with tremendous surges in gains on existing resources and budgets can be problematic.

Here is a case study reflecting such an issue encountered by First Niagara Bank, formerly headquartered in Buffalo, NY.

A quick company history: First Niagara Financial Group, Inc., the parent company, was the 44th-largest bank in the US, having over $37.1 billion in assets as of June 30, 2013. By October 2015, First Niagara Bank agreed to be acquired by KeyCorp.

First Niagara Bank’s Dilemma: Keeping Up with Successful Growth

Situation: First Niagara Bank had grown very quickly from a local savings bank into a mega regional bank through an aggressive acquisition strategy.

The bank boasted great efficiency ratios driven by asset acquisition and lack on enterprise investments.  However, First Niagara’s organization grew to support a local savings bank with OTS oversight.

They needed to mature quickly to support multi-state, complex products, and services with OCC oversight. First Niagara’s FIS MISER Core was designed for small savings banks – and the bank was rapidly pushing its limits. Efficiency ratios had to be maintained to support continued acquisitions.

Problem:  How to create and mature an enterprise-wide organization using existing resources and budgets to support First Niagara’s new mega regional presence.

Out With the Organizational Silos & Existing Processes

Advice: Break down organizational silos and throw out existing processes, since both were antiquated and irrelevant. Replace with communities of domain expertise organized by unified processes, peer-reviews, and enterprise level steering committees.  In summary, do much more with less.

Step-By-Step: Actions Taken to Transform First Niagara Bank

  1. Discovered and mapped all existing processes currently in use. This proved to be a challenging task requiring many dedicated man-hours across the enterprise to describe daily activities, deliverables, and outcomes. Many hours were spent in conference rooms and WebEx sessions.
  2. Value stream mapped the processes with process owners, capturing value and eliminating waste. The process maps captured in the first step reflect actual processes which must be scrutinized to understand why it occurs and what value it delivers. This is done by the process owners who are accountable for outcomes.
  3. Performed a gap analysis by exposing processes to enterprise scrutiny, such as regulatory compliance and risk groups. The value stream mapped processes must be negotiated with all supporting organizations to understand gaps, authorities, and compliance.
  4. Negotiated process inputs/outputs/authorities between groups to fill the gaps and establish flows. Every input/output between groups must be supported by an agreement between these groups. Any changes by any group must be approved by all affected parties.
  5. Unified all processes into an enterprise lifecycle of processes. One source of truth for the whole organization eliminated all process rework, handoff mistakes, confusion, and delays. Once understood, documented and under enterprise control many of these processes were automated with Service Now workflows. Advice: Never automate a process you do not fully understand.
  6. Created communities of domain expertise to support processes and provide peer reviews, and enterprise level steering committees to enforce adherence and change management.
  7. Published the unified lifecycle as the one source of truth via a live web portal for the whole enterprises. Always the latest, greatest, compliant and approved processes.

Outcome: It took approximately 4,000-man hours across the enterprise, 6-months duration to discover, streamline, negotiate and publish “one source of truth” for the whole enterprise.

This led to an extraordinary jump in operational efficiencies and process maturity.  The old top-down, antiquated, and incorrect processes were replaced with a continuous improving and community-maintained unified lifecycle of processes.   Many we eventually automated with Service Now.

Patrick Martin is an industry expert in banking technology, deciphering the elements that work collectively towards progress – and building a roadmap for successful execution.
Contact him today to see how he can use his innovative strategies and industry expertise to help your organization.





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