Risky Business and How to Eliminate Human Error

– Mark Allen, Chief Technology Officer, Decision Management at Progress explains how business rules management systems can help financial services companies to make the right decisions at the right time –

What are the first jobs that spring to mind when you think of ‘risk’? You might think of a lion tamer, a soldier or even a fireman as the most obvious choices. But what about a job in the financial services industry? It’s true that a finance-focused job might not, at first glance, sound as risky as some of these other professions, but the truth is that, for the most part, those who operate in it have to deal with an almost endless spiral of risk, and face a constant battle to avert crisis.

Mark Allen

Unconvinced? Consider the following: working for a bank or an insurance company is unlike any other profession in the sense that it’s an industry in which making the right business decision is vital at every stage. Making the wrong call due to a change in circumstances could not only lose your customers a ton of money, but it could also result in your own termination, and your organisation being fined if it fails to comply with the rules set by a heavily regulated industry.

To make life even more difficult, these regulations are constantly in a state of flux, which not only makes them difficult to keep track of, but also increases the likelihood of human error. A typical banking organisation has over 300 unique business processes, with up to 1,600 unique activities. With as many as 70% of those activities requiring decisions to be made, often manually, it’s important to find a way to reduce the risk involved in making these decisions, and ensure that the margin of error is removed.

The best way to assure optimal decision-making, and reduce the capacity for human error, is with a Business Rules Management System (BRMS).  A BRMS can be used to automate recurring operational decisions, while also providing the flexibility to rapidly change the way we make decisions (i.e. the business logic).

To take a bank as an example, the BRMS system can, through a system of automated decisions, streamline credit determinations (that might otherwise have been made manually), manage requirements, assess risk and even drive effective collections strategies. Similarly, it can also be used to assist customer-facing staff within the bank to target the right customers with the right products and to deliver effective customer service.

The key to the effectiveness of a BRMS is that it achieves a number of different objectives. Not only does it minimise the margin for error by removing human error from the equation, but it also achieves this in a way that is automated, traceable and auditable. And, unlike traditional programming techniques, business logic within a BRMS can be changed in minutes rather than months, allowing the bank to keep up with ever-changing policy and regulations. Last, the BRMS enables banks to increase speed, efficiency and productivity by allowing staff the freedom to concentrate on other tasks without having to worry about whether or not they have made the correct decision.

Of course, the key to all of this is that financial institutions can still remain in control of which decisions are automated and which are left to be conducted manually in accordance with their own preferences. After all, having people with core skills are key to any successful organisation, regardless of the sector. However, there’s no doubt that having a BRMS in place can save both time and money in the long run. Working in financial services might not hold the same danger as taming lions or dealing with a blazing building, but regardless of your line of work, removing the element of risk is, nonetheless, key!