What digital processes have proved to be essential during the coronavirus pandemic, and how will things progress in terms of digitalisation? General Executive Manager Ulrich Scheer looks back and into the future.
Mr Scheer, has the coronavirus crisis made it more pressing for MünchenerHyp to digitalise its processes?
We regarded this as a very pressing task even before the coronavirus outbreak. When setting out our strategy back in 2018, we addressed the issue as an area for action right across the bank. In particular, we see vast potential in the retail business, which is highly standardised. Therefore – regardless of coronavirus – processes have been and continue to be digitalised: from connection of external systems and full electronic processing of incoming correspondence to (partial) automation of downstream core business processes.
Which (digital) process proved to be essential in the coronavirus crisis?
Mobile working from home covered all processes and was essential to our business. The tasks involved included equipping all employees with laptops, VPN capacity and the facilities for digital collaboration under the works agreement. Digital processing of loan requests and electronic approval workflows were also essential.
In addition, changes such as electronic processing and approval of invoices, and digital applicant management have helped us to maintain our efficiency levels despite the pandemic. Another advantage was the digitalised HR and appointment processes in IT, which fortunately were already automated before the pandemic. Further operational adjustments were made on an ad-hoc basis. Changes were implemented proactively at great speed in order to adapt our processes to the coronavirus situation even more effectively – the whole team did a huge amount of work! This also reflected by our success in the 2020 financial year, when we processed more requests than ever before.
What digital services does MünchenerHyp already provide?
We provide our B2B brokerage partners with mostly electronic channels, and are continuously expanding them. This applies from the submission of new loan requests and the sending of documents to the handling of portfolio services, such as automated online renewal via agree21.
For improved customer dialogue, we launched a project for the web portal meindarlehen.de in 2019. We provided an online dialogue on the key topics of private property financing here before the start of the pandemic. Given our customers’ increased levels of online activity during the coronavirus crisis, the new self-service proved its worth very quickly. Internal loan processing benefits from digitalisation of the customer interface, as the orders sent digitally via the customer portal automatically go into the bank's electronic customer files.
We also have digital solutions for the further internal processing of these requests and for the above-mentioned renewal. In the lending process, we use an automated workflow with validation components that can check the requests in terms of functional and technical completeness, plausibility and correctness. Ideally, this procedure results in an immediate acceptance, enabling the intermediary bank to pass on the loan agreement to the customer in just a few minutes.
What would you like to get even better at in terms of digitalisation? What digital services are in the planning stage?
One focal point is our core processes in the lending business. We want and need to digitalise them further so that we can continue to act as an attractive provider of products for our brokerage partners and customers. For instance, for the retail business, we have set up a strategic programme aimed at end-to-end business process optimisation. As well as expanding digital customer dialogue, we intend to digitalise further services that provide direct added value for our customers and partners. These include loan-commitment, portfolio and disbursement processes.
In addition, we are working on the future viability of our core banking system and the associated switch to SAP4-Hana. Above and beyond the technical migration, we are systematically looking into the opportunities that can arise here for further improvement of core business processes and management processes.
How do you think the importance of digitalisation to banks will progress in the future? Where is the journey heading?
Digitalisation of the finance industry is a dynamic process that only just starting to gather pace. Technological innovations are opening the doors to new services, products and market participants at tremendous speed. In this environment, we see the need to position ourselves clearly and focus on our core skills. Amid all the technological advances, we still see the need for personal interaction in our line of business as a real-estate bank.
In the private customer business in particular, customers bear what is for them a major financial risk, as it is usually the biggest financial decision of their life. Therefore, to a certain extent, success will depend on personal advice and trust. The form this trust and interaction take and the way in which we are integrated as a product supplier are changing significantly. Digitalisation is crucial to success in this line of business. Platform business will continue to grow, at the expense of conventional branched-based sales. There is also a possibility that totally new platforms may penetrate the market in the future. So banks have to adapt their IT architecture, meet organisational and structural requirements and respond reliably, quickly and flexibly in the interest of customer orientation.