Doubling HSBC’s mortgage processing capacity

HSBC
When planning a new marketing campaign which aimed to double the demand for new mortgages in Australia, HSBC had an urgent need to improve efficiency in their back-office operations. Open Orbit was the answer.
The background

HSBC’s Australian business was planning a new campaign in the mortgage market aimed at capturing share. It was expected that this campaign would double the volume of loan applications received on any given day. For home loans in particular, time is of the essence when handling an application. Delays and mistakes in this process leads to loss of customer confidence, and sometimes, loss of a customer’s business.

Management was aware of existing bottlenecks in parts of the process, specifically with preparation of documents. In the absence of adequate capacity and agility in responding to customers, the market opportunity would not get fully captured, and brand reputation could get adversely affected. Promoting a new product and not having the ability to service the demand, was simply not an option. What’s more, timelines did not allow for deployment of additional staff as a way of increasing capacity. It would have taken too long to hire and train new staff.

The challenge

HSBC needed to double its processing capacity in under 4 months, something that had never been attempted before, leave alone successfully.

What’s more – projects of this kind are usually expected to take about 7 to 8 months, with about half the time spent in analysing what’s wrong, and the rest being spent on fixing it.

The team in HSBC decided to engage with the most advanced technology on the market to tackle this knotty problem: Open Orbit’s diagnostic tools and symptom-cause-remedy algorithm.

The solution

The current method of processing mortgage applications was analysed using a technique called “happy path of hand-offs” which helps focus attention on a few critical factors that can make all the difference in responding to customers in a timely manner.

Open Orbit provided HSBC with a “GPS for solving process optimisation problems”. This diagnostic feature was used to prepare a credible hypothesis by traversing through the landscape of symptoms, causes and remedies. With this, the team could rapidly identify some key improvements that would reduce rework, eliminate non-value-adding work and reduce cycle times.

The project team conducted workshops with subject matter experts from the business. They framed the results on the Open Orbit platform to create a succinct picture of what was going wrong, where, what could be done about it, and how success would get measured.

The result:

Analysis was completed in 4 weeks instead of the usual 3 to 4 months. The team moved rapidly to implement a small number of pivotal changes to the mortgage platform and to staff training. And the changes suggested by Open Orbit’s platform resulted in HSBC doubling the capacity of the process. The campaign was successfully deployed to market – and the results exceeded expectation in large part due to the efficiency of back-office operations.

Open Orbit firstly helped HSBC to identify the few pivotal changes that could make all the difference. It also simplified communication and articulation of the problem and the solution to a diverse range of stakeholders. This was of immense benefit in ensuring that barriers to change were broken down, and the changes were well understood and accepted by the business.

What’s more, the algorithm helped avoid costly diversions into areas that would not have helped. For example, the business had a history of issues caused by complex and numerous templates used for generating customer communication. While this problem was genuine enough, in this instance it would not have helped with the immediate issue of inadequate processing capacity. Without this clarity, the team would have invested in solving for the complexity of templates, only to find that capacity was still inadequate.

The platform allowed HSBC to distill learnings from the project into standardised ways of re-use and sharing across teams. As staff use Open Orbit’s diagnostic features, they also automatically create reusable corporate memory of what works and why.

The final outcome:

The initial project was so successful that HSBC is replicating the use of Open Orbit across other businesses, and doing so more rapidly than would have been the case with traditional knowledge management methods which rely on knowledge workers investing significant effort in harvesting and documenting their knowledge and proactively sharing it. Open Orbit automatically captures the digital footprints of the thinking process that was used to solve a given problem, and makes it accessible to anyone else on the team who is authorised to do so.

While this case was specific to mortgage lending, the algorithm handles situations in a wide range of industries, processes and business objectives.

I

Hear from Ben Tabell, Head of Operations at HSBC Australia

“We were captivated by how the algorithm took a few simple inputs and guided us on the various factors to look into..”

“Beyond just solving problems faster, this gives us repeatability across the organisation..”

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