By introducing process automation, The Mauritius Commercial Bank was able to streamline its processes and significantly improve overall efficiency.

A big hurdle for the banking industry when competing with fintech start-ups is its inability to achieve operational efficiencies in its back-end processes, which in turn constrains the level of front-end system enhancements that can be made to improve customer experience. Robotic Process Automation (RPA) empowers banks to rapidly automate their business operations and help achieve their digital transformation goals.

RPA describes a software development toolkit that allows non-engineers to quickly create software robots (known commonly
as “bots”) to automate rules-driven business processes. At the core, an RPA system imitates human interventions interacting with internal IT systems. It is an application that can integrate easily with the existing IT setup and deliver productivity by automating mundane tasks allowing the company’s workforce to focus on more value-adding jobs.

The RPA revolution in banking can be compared to robotics in manufacturing and how it has disrupted the entire manufacturing industry. While RPA started mainly as a back office-focused automation technology, over the years, banks have successfully used RPA to automate middle-office and front-office operations. RPA provides significant improvements in the accuracy and processing time with increased productivity in transaction processing.

The Mauritius Commercial Bank Limited (MCB), a subsidiary and the mainstay of MCB Group Ltd, is a leading and the longest-standing banking institution in Mauritius. MCB expanded its business into non-banking financial services to diversify its market reach and is now considered a benchmark player in this sector. MCB Capital Markets Ltd and its specialty-driven subsidiaries offer a comprehensive range of investor services. MCB also offers leasing, factoring, and microfinance solutions.

Additionally, MCB is  actively pursuing its market development drive based on its ‘Bank of Banks’ strategy, positioning itself as a regional focal point for handling trade finance, payments, and card operations outsourcing.

To that end, the bank wanted to embark upon a process automation exercise to enable automatic renewal of overdraft facilities for individual customers, thereby improving overall productivity.

Project and Solution Overview

The monthly renewal of the overdraft facilities process took 1.4 hours per request (at a volume of 5,500 submissions) across the value chain. Since the last Core Banking System migration in 2010, the renewal of the overdraft facilities process was considered very cumbersome by account officers, resulting in a substantial backlog, loss of revenue, missed opportunities and poor monitoring of the overall credit profile of customers.

The scope of the project was hence identified as:

1. Renewal of unsecured overdraft facilities
2. Renewal of overdraft facilities with cash collaterals
3. Renewal of secured overdraft facilities

Implementation Process

The new solution was planned to be implemented in the Retail, Private Banking & Wealth Management and Credit Management business units of the bank. The project team included business process analysts, the change management office of the MCB Digital Factory, and project champions from all relevant business units.

The project was developed in an agile mode to enable employees to adapt to the new way of handling RPA processes. Agile practices such as Test and Learn and Re-usability of developed tools were rigorously applied.

The prevailing monthly account behaviour of the customer was used to determine the appropriate score. A double verification between IBM Cognos and SharePoint was also done to avoid the duplicate upload of the same records from one month to the other. The results were then appended to the monthly volume of Overdrafts to be renewed to smooth the Account Officer’s workload, thus helping them adapt to the new concept of RPA.

Challenges were resolved by empowering stakeholders through several extensive workshops and simulations, thereby enhancing employee experience. With the help of the Change Management Office of the MCB Digital Factory and project champions across business units, the bank provided guidance and a learning path to end users, thus furthering continuous learning.

Benefits Achieved

• The bank achieved numerous benefits as a result of this implementation:
• Extraction of customers’ information developed on IBM Cognos, helping in data analysis, scenario exploration, and decision-making.
• Development of scoring rules using Microsoft VBA for the categorisation of customers into Green, Orange and Red to facilitate decision-making by account officers.
• Automating computer operations and developing user-defined functions
• Generating emails using RPA to request CEs to download customers’ credit profiles from MCIB, helping to plan the email strategy, reducing potential errors, and targeting particular segments of customers
• Parsing MCIB data for transferring data into and out of software instead of developing APIs which could take more time.
• Upload of details on SharePoint of overdrafts to be renewed for onward capture of final decisions by account officers, resulting in productivity gains without experiencing corresponding cost increases.
• Improved customer service by lowering the burden of administrative tasks, enabling staff to prioritise jobs that influence customer interactions.
• Increased monitoring of customers’ overall credit profile, minimising the bank’s risk exposure and providing additional opportunities for new sales.
• As of June 2022, other benefits include:
• 4,436 Full Time Equivalent (FTE) hours gained,  representing MUR 3.7M (USD 82.2K) in terms of process efficiency.
• Expected annual revenues (fees): MUR 3.3M (USD 74.1K).
• Expected annual process efficiency: FTE hours of 5782, equivalent to MUR 3.7M (USD 88.8K).
• Clearance of a backlog of 7,000 overdrafts.

Conclusion

The Mauritius Commercial Bank launched all three phases of the solution detailed in the scope. Automating several processes helps bank personnel and customers but also decreases the risk of error when dealing with large volumes of data.

The benefits gained from the implementation will also keep the bank firmly on the path of utilising technology to innovate and strengthen its position of being the leading banking institution in Mauritius.