Improving Transaction Processing & Support

Category: Banking.

In order for banks and financial institutions to improve their organizations as a whole, they need to focus on improving their transaction processing and support. Transaction processing is a type of computer processing that indicates the bank needs to immediately respond to a customer’s request. Each request is considered a transaction. A good example of transaction processing in a bank is automatic teller machines.

Transaction processing is critical to the operations of any bank and it’s crucial in determining customer satisfaction. Transaction processing is comprised of the following:

  • Micro-account management systems
  • The management of seizures by a bailiff
  • Cheque management
  • Credit card transaction processing
  • Money order management
  • Bank cash management
  • The management of corporate clients’ cash payments

A bank that can analyze and make adjustments in real-time based on the data provided is able to differentiate itself from competitors and offer superior products and customer experience. However, many databases and services have difficulty collecting real-time data, analytics, and transactions, and they often break down as a result. To meet evolving business and customer demands, organizations need the capabilities of instantaneous analysis and automated responses.

Moving Towards The Next Generation Of Transaction Processing And Support With Real-Time Processing

In transaction processing and support, a real-time database refers to a database system that has the capacity to support real-time processing. With real-time processing, transaction requests can be acted upon immediately. In a practical sense, real-time processing implies that when you go to the ATM machine or apply for a home loan, you will not have to wait until later to get a response. The system you are using will give you the response of the transaction right away.

Real-time processing is a good example of the practical application of machine learning in financial services. Processes such as processing data on the basis of defined parameters, input file management, preparing files for other internal banking systems, and reporting are also part of transaction processing. Adopting real-time transaction processing guarantees efficiency and effectiveness in the aforementioned processes.

According to the report of the RTI, a research and financial services organization, real-time processing will bring about faster and more intelligent decision-making. It will also assist with fraud monitoring, dynamic portfolio analysis, protection from cyber threats, and regulatory compliance.

Real-time transaction processing improves the performance of a bank through the following ways:

Better Risk Management

Real-time transaction processing and support enables a bank to be able to manage risk more effectively. This is particularly important to meet with regulatory requirements to avoid any legal issues. It is vital that a financial services organization is able to evaluate and manage the risk of customers’ portfolios for regulatory reasons. This demands a move to real-time transaction processing, to quickly assess any risk or issues in a portfolio or request.

Building A Data Culture

Real-time transaction processing and support makes real-time data default in a financial institution. Therefore, the organization will be able to manage risks consistently, thereby making compliance with regulations stress-free. The company will be able to offer the best possible services and support to its customers. In order to be able to achieve compliance with regulations while simultaneously satisfying customers, financial institutions will have to move to having a “data culture” across all functions. This culture must be implemented at all levels thereby spurring even closer involvement with live data without fuss.

Improved Customer Experience

Ultimately, real-time transaction processes will enable a bank to improve the experience of its customers. The way customers of a bank interact with the bank takes a new dimension with real-time processing. When real-time data becomes the norm, various aspects of the services of the bank will significantly improve. Interactions and transactions such as the use of credit cards and management of investment portfolios will improve significantly.

Therefore, customer experience will improve, which bodes well for both the reputation and revenue that the financial institution brings in.

It is possible for a bank to evaluate the effectiveness of its Transaction Processing & Support group by using the following metrics:

  • Unit Cost of ATM Deposits: This can be derived by dividing the total cost of processing ATM deposits by the total number of processed ATM deposits over the same period of time.
  • Unit Cost of Standing Order: This can be calculated through the division of the total cost of standing orders processed by the total number of processed standing orders over the same period of time
  • Cycle Time of ATM Deposits: This is the number of minutes needed to process an ATM deposit from the time of receiving the ATM deposit until when it has been processed.

    Objective: Improve Real-Time Transaction Processing

  • KR1: Decrease cycle time of ATM deposits from 1minute to 30 seconds
  • KR2: Establish a real-time risk management process
  • KR3: Hold 5 informational sessions on data culture

Based on the benefits of real-time transaction processing, you can use OKRs to help improve and better your organization. If a specific department wanted to track the progress and effectiveness of the organization’s processing, they may develop the OKR “Improve Real-Time Transaction Processing.” Because of the connection between real-time processing and the customer experience, a processing OKR could align with a corporate OKR to “Improve Customer Experience”


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