Royal Bank of Canada has teamed up with leading financial technology provider D+H to implement Barometer, a first-in-class solution crafted to set a new standard in lending oversight. RBC’s Mike Dobbins and D+H’s Duncan Hannay discuss the Barometer solution with Douglas Blakey
When RBC discusses optimising its already prudent risk culture, the rest of the industry needs to take note. RBC has worked with Toronto-headquartered financial technology provider D+H for many a year on many a project but the Barometer project deserves special attention.
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Barometer, in a nutshell, is lending simulation, the first of its kind, designed to enable lenders to optimise the capability of their back-end underwriters in order to improve the quality of the lender.
Mike Dobbins head, strategy and corporate development at RBC tells RBI that RBC began working with D+H in 2015 to develop a tool specifically designed to provide insight into how well employees understand and apply regulations and the bank’s policies.
The use of Barometer also creates another opportunity to continuously improve the RBC customer experience through improved assessment and training across lending operations.
This is no small scale pilot – already 500 RBC loan adjudicators are using Barometer within the bank’s Canadian Personal and Commercial business unit and plan to expand the Barometer roll out to other functions and regions later this year.
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By GlobalDataThe tool also allows RBC with an efficient and repeatable process for assessing workforce knowledge across its lending operation using a library of real-world business scenarios.
Says Dobbins: “We wanted something more real time. Managers can assign cases to loan officers to test their knowledge of certain regulations and internal policies. After analysing the results, RBC is able to target training on areas where it is needed most, ensuring that all employees are equally knowledgeable on the leading regulations and policies of the day.”
He adds that the bank had a successful, longstanding relationship with D+H.
“They have been great partners along the way.”
At the risk of stating the obvious, consistent, accurate decision-making is essential if banks are to improve loan quality, grow revenue and mitigate risk. That is easier said than done – it is often said that even leading retail banks find it complex, expensive and time-consuming to ensure their employees are up to speed with current bank strategy, the prevailing risk appetite and ever-changing regulations.
Duncan Hannay, president, global lending solutions at D+H tells RBI that Barometer is a configurable, SaaS (Software as a Service) single instance, multi-tenant product built on the Microsoft Azure platform.
Use of Barometer, says Hannay, empowers the bank to pinpoint and address inconsistencies in decision-making.
Adds Hannay: “use of a library of real-world scenarios to measure understanding generates the insight needed to make informed decisions on where to deploy resources to improve loan quality, increase profitability and reduce risk.
“The service also provides more security than other solutions – the Azure cloud grants more flexibility and scalability to the financial institution,” says Hannay.
Bankers can log into the service to access a multitude of real-world scenarios, kept consistently updated by D+H, and the service can be configured by the financial institution so that the training is focused on the relevant areas.
Dobbins concludes: “We are the first bank to go live commercially with Barometer. It really does have a lot of feature functionality and is a very intuitive piece of software.
“Users can customise the software and it has a very user friendly, really nice feel to it. We will continue to expand this to other parts of the business and its use will continue to evolve in manual, non-systems based decision-making.
“We are very very happy with the results to date.”
BAROMETER HIGHLIGHTS
- Configurable solution to help financial institutions highlight knowledge gaps and pinpoint inconsistencies in decision-making individually and in aggregate, so they can focus training and resources on areas it is most needed;
- Users can log in securely from any browser to access a library of relevant real-world scenarios, regularly updated by D+H;
- Commercially available with two proprietary content modules; adjudication and front line/mobile sales have a growing library of content modules built on existing and emerging regulations and can be configured to a financial institution’s unique policies.
- Managers decide what to test and gain a detailed view into both individual and team performance across the most relevant and critical regulations facing the industry.
- Managers can access detailed reporting and analytics on employee performance.
- Provides compliance and risk officers with a historical repository of evidence, trending results from activities designed to reduce risk exposure and calibrate employee decision making.
