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7 Steps to Solve the Right Problems in Banking More Efficiently

Chris Nichols

The reality is bankers are fantastic problem solvers. It’s in their blood. The problem is that, as an industry, we leave much to be desired about DIAGNOSING the right problem. Present a challenge to a banker, and they will quickly switch to solution mode without first analyzing what the issues are. They don’t fully understand the “intent” of the customer and usually fail to understand the universe of solutions. This article presents the seven-step framework that we have found helpful in coaching banking teams in solving the right problem in the right way.

Highlighting Problem Diagnosis

The challenge of problem diagnosis is best summed up by the classic Harvard Business School case study “Slow Elevator Problem.” An 11-story hotel gets frequent complaints about its slow elevator. When asked, most managers quickly identify the solution as replacing the elevator, installing a stronger motor, adding another elevator, or upgrading the algorithms to preposition the elevator where people are predicted to be. Each solution is over $100,000 with a three-month minimum time to implement.

Each of the above solutions frames the problem as such: Elevator is slow, therefore find a way to increase the speed of the elevator.

After brainstorming, the hotel owners came up with a different solution – Install mirrors next to the elevator on each floor. People will lose track of time as they look at themselves. This solution costs $3,500 and took two days to install. The owners decide to try this first, and to their amazement, complaints were dramatically reduced.

This solution reframed the problem as the elevator is slow, waiting for an elevator is annoying, therefore let’s make the wait feel shorter.

While the mirror solution solved the problem, the brainstorming didn’t need to stop there. After looking at the complaint data, most of the complaints came around 11 am. Here, the problem is yet reframed again: too many people need the elevator at the same time around checkout. The solution: stagger the checkout to reduce peak load times. The cost of this solution was $800 to design a new system that could be implemented in 24 hours.

By reframing the problem, you arrive at a more efficient solution set.

problem solving examples in banking

Exploring Solution Sets To Banking – The Chime Case Study

All the above solutions are correct; they may be correct for a different problem. Further, some solutions are more efficient than others. The exercise of reframing is to validate facts, challenge underlying assumptions and explore alternative solutions to the initially stated problem. Sometimes, after investigation, no real problem exists as it is a perception problem or problems are multicausal and need to be addressed in a multitude of ways.

The core point here is that you don’t fully understand a problem until you spend time understanding what the issues are. The wisdom is supported by the famous Einstein quote when he is reported as saying – “If I only had one hour to solve a problem, I would spend 55 minutes defining the problem and then take five minutes to solve it.”

Reframing the problem was just successfully executed by Chime to make banks look foolish. The recurring complaint that we all get is that our overdraft fees are too much. Upon trying to solve this, many banks reduced their overdraft fees from $45 to $30. However, at the start of the year, Chime asked – Why are customers over-drafting their account? While there were multiple reasons, one major one, supported by the data, is that most overdrafts came right before the pay period, and the customers needed a bridge to their paycheck.

This was a solution at several innovative banks as they introduced the “emergency line of credit” to reduce overdrafts. This worked to some extent. However, Chime took it a step further and concluded, if we know the customer is going to get paid, why not give them their paycheck ahead of time? The problem wasn’t that the customer didn’t have enough money; the issue was that the customer’s pay periods and expense periods didn’t line up. Chime recently introduced their “Get paid early” attribute that makes direct deposits available two days early. That attribute not only helped solve part of the problem but is responsible for a considerable number of new customers, thereby dropping customer acquisition costs.

The 7 Step Framework for Reframing Banking Problems

Educate the team : Step one is to educate the team on problem reframing. If you don’t, the knee-jerk reactidon is that you are wasting time solving the wrong problem, and then you don’t get the participation you need. It is natural for us to want to solve problems, but this framework is to fight that urge and spend the first portion of the time understanding the problem.

problem solving examples in banking

Strive for diversity, including third parties :  The need for diversity recently came to light in 2020 in Karlskoga, Sweden, when the town council wanted to reduce the number of injuries related to snowfalls. The town council, composed of men, voted to move snow clearing earlier and increase the number of snowplows on secondary streets. Their experience led to the framing of the problem as injuries from overnight snowfall occurred as citizens walked to work on roads. The injury rate persisted.

It took a woman, the wife of a council member, to point out that the data showed that 69% of the injuries were women not during commute times but right after people walked into town and spouses took kids to school. Instead of adding more expensive snowplows to clear roads earlier, the more efficient solution was to prioritize the clearing of sidewalks into town before plowing the secondary streets. This cheaper solution proved successful at reducing injuries.

In order to limit biases and gain a new perspective, it helps to brainstorm problems with a more diverse group. In banking, we see this issue almost every day when managers, those often farthest from the customer, attempt to solve problems for the customer. Any problem-solving group should be diverse as to position, race, gender, and orientation. Further, third parties such as vendors, regulators, customers, and other outsiders should be included as they can bring an additional perspective.

Go Broad, Then Deep : When brainstorming possible solutions, there is a natural inclination to delve into details of either a proposed definition of the problem or solutions. It is incumbent upon the facilitator to keep asking the question – “What else is missing?”

Brainstorm about improving your bank’s stock price, and you will get a bunch of ideas about generating more fee income, getting more customers, and making more loans. After about the fifth “What else is missing” question, you will get to items about better investor relations, more press releases, and creating more bank stock liquidity.

problem solving examples in banking

Commit in Writing: In order to avoid group-think and influence, start a problem-solving session with a pre-meeting task of sending an email with a paragraph, not a bullet point of defining the problem. This allows people to speak more freely, prevents opinions from being influenced, and eliminates getting “target lock” on one definition. Further, require all employees to write in the first person to aid in accountability.

A bank recently learned this lesson when they started to brainstorm how to be more innovative. Managers sat around saying, “Our employees are not motivated to innovate,” and “our people don’t have the right skills.” If the meeting facilitator stopped collecting the data, the wrong conclusions would have been reached, leading to the wrong solutions. Upon surveying the employees, you received comments such as “I am not empowered to effect change,” “I don’t have a mechanism for providing new ideas,” and “Every time I make a new suggestion, nothing happens.”

The first-person perspective carries more weight. This problem becomes even more acute when bankers try to speak for the customer. If the customer view is important to the problem (and it should be), then be sure to get customer input. This also speaks to a gathering a diversity of views.

Getting input in writing allows more of an unfiltered view and allows the critical nuance of the problem to be captured.

Expand Participant’s Views: Another pre-meeting exercise is to ask people to come to the problem definition meeting with an opinion on the following topics:

  • Is this an incentive problem?
  • Is this an expectations problem?
  • What role does training play in the problem?
  • Is this a problem in our process?
  • How can technology help?
  • How can education help?
  • What data is needed to better understand the problem?

A bank rolled out a new digital account opening platform only to find customers were still complaining about the time it took to open an account. The bank calculated that it would take less than five minutes to open a new account, but customers complained that it was taking more than 20. After looking into the issue, the problem was that the bank didn’t tell the customers what documents would be required until they already started the process. By moving the education piece to before the customer started the process, processing times, and complaints were dramatically reduced.

By asking the above standard questions before the meeting, participants will be prompted to think along other avenues.

Include the positive, not just the negative: During the problem analysis phase, it is always instructive to break down the instance where the problem didn’t occur. Analyzing what works can help uncover factors that might be missing in the negative case, where the problem occurred.

A bank recently wanted to know why they felt they were never going anywhere with their strategic plan. After defining the problem and looking at those initiatives that worked right, one common factor was that there was a full-time project manager assigned to the successful task. Initiatives often languished at the bank when line operators, those with a full workload already from “day jobs,” took on additional projects. By looking at the successes, the bank was able to solve the problem.

Clarify each participant’s objectives when solving the problem: While all parties in the room may want the problem solved, each party may want the problem solved for different reasons. In some cases, the reason doesn’t matter, but in some cases, it does. While many bankers want online lending, the banker that wants to reduce cost will reach a different solution set than the banker that wants to improve the customer experience. Before challenging anyone’s objectives, first, seek to understand. Question the various factions about their perception of the problem and what should be the objectives of what a solution looks like.

Putting This Into Action

The next time your bank attempts to solve a problem, step back and work on defining the problem first. As Peter Drucker used to say, “There is nothing more dangerous than the right answer to the wrong question.”

Validate the underlying assumptions, gather data, and then practice reframing the problem. Reframing problems take a heavy dose of creativity which is the same muscle many banks need to build to increase their rate of innovation. Practice defining and reframing problems, and you will find that innovative solutions start to come a whole lot easier.

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Money Basics  - Financial Problem Solving Strategies

Money basics  -, financial problem solving strategies, money basics financial problem solving strategies.

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Money Basics: Financial Problem Solving Strategies

Lesson 2: financial problem solving strategies.

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Financial problem-solving strategies

person carrying heavy weight with dollar sign

Have you ever experienced a financial problem? Do you feel like finances are holding you back from reaching your goals? This lesson will give a brief overview of the general problem-solving process and how to apply it to the most common financial problems.

The problem-solving process

First, let's take a look at a general problem-solving process that you can apply to any situation, not just a financial one.

  • Identify the problem . The first step in solving a problem is to identify it. What exactly do you need to overcome?
  • Make a plan. What are the steps you need to take in order to overcome the problem?
  • Implement the plan . This step actually puts the plan you created in place. While it sounds fairly straightforward, this is usually the most difficult step.
  • Evaluate the plan . Although this is listed last, this step might actually occur simultaneously with implementing the plan. Things happen and circumstances change, so you may need to re-evaluate your plan as it is happening.

Identifying the problem

credit report with low credit score of 360

The first step in the problem-solving process is to get to the root of the problem and understand what you need to overcome. Here is a list of the most common financial problems people may face:

  • Lack of income/job loss
  • Unexpected expenses
  • Too much debt
  • Need for financial independence
  • Overspending or lack of budget
  • Lack of savings

When thinking about these common problems, each one falls into one of three areas: You need more money, you need to reduce your debt, or you need to change how you spend.

Making a plan

After identifying the problem you need to overcome, it's time to make a plan. Not sure where to start? No worries! We have you covered with some tips and places to begin.

Problem 1: You need more money . Whether you've lost your job, met an unexpected expense, or are working on becoming more financially independent, a form of income is necessary.

If you are a looking for additional work or maybe just a better-paying job, take some time to update your resume and cover letter. Make sure they are neat, up to date with your most current information, and free of spelling and grammar errors.

Be wary of any advertisements or jobs that offer fast, easy money. A lot of quick-cash methods come with unintended consequences. More often than not, if something sounds too good to be true, it probably is.

Problem 2: You need to reduce your debt . With high interest rates or the need to live paycheck to paycheck, high debt can be debilitating. Sometimes it feels like climbing a neverending mountain with an invisible peak. However, by prioritizing and negotiating your debt, you can make it more manageable.

Try listing all of your debt and the interest rates associated with each. Focus on paying off the ones with the highest interest rates first. If you're having trouble making payments, call the loan company and see if it can offer any solutions for you. The company may be able to lower your interest rate or offer a temporary forbearance to help you get back on your feet. If you need more help tackling your debt, you may want to contact a professional debt counselor like Consolidated Credit.

Problem 3: You need to change how you spend . Going from financial problems to a healthy financial status often requires organization and a shift in thinking. Avoiding overspending, building your savings, and gaining financial independence can often be accomplished with good spending habits.

The first thing you may want to try is creating a budget. There are many templates and resources available to help you create one. Sticking to one can be challenging, but simply having a budget laid out can help you see where you need to start spending less.

In addition to your budget, create a savings plan. Start out small. Even stowing away an extra dollar or two here and there can make a big difference. Also, try placing your savings in a place you cannot easily access. For example, create a savings account at a bank you don't usually use. The more difficult it is to access your money, the less likely you are to spend it.

Implementing the plan

person on ladder climbing to metaphorical financial security

Although the explanation of this part is the simplest, this is often the most difficult part to actually execute. It requires self-discipline and perseverance. The most important part of this step is to know that if your plan doesn't work or if you have a difficult time sticking to it, all is not lost. If it happens, move on to the next step, evaluate your plan, then repeat the process.

Overcoming financial obstacles can require changing your lifestyle, and this does not happen overnight. However, just having a plan itself can help to give you confidence and reassurance that you can eventually overcome whatever is in your way.

Evaluating your plan

As you implement your plan, you'll need to continually evaluate it. Maybe something happens and your original plan needs to change. Perhaps you've learned more along the way and realize that your original plan was incomplete. Or maybe your first plan went as planned and was a success. No matter the circumstances, it is always a good idea to look back and re-evaluate. Try answering these questions:

  • Was your problem solved? Did a new problem arise?
  • What went right?
  • What went wrong?
  • What circumstances changed?
  • Was there anything you didn't account for?
  • What was easy about implementing your plan?
  • What was difficult about implementing your plan?

Financial obstacles can often seem debilitating and impossible to overcome. They often create a significant source of financial anxiety . We hope this lesson will help give you the confidence to take on your problem one step at a time so you can conquer your anxiety and move forward.

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How to Solve Real-Life Problems of Bank Reconciliations (With Examples)

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Key Takeaways

  • Understand the significance of the bank reconciliation process in identifying inconsistencies in day-to-day transactions
  • Take a look at a few real-life examples of bank reconciliation statements and the challenges faced by organizations during the reconciliation process, including delays in processing cash and other manual errors
  • Learn how you can efficiently leverage artificial intelligence in bank reconciliation to reduce errors and make the process faster and more accurate

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Introduction

In the bank reconciliation process, the transactions recorded in the company’s electronic bank statements (EBS) or electronic cash book are compared with its e-passbook or digital passbook cash book are compared with the bank’s passbook to identify any inconsistencies in the day-to-day transactions. In this simple process of tallying the cash book and bank statement, there could be multiple errors. These errors or bank reconciliation problems might differ based on the size of the organization.

In this blog, we will introduce you to some real-life bank reconciliation examples as well as the major roadblocks faced by organizations while reconciling their bank statements .

What Is a Bank Reconciliation Statement?

A bank reconciliation statement is a financial statement that compares a company’s bank account balance with its own accounting records. Its purpose is to identify and reconcile any differences between the two balances. This statement helps ensure accuracy and consistency in financial records.

4 common illustrations of bank reconciliation statements

Before deep diving into the practical examples of bank reconciliation statements, let’s go through a few terminologies which are used in a recurring way while explaining the examples:

1. Cash Book Balance More Than Bank

ABC Corp, has a balance of $2000 as per passbook as on 31st march 2021. However, the balance as per cash book as on 31st march 2021 is  $2210.

Let’s Understand the Transaction Details

  • A check of $500 was deposited, but it is not yet processed by the bank.
  • Bank charges of $60 were recorded in the passbook, but not in the cash book.
  • Checks worth $300 were issued, but not presented.
  • Bank interest of $50 was recorded in the passbook, but not in the cash book.

Bank Reconciliation Statement(BRS) Format

Bank reconciliation statement for the above transactional details

2. Cash Book Balance More Than Bank

JPN & Co, has a balance of $20,000 as per passbook as on 31st march 2021.

Let’s Understand the  Transaction Details

  • Three checks of $1000, $1500, $1750 were deposited in the bank on 30th December 2021 but were recorded in the bank statement on January 2022.
  • A check of $1000 was issued on 31st december 2021, was not processed.
  • A dividend of $500 on stocks was credited to the bank account, but not recorded in the cash book.
  •  A direct deposit of $600 was made in a bank account by a customer, which was not recorded in the cash book.
  • Bank charges of $60 were entered only in the bank passbook.
  • Balance as per cash book on 31st december 2021 was $22,210.

Bank Reconciliation Statement (BRS) Format

Bank reconciliation statement for the above transactional details

3. Bank Balance More Than Cash Book

Markson’s & co. has a difference in balance as per cash book and bank statement as on 31st March 2021.

  • Balance as per bank statement as on 31st March 2021 is $5000. Balance as per the cash book is $1,650.
  • Checks of $2000 and $1000 issued as on 30th March 2021, but not yet cleared.
  • Insurance paid by the bank is $200. It is not yet recorded in the cash book.
  • An outgoing check of $1000 was recorded twice in the cash book. It is accurately recorded in the bank passbook.
  • Payment of a $500 check is recorded twice in the passbook.
  • Dividends received $600 recorded only in the bank statement and not in the cash book.
  • A check of $500 was deposited on 29th March 2021, but it is not collected.
  • Bank charges of $50 were debited, it is only recorded in the bank passbook.

Bank reconciliation statement for the above transactional details

4. Cash Book Balance More Than Bank

Rutherford Inc. has  a difference in the balance as on 31st March 2021 between the bank statement and cash book.

Let’s Understand the Transaction Details:

Cash Book (March 2021) for Rutherford Inc:

Transactional details

Bank statement (March 2021) for Rutherford Inc:

Transactional details

The balance transactions would appear in the bank reconciliation statement:

Bank reconciliation statement for the above transactional details

Challenges Faced While Preparing Bank Reconciliation Statements

Businesses can gain a variety of advantages from effective reconciliation processes. Without good reconciliation, it is difficult determining which expected payments haven’t been made. In addition to detecting fraud, cash book and bank reconciliation statements allow you to quickly identify any potential disruptions in your cash flow.

Effective bank reconciliation process offers various advantages to businesses. It allows businesses to identify any expected payments that haven’t been made, and detect fraud. Bank reconciliation can also help businesses quickly identify any disruptions in their cash flow.

However, even today, the bank reconciliation process is highly manual in nature. The accountants are responsible for manually comparing the digital passbook and e-cash book to prepare bank reconciliation statements. Additionally, sometimes due to the delay in cash being processed in the bank, there is a difference between the passbook and the cash book. This might lead to multiple errors or inconsistencies in the bank reconciliation statement. Let us explore the various problems in bank reconciliation process and real-life examples of errors in bank reconciliation:

In case of electronic fund transfers such as wire transfers, ACH, and credit card payments, the cash is not immediately reflected in the bank, which leads to a difference in the passbook as compaACH, wire transferred to the cash book.

This is a predominant issue which leads to multiple errors in bank reconciliation statements. If there is a delay in checks getting deposited or being processed, the balance on the passbook would not match the cash book balance.

As discussed earlier, bank reconciliation is a highly manual process. The accountants might enter incorrect transaction details or not add the bank fees or interest details mistakenly. These human errors might lead to problems in the bank reconciliation process and eventually the statement.

How to Solve Real-Life Problems of Bank Reconciliations (With Examples)

Reduce Errors With Bank Reconciliation Solutions

Powered by AI/ML, bank reconciliation software make anomaly detection, variance analysis, and financial close task management easier for analysts. HighRadius’ Account Reconciliation Software accelerates the reconciliation process to achieve up to 90% of auto-certification of accounts every month.

It also enables the review of 100% balance sheet reconciliations before ledger close. Driven by artificial intelligence, the software transforms reconciliations from a reactive to proactive process by detecting anomalies, making it faster and accurate.

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What is a cash reconciliation solution?

A cash reconciliation solution is a tool that helps businesses match their financial records with bank statements, ensuring accuracy and preventing errors. It saves time and reduces financial discrepancies. By automating the reconciliation process, it streamlines financial management.

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Banking Vertical Header

Is Design Thinking the new DNA of the Banking Sector? Design Thinking has been successfully used to create new value and solve complex problems in Banking by corporations such as Bank of America, BBVA, Citibank and Capital One.

Design thinking has become increasingly popular in the banking industry as banks look to improve their customer experience and stay competitive in a rapidly changing market. Design thinking is a human-centered approach to problem-solving that emphasizes empathy, collaboration, and experimentation. It involves understanding customer needs, generating ideas, prototyping solutions, and testing them in the real world.

There have been both successes and failures in the application of design thinking in banking. Some banks have successfully used design thinking to develop innovative products and services that meet the changing needs of their customers. For example, BBVA Bank in Spain used design thinking to develop its mobile banking app, which has been highly successful in attracting and retaining customers. The app is user-friendly, intuitive, and personalized, providing customers with a seamless banking experience.

Other banks have struggled to implement design thinking successfully. Some have failed to fully embrace the customer-centric approach of design thinking and have instead focused on internal processes and systems. As a result, they have developed products and services that do not meet the needs of their customers. Other banks have found it challenging to overcome organizational barriers and cultural resistance to change, which has hindered the implementation of design thinking initiatives.

Design thinking has the potential to transform the banking industry by improving the customer experience and developing innovative solutions to complex problems. While some banks have successfully implemented design thinking, others have struggled to achieve success. However, the increasing adoption of design thinking in banking suggests that it is a valuable approach that will continue to drive innovation and customer satisfaction in the industry.

Read case studies about the use of Design Thinking in Banking by these and other corporations. Read about their involvement with design thinking and the kinds of problems that have been tackled through the case studies and other articles about the use of design thinking in banking:

Design Thinking for Business Success: Design Thinking for Innovation

Design Thinking helps businesses to create user-centric products and services by discovering insights into user needs, applying these insights to their business model and generating innovative ideas.

In this five-part series, Sarah Dickins gives advice on how Design Thinking techniques can help you to orientate your product development around user need.

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Société Générale's Time Tracking Nightmare Solved

In 2017, employees, managers, and partners of Société Générale Global Solution Centre agreed that invoices based on time tracking and project allocation were a chronic and painful challenge.

At SG-GSC, customers were billed for the time each assigned employee worked. The process of collecting the time worked by those employees (HCC) was a complicated and difficult ordeal. It consumed 21 days per month for senior employees. These employees had to navigate different systems, many types of contracts, high staff mobility, and a variety of processes between business lines.

Co-designing OTP Bank’s Strategic Plan for Growth, The Design Thinking Society

This is an example of accelerating a transformation through co-design. Eighty-two professionals gathered, representing OTP’s whole organization. Together, they were able to achieve months of work in just three days.

OTP Bank Romania (OTP) was at a key turning point in late 2018. The organization was undergoing changes in its leadership team. This new team helped them develop an ambitious goal:

OTP Bank will double its market share in 5 years.

Design Thinking: The New DNA of the Banking Sector

The banking industry has become increasingly concerned over the challenge that emerging fintech startups pose to banks’ traditional ways of doing business and the threat that they present to revenue streams. In response, many banks have created internal innovation labs to counter these risks. “Design thinking” has become an important tool in the effort and is being used to explore how banks can boost their growth by applying the approach in a rapidly changing environment and an era of de-banking.

The Hottest New Trend in Banking

The hottest Trend in Banking is the use of Design Thinking to transform banking services.

How Capital One Convinced Teams to Use Design Thinking

If the one product you’re known for is ubiquitous, how can you stop your customers from leaving for other banks?

For Capital One, the answer was a small laboratory within the larger bank. The group leading this innovative push calls themselves  Capital One Labs , and their secret weapon is free coffee.

UXDA article, How to Implement Design Thinking in Banking.

Ever since it became clear that smart design led to the success of many products, companies have been employing it in other areas, from customer experiences, to strategy, to business ecosystems. But as design is used in increasingly complex contexts, a new hurdle has emerged: gaining acceptance (for the new solutions).

Empathy and Co-Creation in Capital Markets Operations by Amir Dotan

Co-creation and empathy are fundamental principles of design thinking that enable teams to collaborate and solve user problems at pace. Cross-functional collaboration and deep understanding of end-users help to break down barriers between organization silos, resulting in an aligned vision and more holistic, user-centered solutions. However, the geographically-dispersed nature of investment banks can make co-creation and empathy-building challenging.

Understanding the Value Of Design Thinking to Innovation in Banking by Claude Diderich, CAPCO Institute

Whether it is fintech, new regulations, or increasing customer demands, banks need to rethink the way they address wicked challenges related to designing and launching value-adding products and services that meet current and future customer needs. Design thinking has emerged as a highly effective and customer-centric method for solving these types of business problems.

It is based on observing customers in their natural environment, prototyping ideas, and validating them with real customers in an iterative way, working towards the best possible solution.

6 Tips for Prototyping Service Design Experiences by IDEO

Service design includes all the intangible aspects of how an organization seeks to build a relationship over time with its customers. And one goal of prototyping these service design experiences is to bring tangibility to these intangible experiences. Prototyping is such a powerful tool because you're organizing your service around the needs of the end consumer. Prototyping is important for determining what lands correctly and what’s missing. It’s a way to depict how the experience might play out over time and to gather feedback around that.

Customer Experience: The $14Bn Risk by Oliver Wyman

Digitization of Services, especially in the banking sector is creating enormous risk for traditional banks who have not placed the customer at the center of their customer service activities. In general customers of physical banks are not very happy with their banks, whereas those at digital banks are much happier. Herein lies the risk for traditional physical banks. This report offers some good analytical information.

Design Thinking: The New DNA of the Financial Sector by Oliver Wyman

How banks can boost their growth through design thinking in a de-banking era.

There is broad concern in the banking industry that an important share of revenues and the traditional ways of doing business are at risk due to the emergence of fintech startups that are challenging the established players. In the current economic environment, banks are looking to adapt and evolve their business models to meet these challenges and opportunities. Design Thinking is proving to be a useful tool that can help banks in their endeavors.

Bank of America Helps Customers Keep the Change with IDEO

How do you encourage new customers to open bank accounts? In 2004, Bank of America used the Design Thinking methodology to look at the problem from a human centered perspective when they assigned design agency IDEO to boost their enrollment numbers: a problem that at the time, lacked any user perspective on why it was so hard for customers to save.

Helping Hong Kong Embrace a Cashless Future​​​​​​​

How design thinking’s user-centric approach is helping Hong Kong embrace a cashless future.

The world is rapidly moving towards a cash-lite society with the continuing global spread of the coronavirus disease, Covid-19, helping to accelerate the demand for digital payment services.

Many people have been not only adopting social distancing measures during the pandemic, but also trying to avoid contact with people through the use of bank notes and coins by choosing digital payment methods or shopping online. Except in Hong Kong...

5 Simple Examples of Design Thinking

Banking operations for a customer-centric world

Nick Malik

Helps transform banks and non-banks across a broad range of topics to sustainably drive revenue growth and to enhance efficiency.

June 20, 2019 Today, deep within the headquarters and regional offices of banks, people do jobs that no customer ever sees but without which a bank could not function. Thousands of people handle the closing and fulfillment of loans, the processing of payments, and the resolution of customer disputes. They figure out when exceptions can be made for customer approvals and help the bank comply with money laundering rules, to name but a few.

In ten years, back-office operations will look starkly different. For starters, far fewer people will be needed. McKinsey estimates that 75 to 80 percent of transactional operations (e.g., general accounting operations, payments processing) and up to 40 percent of more strategic activities (e.g., financial controlling and reporting, financial planning and analysis, treasury) can be automated. Operations staff will have a very different set of tasks and thus will need different skills. Instead of processing transactions or compiling data, they will use technology to advise clients on the best financial options and products, do creative problem solving, and develop new products and services to enhance the customer experience. Banks, in other words, will look and feel a whole lot more like tech companies.

Features of transformed banking operations

Financial institutions need to do big picture, board-level thinking about how to prepare for the revolutionary impact digital technology will have on banking operations. With operations consuming 15 to 20 percent of a bank’s annual budget (Exhibit), transforming these functions will lead to significant improvements in profitability and return more capital to shareholders. It can also boost revenues by enabling banks to provide better products and services to customers .

problem solving examples in banking

Today, many bank processes are anchored to how banks have always done business—and often serve the needs of the bank more than the customer. Banks need to reverse this dynamic and make customer experience the starting point for process design. To do so, they need to understand what customers want, and how and when they want it. Instead of a major cost center, operations of the future will be a driver of innovation and customer experience.

Based on our work with major financial institutions around the world and from McKinsey Global Institute research on automation and the future of work, we see six defining characteristics of future banking operations.

Distinctive, personalized products and services

Today, banks offer standardized products hardcoded with specific benefits, parameters, and rules–30-year mortgages, travel rewards credit cards, savings accounts with minimum balances. A variety of operational roles are charged with supporting these products and managing the rules governing them. In future, these activities will be automated, and employee roles will shift toward product development. Instead of evaluating credit risks and deciding on mortgage approvals, operations staff will work with automated systems to enable a bank to offer its customers flexible and customized mortgages.

Imagine, for instance, a bank launching a new credit card in which the card member gets to define the rewards points they can obtain–perhaps 30 percent of rewards going to an airline, 30 percent as cash back, and 40 percent at a specific retailer. Or maybe a bank decides to offer loans that allow customers to specify their repayment plan and due dates. Today, these scenarios would be a nightmare for banks to orchestrate—each card or loan would almost require its own operations team. But soon, operations will use their knowledge of bank processes and systems to first develop customized products and then leverage technology to manage and deliver them.

Extensive use of automation and new technologies that empower the customer

Automation and artificial intelligence, already an important part of consumer banking, will penetrate operations far more deeply in the coming years, delivering benefits not only for a bank’s cost structure, but for its customers. Digitizing the loan-closing and fulfillment experience, for instance, will speed the process and give customers the flexibility and freedom to view and sign documents online or with their mobile app. Typically, US consumers have to wait at least a month to get approval for a mortgage—digitizing this process and automating approvals and processing would shrink wait time from days to minutes.

Same for call centers. Instead of waiting on hold or being pinballed between different representatives, customers could get instant, efficient automated customer service powered by advanced AI.

AI and advanced analytics could also improve dispute resolution. Customers can contact their bank any time through internet, mobile, or email channels and receive quick, real-time decisions. On the back end, systems would perform almost instant data evaluation about the dispute, surveying the customer’s history with the bank and leveraging historical dispute patterns to resolve the issue.

Seamless processes and consistent quality

Today, many operations employees perform dozens or even hundreds of similar tasks every day–reviewing customer disputes on credit or debit cards, processing or approving loans, making sure payments are processed properly, and so on. It’s not surprising errors happen. At some US banks, we have seen up to five to ten percent of all debit card disputes processed with errors.

Automating these and other processes will reduce human bias in decision-making and lower errors to almost zero. This will give operations employees time to help customers with complex, large, or sensitive issues that can’t be addressed through automation. And these employees will have the decision-making authority and skills quickly resolve customer issues.

Analytics-driven proactive management

The use of predictive analytics can dramatically improve the management of operations in several ways. First, it enables operations leaders to be more precise and accurate in their predictions. Instead of using simple arithmetic based on a limited number of variables to predict demand, demand predictions for specific products and services can be made based on granular profiles of customer segments and customer behavior using dozens or hundreds of variables. Banks can build detailed profiles from a multitude of data sets–including online interactions, geographic information from cell-phone usage, and aggregated payments behavior–and then apply analytics to predict the needs and desires of their customers—down to the level of a single individual in some cases.

Comprehensive data sets will also enable managers to set more KPIs. For example, instead of tracking just average handle times and customer satisfaction at a call center, banks could drill down to see how much time millennials or residents of a particular state spend on the phone with reps. If they spend longer than average, banks can determine why and, if needed, change how they communicate with these customers or adjust products or services to better serve them.

Finally, applying analytics to large amounts of customer data can transform issue resolution, bringing it to a deeply granular level and making it proactive not reactive. Instead of a bank addressing an error or customer problem only when it reaches a certain scale or frequency, software can find errors that happen to even just one customer, such as a fee that’s been miscalculated or a double payment to a credit card. The customer can then be alerted about the mistake and informed that it has already been corrected; this kind of preemptive outreach can dramatically boost customer satisfaction. Banks could also proactively reach out to customers whom predictive modeling indicates are likely to call with questions or issues. For instance, if a bank notices that its older customers have a tendency to call within the first week of opening an account or getting a new credit card, an AI customer service rep could reach out to check in.

Eliminating siloes for a simpler organization

Banks have always functioned with an organizational trinity: front offices (branches), middle offices (call centers), and back offices (operations). In the next ten years, this trinity will evolve dramatically. As we’ve already noted, back offices will slim down. Call centers will all but disappear due to AI bots and automation, and branches will be scaled down in number and transformed in function. As more customer transactions move to digital channels, front-line branch employees will operate as skilled personal advisors, helping customers get answers to complex questions that can’t be addressed digitally, giving advice about bank products and features, and generally serving as a one-stop-shop for customers in need across journeys. This is a new paradigm in which customers will receive personalized advice, relying on a simpler organization.

Talent as a differentiator: Going beyond the call of duty

Today’s operations employees are unlikely to recognize their future counterparts. Roles that previously toiled in obscurity and without interaction with customers will now be intensely focused on customer needs, doing critical outreach. They will also have tech, data, and user-experience backgrounds, and will include digital designers, customer service and experience experts, engineers, and data scientists. These highly paid individuals will focus on innovation and on developing technological approaches to improving in customer experience. They will also have deep knowledge of a bank’s systems and possess the empathy and communication skills needed to manage exceptions and offer “white glove” service to customers with complex problems.

Starting the transformation

To thrive in a world where once-siloed roles like loan closing and fulfillment, compliance, and risk management become an integral part of product development, product management, and customer experience, banks will need to make major organizational changes. They will need to rethink how the people who make the bank run are going to function. This calls for three major efforts:

Develop a plan to migrate to a journey-based organization : Today, functions such as call centers, payments processing, and risk underwriting are organized by product or segment. As banks increasingly focus on personalized interactions, a journey-based operating model will be required. With a journey-based model, banks will ensure operations resources own the customer inquiry or problem until it is solved. A journey-based model will integrate resources with different capabilities and knowledge and will cut across the currently established siloes. To do this, banks will need to re-think how they staff, measure, and track performance, and ultimately deliver to customers.

Design and implement a new talent model: Operations employees in 2030 will need to know how to code, develop products, and understand data, but they will also need the personal warmth and insight to manage exceptions and deal with complex customer problems. To attract this kind of talent, banks will need to expand their geographic footprints and identify talent pools with the required skills and attributes. They will need a new hiring approach to assess and hire talent for operations with different skills from those required today. Finally, banks will need training approaches to develop not only technical skills, but also empathy and the ability to impress customers in every single interaction.

Build a roadmap to accelerate digitization: Banks need to act now to develop an aggressive tactical roadmap that outlines the plan for digitization and automation. Banks that lack a clear long-term automation plan—one that will result in a fully digital operation a decade from now—will struggle to meet customer expectations.

The future will look very different for banks and their customers in 2030. Banks have a unique opportunity to lay the groundwork now to provide personalized, distinctive, and advice-focused value to customers.

problem solving examples in banking

Top 10 Banking Industry Challenges — And How You Can Overcome Them

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The banking industry is undergoing a radical shift, one driven by new competition from FinTechs, changing business models, mounting regulation and compliance pressures, and disruptive technologies.

The emergence of FinTech/non-bank startups is changing the competitive landscape in financial services, forcing traditional institutions to rethink the way they do business. As data breaches become prevalent and privacy concerns intensify, regulatory and compliance requirements become more restrictive as a result. And, if all of that wasn’t enough, customer demands are evolving as consumers seek round-the-clock personalized service.

These and other banking industry challenges can be resolved by the very technology that’s caused this disruption, but the transition from legacy systems to innovative solutions hasn’t always been an easy one. That said, banks and credit unions need to embrace digital transformation if they wish to not only survive but thrive in the current landscape.

1. Increasing Competition

The threat posed by FinTechs, which typically target some of the most profitable areas in financial services, is significant.  Goldman Sachs  predicted that these startups would account for upwards of $4.7 trillion in annual revenue being diverted from traditional financial services companies.

Goldman Sachs predicted that startups would account for upwards of 4.7 trillion us dollars in annual revenue being diverted from financial services companies

These new industry entrants are forcing many financial institutions to seek partnerships and/or acquisition opportunities as a stop-gap measure; in fact, Goldman Sachs, themselves, recently made headlines for  heavily investing  in FinTech. In order to maintain a competitive edge, traditional banks and credit unions must learn from FinTechs, which owe their success to providing a simplified and intuitive customer experience.

2. A Cultural Shift

From artificial intelligence (AI)-enabled wearables that monitor the wearer’s health to smart thermostats that enable you to adjust heating settings from internet-connected devices, technology has become ingrained in our culture — and this extends to the banking industry.

In the digital world, there’s no room for manual processes and systems. Banks and credit unions need to think of technology-based resolutions to banking industry challenges. Therefore, it’s important that financial institutions promote a culture of innovation, in which technology is leveraged to optimize existing processes and procedures for maximum efficiency. This cultural shift toward a technology-first attitude is reflective of the larger industry-wide acceptance of digital transformation.

3. Regulatory Compliance

Regulatory compliance has become one of the most significant banking industry challenges as a direct result of the dramatic increase in regulatory fees relative to earnings and credit losses since the 2008 financial crisis. From Basel’s  risk-weighted capital requirements  to the  Dodd-Frank Act , and from the Financial Account Standards Board’s  Current Expected Credit Loss  (CECL) to the  Allowance for Loan and Lease Losses  (ALLL), there are a growing number of regulations that banks and credit unions must comply with; compliance can significantly strain resources and is often dependent on the ability to correlate data from disparate sources.

Major Banking Regulations

Faced with severe consequences for non-compliance, banks have incurred additional cost and risk (without a proportional enhancement to risk mitigation) in order to stay up to date on the latest regulatory changes and to implement the controls necessary to satisfy those requirements. Overcoming regulatory compliance challenges requires banks and credit unions to foster a culture of compliance within the organization, as well as implement formal compliance structures and systems.

Technology is a critical component in creating this culture of compliance. Technology that collects and mines data, performs in-depth data analysis, and provides insightful reporting is especially valuable for identifying and minimizing compliance risk. In addition, technology can help standardize processes, ensure procedures are followed correctly and consistently, and enables organizations to keep up with new regulatory/industry policy changes.

4. Changing Business Models

The cost associated with compliance management is just one of many banking industry challenges forcing financial institutions to change the way they do business. The increasing cost of capital combined with sustained low-interest rates, decreasing return on equity, and decreased proprietary trading are all putting pressure on traditional sources of banking profitability. In spite of this, shareholder expectations remain unchanged.

This culmination of factors has led many institutions to create new competitive service offerings, rationalize business lines, and seek sustainable improvements in operational efficiencies to maintain profitability. Failure to adapt to changing demands is not an option; therefore, financial institutions must be structured for agility and be prepared to pivot when necessary.

5. Rising Expectations

Today’s consumer is smarter, savvier, and more informed than ever before and expects a high degree of personalization and convenience out of their banking experience. Changing customer demographics play a major role in these heightened expectations: With each new generation of banking customers comes a more innate understanding of technology and, as a result, an increased expectation of digitized experiences.

Millennials have led the charge to digitization, with  five out of six  reporting that they prefer to interact with brands via social media;  when surveyed , millennials were also found to make up the largest percentage of mobile banking users, at 47%. Based on this trend, banks can expect future generations, starting with Gen Z, to be even more invested in omnichannel banking and attuned to technology. By comparison, Baby Boomers and older members of Gen X typically value human interaction and prefer to visit physical branch locations.

millennials have led the charge to digitization, with five out of six reporting that they prefer to interact with brands via social media; when surveyed, millennials were also found to make up the largest percentage of mobile banking users, at 47 percent.

This presents banks and credit unions with a unique challenge: How can they satisfy older generations and younger generations of banking customers at the same time? The answer to this banking industry challenge is a hybrid banking model that integrates digital experiences into traditional bank branches. Imagine, if you will, a physical branch with a self-service station that displays the most cutting-edge smart devices, which customers can use to access their bank’s knowledge base. Should a customer require additional assistance, they can use one of these devices to schedule an appointment with one of the branch’s financial advisors; during the appointment, the advisor will answer any of the customer’s questions, as well as set them up with a mobile AI assistant that can provide them with additional recommendations based on their behavior. It might sound too good to be true, but the branch of the future already exists, and it’s helping banks and credit unions meet and exceed rising customer expectations.

Investor expectations must be accounted for, as well. Annual profits are a major concern — after all, stakeholders need to know that they’ll receive a return on their investment or equity and, in order for that to happen, banks need to actually turn a profit. This ties back into customer expectations because, in an increasingly constituent-centric world, satisfied customers are the key to sustained business success — so, the happier your customers are, the happier your investors will be.

The Time is Now: Digital Transformation in Financial Services

Financial services organizations are at a transformational tipping point. Faced with fierce market pressures throughout the industry technology transformation is no longer merely a competitive advantage, but an absolute necessity. Our experts break down the six key areas to focus your digital transformation strategy.

6. Customer Retention

Financial services customers expect personalized and meaningful experiences through simple and intuitive interfaces on any device, anywhere, and at any time. Although customer experience can be hard to quantify, customer turnover is tangible and customer loyalty is quickly becoming an endangered concept. Customer loyalty is a product of rich client relationships that begin with knowing the customer and their expectations, as well as implementing an ongoing client-centric approach.

In an Accenture Financial Services global study of nearly 33,000 banking customers spanning 18 markets, 49% of respondents indicated that customer service drives loyalty. By knowing the customer and engaging with them accordingly, financial institutions can optimize interactions that result in increased customer satisfaction and wallet share, and a subsequent decrease in customer churn

In an Accenture Financial global study of nearly 33000 banking customers spanning 18 markets, 49% of respondents indicated that customer service drives loyalty

Bots are one new tool financial organizations can use to deliver superior customer service. Bots are a helpful way to increase customer engagement without incurring additional costs, and  studies show  that the majority of consumers prefer virtual assistance for timely issue resolution. As the first line of customer interaction, bots can engage customers naturally, conversationally, and contextually, thereby improving resolution time and customer satisfaction. Using sentiment analysis, bots are also able to gather information through dialogue, while understanding context through the recognition of emotional cues. With this information, they can quickly evaluate, escalate, and route complex issues to humans for resolution.

7. Outdated Mobile Experiences

These days, every bank or credit union has its own branded mobile application — however, just because an organization has a mobile banking strategy doesn’t mean that it’s being leveraged as effectively as possible. A bank’s mobile experience needs to be fast, easy to use, fully-featured (think live chat, voice-enabled digital assistance, and the like), secure, and regularly updated in order to keep customers satisfied. Some banks have even started to reimagine what a banking app could be by introducing mobile payment functionality that enables customers to treat their smartphones like secure digital wallets and instantly transfer money to family and friends.

8. Security Breaches

With a  series of  high-profile breaches  over the past few years, security is one of the leading banking industry challenges, as well as a major concern for bank and credit union customers. Financial institutions must invest in the latest technology-driven security measures to keep sensitive customers safe, such as:

  • Address Verification Service (AVS): AVS “ checks the billing address  submitted by the card user with the cardholder’s billing address on record at the issuing bank” in order to identify suspicious transactions and prevent fraudulent activity.
  • End-to-End Encryption (E2EE) : E2EE “is a method of  secure communication  that prevents third-parties from accessing data while it’s transferred from one end system or device to another.” E2EE uses cryptographic keys, which are stored at each endpoint, to encrypt and decrypt private messages. Banks and credit unions can use E2EE to secure mobile transactions and other online payments so that funds are securely transferred from one account to another, or from a customer to a retailer.
  • Biometric authentication  “is a security process that relies on the  unique biological characteristics  of an individual to verify that he is who he says he is. Biometric authentication systems compare a biometric data capture to stored, confirmed authentic data in a database.” Common forms of biometric authentication include voice and facial recognition and iris and fingerprint scans. Banks and credit unions can use biometric authentication in place of PINs, as it’s more difficult to replicate and, therefore, more secure.
  • Location-based authentication  (sometimes referred to as  geolocation identification ) “is a special procedure to  prove an individual’s identity  and authenticity on appearance simply by detecting its presence at a distinct location.” Banks can use location-based authentication in conjunction with mobile banking to prevent fraud by either sending out a push notification to a customer’s mobile device authorizing a transaction, or by triangulating the customer’s location to determine whether they’re in the same location in which the transaction is taking place.
  • Out-of-band authentication (OOBA)  refers to “a process where authentication requires  two different signals from two different networks or channels … [By] using two different channels, authentication systems can guard against fraudulent users that may only have access to one of these channels.” Banks can use OOBA to generate a one-time security code, which the customer receives via automated voice call, SMS text message, or email; the customer then enters that security code to access their account, thereby verifying their identity.
  • Risk-based authentication (RBA)  — also known as adaptive authentication or step-up authentication — “is a method of applying  varying levels of stringency  to authentication processes based on the likelihood that access to a given system could result in its being compromised.” RBA enables banks and credit unions to tailor their security measures to the risk level of each customer transaction.

9. Antiquated Applications

According to the 2017  Gartner CIO Survey , over 50% of financial services CIOs believe that a greater portion of business will come through digital channels, and digital initiatives will generate more revenue and value.

According to the 2017 Gartner CIO survey, over 50% of financial services CIOs believe that a greater portion of business will come through digital channels, and digital initiatives will generate more revenue and value.

However, organizations using antiquated business management applications or siloed systems will be unable to keep up with this increasingly digital-first world. Without a solid, forward-thinking technological foundation, organizations will miss out on critical business evolution. In other words, digital transformation is not just a good idea — it’s become imperative for survival.

While technologies such as blockchain may still be too immature to realize significant returns from their implementation in the near future, technologies like cloud computing, AI, and bots all offer significant advantages for institutions looking to reduce costs while improving customer satisfaction and growing wallet share.

Cloud computing via software as a service and platform as a service solutions enable firms previously burdened with disparate legacy systems to simplify and standardize IT estates. In doing so, banks and credit unions are able to reduce costs and improve data analytics, all while leveraging leading-edge technologies. AI offers a significant competitive advantage by providing deep insights into customer behaviors and needs, giving financial institutions the ability to sell the right product at the right time to the right customer. Additionally, AI can provide key organizational insights required to identify operational opportunities and maintain agility.

10. Continuous Innovation

Sustainable success in business requires insight, agility, rich client relationships, and continuous innovation. Benchmarking effective practices throughout the industry can provide valuable insight, helping banks and credit unions stay competitive. However, benchmarking alone only enables institutions to keep up with the pack — it rarely leads to innovation. As the cliché goes, businesses must benchmark to survive, but innovate to thrive; innovation is a key differentiator that separates the wheat from the chaff.

Innovation stems from insights, and insights are discovered through customer interactions and continuous organizational analysis. Insights without action, however, are impotent — it’s vital that financial institutions be prepared to pivot when necessary to address market demands while improving upon the customer experience.

Financial service organizations leveraging the latest business technology, particularly around cloud applications, have a key advantage in the digital transformation race: They can innovate faster. The power of cloud technology is its agility and scalability. Without system hardware limiting flexibility,  cloud technology enables systems to evolve along with your business .

How Hitachi Solutions Can Help

With so many banking industry challenges to contend with, charting a clear path forward can seem like an overwhelming task — but with the right team to support your efforts, digital transformation is attainable. The financial services team at Hitachi Solutions has been helping banks and credit unions unlock digital experiences through the power of the Microsoft platform since 2004. With a wide variety of products and services tailored to the financial services industry, such as  Engage for Banking  and  Retail Banking Sales Insights , we’re familiar with the unique issues financial institutions face and have developed the technology to resolve them.

From data science expertise to business intelligence, AI, and beyond, Hitachi Solutions is here to help your organization tackle banking industry challenges and embrace digital transformation.

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The Who & What Behind the Blog

Landy serves as Industry Vice President for Banking and Capital Markets for Hitachi Solutions, a global business application and technology consultancy. He joined Hitachi Solutions following the acquisition of Customer Effective and has been with the organization since 2005.

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problem solving examples in banking

Five Problems AI Can Solve for Your Bank

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In a highly regulated industry built on core legacy banking systems, strategically leveraging the latest technology can be a challenge. However, the banks that adopt conversational AI will gain a competitive advantage by unlocking the ability to solve their most strategic problems.

Here are five ways conversational AI engages your customers while driving business results:

1. Create an engaging and differentiated customer experience. Banks today have a differentiation problem. According to the research firm Forrester, one-third of customers say all banks are essentially the same. In an effort to pull away from the pack, it’s critical for banks to create personalized experiences that surprise and delight their customers, making them feel like a valued individual rather than a collection of account numbers.

Conversational AI platforms can be implemented to fulfill customer requests, solve problems and predict customers’ needs in ways that are as natural as texting a friend. In addition to this, some of the more advanced bots support omnichannel delivery, making it possible to interact with customers anytime, anywhere and allowing them to engage on the channel they most prefer, whether it’s voice or text.

2. Change your relationship with customers from money mover to money manager. Traditional banks aren’t the only sheriffs in town. Digital-first challenger banks and fintech companies have burst onto the scene, providing modern experiences and championing customers’ financial well-being. Although this altruistic mission has been associated with fintech companies, there is no reason traditional retail banks can’t work with their customers to improve their financial health and become their go-to money manager.

Financial data is the key to boosting financial wellness. Traditional banks are sitting on a treasure trove of data that can unlock insights into customers’ spending patterns and savings goals. Using AI, banks can proactively inform customers about their spending habits, how much debt they have, and where their savings and investments stand. Leveraging conversational AI means banks can transform raw data into relevant and actionable recommendations that can take the customer relationship from managing money day-to-day to helping them plan for major life moments, like getting married or buying a house.

3. Increase the lifetime value of customers. Conversational AI also enhances a bank’s ability to build rewarding long-term relationships with customers. For example, some platforms can provide personalized recommendations with contextual offers for products and services and assist customers in making decisions about which loans, credit cards, savings and investment accounts are right for them. A branded virtual assistant gives you a vehicle to share those recommendations, and a unique opportunity to use data to proactively inform your customers and increase their share of wallet with you.

4. Decrease customer support costs. Conversational AI can reduce costs by deflecting and triaging customer support inquiries without sacrificing the quality of the customer experience. For instance, DBS Bank’s digital-only bank, digibank, requires only one-fifth of the resources of a traditional bank due to cost-saving features such as an AI-driven virtual assistant that is the face of the bank. The assistant handles 82 percent of all customer requests in the digibank application without needing to involve customer support staff, freeing these teams to focus on the tasks that require a human touch.

5. Build trust and loyalty. By providing their customers with proactive recommendations and helping them achieve their financial goals, banks can foster financial literacy and well-being. Conversational AI gives insights into spending, uncovering those insights to make customers more aware of their financial status and help them reach their goals. Rather than present the data in a static spreadsheet or long-form statement, AI powers human-like conversations to help build brand affinity and trust, fundamentally changing the relationship between bank and customer.

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  • The joys of problem solving
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Many accountants enjoy problem solving more than number crunching. So what typical problems can you look forward to cracking at work? Iwona Tokc-Wilde reports

job-satisfaction

Problem solving is something that accountants and finance professionals deal with virtually every working day. In fact, a recent survey by Robert Half shows it is this part of working in the profession that they like best: 41% of accountants say solving problems gives them the most job satisfaction, compared to just 22% who prefer working with numbers.

‘Accountants are usually excellent at dealing with detail and spotting patterns, which makes them good at – and enjoy – problem solving,’ comments Andi Lonnen, founder and director of Finance Training Academy.

If you are at the beginning of your journey into the profession and enjoy tackling problems, you have a head start. Problem solving is also a skill that is one of the 10 most sought-after trainee skills globally (see 'Related links').

Why problem-solving skills are so important

‘The role of accountancy and finance has shifted from a pure focus on fiscal control to one where it has an impact on the business,’ says Phil Sheridan, managing director at Robert Half.

‘The requirement for problem-solving skills is part of this transition as, by mining data and analysing trends, accountants are now translating numbers into actionable insights for the business and are increasingly being seen as strategic partners.’ By putting their data skills and their problem-solving skills to work together, they also help uncover potential areas for concern.

It is vital for accountants in practice to correctly identify, analyse and solve problems too.

‘As trusted advisers, it’s our role to look at everything in detail to pick-up anomalies, patterns and correlations in order to advise our clients on how to take things forward,’ says Shahzad Nawaz of AA Accountants. If they fail to pick up and analyse problems correctly, the accounts could be wrong.

‘This means the business owner would be relying on incorrect data, which could have a detrimental effect on the future of the business. And, of course, if external stakeholders are relying on the data, then we could potentially be misleading them too.’

Incorrect accounts could also have other serious knock-on effects.

‘If the accounting figures are incorrect, then the tax payments relating to the company will be incorrect too. Later on, the client could find themselves with additional tax to pay – with interest,’ says Tanya Addy of BHP Chartered Accountants. 

‘Inaccurate accounting can also land businesses in serious commercial difficulties especially if, as a result, directors/owners have been taking more salary or dividends from the business than they were entitled to. In the worst case scenario, it could even lead to closure of the business.’

Problem solving at work

There are many areas where trainee and new accountants can practise solving problems, depending on the job you are doing.

‘If it’s accountancy, you’ll be looking at helping a business with cash flow, debtors and improving their record-keeping,’ says Nawaz.

At the nitty-gritty level, you will be reconciling control accounts, trying to understand why an account might not be balancing and investigating and clearing old items on reconciliations.

‘The work to balance an account involves finding out what the problem is and then resolving it, for example identifying and correcting transposition errors,’ says Lodden.

If you work in tax, you’ll be involved in advising a client on how much tax they will need to pay (and how much tax they can save) in a particular year.

‘This will require a review of the information provided by the client, such as bank statements and expenses, analysing which expenses incurred are allowable and disallowable for taxation, quantifying the results and communicating them to the client and to tax authorities,’ explains Carolyn Napier, senior ACCA tutor at London School of Business and Finance. 

You will also be dealing with tax implications, and tax cost for both employer and employee, of providing benefits.

‘You will need to ascertain which benefits are taxable and which are tax-free, and then you’ll need to "solve the problem" of which tax or taxes are due and payable, and by what date,’ says Napier.

In industry, you may be given the opportunity to help analyse projects, and communicate your findings to various parts of the business.

‘This is where new and trainee accountants will need to be prepared to utilise their problem-solving skills – noting anomalies and seeking clarification on areas of uncertainly will ensure that a clearer picture can be obtained,’ says Sheridan.

Deborah Adigun-Hameed is an accountant and junior financial analyst at BlueBay Asset Management. By utilising her problem-solving aptitude and skills, she has been involved in major decisions that shape the company she works for.

‘I’ve contributed to key strategic discussions about which market and products are profitable, what we should be selling and how we compare with our competitors,’ says Adigun-Hameed.

‘I may be newly qualified, but my informed opinions and advice are really valued by the management.’

Both in practice and in industry, accountants are also increasingly called upon to help solve technology problems – for example, when a business intends to implement new business software solutions. They help with the evaluation and selection of a solution, and with planning and execution of the implementation process. They also assist in testing the new system and facilitate going live when the system is ready.

Hone your problem-solving skills

Problem solving is about using logic and your technical expertise to assess a situation and to come up with a workable solution. It is connected to other skills such as level-headedness and resilience, analytical skills and good teamworking skills.

It also requires creativity, which is best learnt through collaboration – brainstorming with others to clarify the problem, generate ideas and create as many potential solutions as possible. When putting forward ideas, be confident in your contributions.

‘Everyone, including those newly-qualified, has something to offer,’ says Adigun-Hameed.  ‘Always think outside of the box, as cliché as that may sound. No new idea is insignificant. Innovation can be incremental; change can be small or radical.’

Improving your listening and communication skills will also make you a better problem solver.

‘Learning to communicate well is vital as you need to build rapport with clients. If you have a good rapport with someone, you are confident to ask questions, which is how you can pin down problems and find answers to those problems,’ says Nawaz.

Above all else, getting practical on-the-job experience is how you can get really good at problem solving.

‘The first control account a trainee tends to tackle and perfect is the bank control account; every trainee accountant has had to look for that 1p difference – as painful as that sounds, it certainly helps you learn,’ says Lauren Burt, client manager at EST Accountants and Tax Advisers.

"Everyone, including those newly-qualified, has something to offer. Always think outside of the box, as cliché as that may sound. No new idea is insignificant. Innovation can be incremental; change can be small or radical" Deborah Adigun-Hameed - BlueBay Asset Management

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Interview Questions

Comprehensive Interview Guide: 60+ Professions Explored in Detail

26 Good Examples of Problem Solving (Interview Answers)

By Biron Clark

Published: November 15, 2023

Employers like to hire people who can solve problems and work well under pressure. A job rarely goes 100% according to plan, so hiring managers will be more likely to hire you if you seem like you can handle unexpected challenges while staying calm and logical in your approach.

But how do they measure this?

They’re going to ask you interview questions about these problem solving skills, and they might also look for examples of problem solving on your resume and cover letter. So coming up, I’m going to share a list of examples of problem solving, whether you’re an experienced job seeker or recent graduate.

Then I’ll share sample interview answers to, “Give an example of a time you used logic to solve a problem?”

Problem-Solving Defined

It is the ability to identify the problem, prioritize based on gravity and urgency, analyze the root cause, gather relevant information, develop and evaluate viable solutions, decide on the most effective and logical solution, and plan and execute implementation. 

Problem-solving also involves critical thinking, communication, listening, creativity, research, data gathering, risk assessment, continuous learning, decision-making, and other soft and technical skills.

Solving problems not only prevent losses or damages but also boosts self-confidence and reputation when you successfully execute it. The spotlight shines on you when people see you handle issues with ease and savvy despite the challenges. Your ability and potential to be a future leader that can take on more significant roles and tackle bigger setbacks shine through. Problem-solving is a skill you can master by learning from others and acquiring wisdom from their and your own experiences. 

It takes a village to come up with solutions, but a good problem solver can steer the team towards the best choice and implement it to achieve the desired result.

Watch: 26 Good Examples of Problem Solving

Examples of problem solving scenarios in the workplace.

  • Correcting a mistake at work, whether it was made by you or someone else
  • Overcoming a delay at work through problem solving and communication
  • Resolving an issue with a difficult or upset customer
  • Overcoming issues related to a limited budget, and still delivering good work through the use of creative problem solving
  • Overcoming a scheduling/staffing shortage in the department to still deliver excellent work
  • Troubleshooting and resolving technical issues
  • Handling and resolving a conflict with a coworker
  • Solving any problems related to money, customer billing, accounting and bookkeeping, etc.
  • Taking initiative when another team member overlooked or missed something important
  • Taking initiative to meet with your superior to discuss a problem before it became potentially worse
  • Solving a safety issue at work or reporting the issue to those who could solve it
  • Using problem solving abilities to reduce/eliminate a company expense
  • Finding a way to make the company more profitable through new service or product offerings, new pricing ideas, promotion and sale ideas, etc.
  • Changing how a process, team, or task is organized to make it more efficient
  • Using creative thinking to come up with a solution that the company hasn’t used before
  • Performing research to collect data and information to find a new solution to a problem
  • Boosting a company or team’s performance by improving some aspect of communication among employees
  • Finding a new piece of data that can guide a company’s decisions or strategy better in a certain area

Problem Solving Examples for Recent Grads/Entry Level Job Seekers

  • Coordinating work between team members in a class project
  • Reassigning a missing team member’s work to other group members in a class project
  • Adjusting your workflow on a project to accommodate a tight deadline
  • Speaking to your professor to get help when you were struggling or unsure about a project
  • Asking classmates, peers, or professors for help in an area of struggle
  • Talking to your academic advisor to brainstorm solutions to a problem you were facing
  • Researching solutions to an academic problem online, via Google or other methods
  • Using problem solving and creative thinking to obtain an internship or other work opportunity during school after struggling at first

You can share all of the examples above when you’re asked questions about problem solving in your interview. As you can see, even if you have no professional work experience, it’s possible to think back to problems and unexpected challenges that you faced in your studies and discuss how you solved them.

Interview Answers to “Give an Example of an Occasion When You Used Logic to Solve a Problem”

Now, let’s look at some sample interview answers to, “Give me an example of a time you used logic to solve a problem,” since you’re likely to hear this interview question in all sorts of industries.

Example Answer 1:

At my current job, I recently solved a problem where a client was upset about our software pricing. They had misunderstood the sales representative who explained pricing originally, and when their package renewed for its second month, they called to complain about the invoice. I apologized for the confusion and then spoke to our billing team to see what type of solution we could come up with. We decided that the best course of action was to offer a long-term pricing package that would provide a discount. This not only solved the problem but got the customer to agree to a longer-term contract, which means we’ll keep their business for at least one year now, and they’re happy with the pricing. I feel I got the best possible outcome and the way I chose to solve the problem was effective.

Example Answer 2:

In my last job, I had to do quite a bit of problem solving related to our shift scheduling. We had four people quit within a week and the department was severely understaffed. I coordinated a ramp-up of our hiring efforts, I got approval from the department head to offer bonuses for overtime work, and then I found eight employees who were willing to do overtime this month. I think the key problem solving skills here were taking initiative, communicating clearly, and reacting quickly to solve this problem before it became an even bigger issue.

Example Answer 3:

In my current marketing role, my manager asked me to come up with a solution to our declining social media engagement. I assessed our current strategy and recent results, analyzed what some of our top competitors were doing, and then came up with an exact blueprint we could follow this year to emulate our best competitors but also stand out and develop a unique voice as a brand. I feel this is a good example of using logic to solve a problem because it was based on analysis and observation of competitors, rather than guessing or quickly reacting to the situation without reliable data. I always use logic and data to solve problems when possible. The project turned out to be a success and we increased our social media engagement by an average of 82% by the end of the year.

Answering Questions About Problem Solving with the STAR Method

When you answer interview questions about problem solving scenarios, or if you decide to demonstrate your problem solving skills in a cover letter (which is a good idea any time the job description mention problem solving as a necessary skill), I recommend using the STAR method to tell your story.

STAR stands for:

It’s a simple way of walking the listener or reader through the story in a way that will make sense to them. So before jumping in and talking about the problem that needed solving, make sure to describe the general situation. What job/company were you working at? When was this? Then, you can describe the task at hand and the problem that needed solving. After this, describe the course of action you chose and why. Ideally, show that you evaluated all the information you could given the time you had, and made a decision based on logic and fact.

Finally, describe a positive result you got.

Whether you’re answering interview questions about problem solving or writing a cover letter, you should only choose examples where you got a positive result and successfully solved the issue.

Example answer:

Situation : We had an irate client who was a social media influencer and had impossible delivery time demands we could not meet. She spoke negatively about us in her vlog and asked her followers to boycott our products. (Task : To develop an official statement to explain our company’s side, clarify the issue, and prevent it from getting out of hand). Action : I drafted a statement that balanced empathy, understanding, and utmost customer service with facts, logic, and fairness. It was direct, simple, succinct, and phrased to highlight our brand values while addressing the issue in a logical yet sensitive way.   We also tapped our influencer partners to subtly and indirectly share their positive experiences with our brand so we could counter the negative content being shared online.  Result : We got the results we worked for through proper communication and a positive and strategic campaign. The irate client agreed to have a dialogue with us. She apologized to us, and we reaffirmed our commitment to delivering quality service to all. We assured her that she can reach out to us anytime regarding her purchases and that we’d gladly accommodate her requests whenever possible. She also retracted her negative statements in her vlog and urged her followers to keep supporting our brand.

What Are Good Outcomes of Problem Solving?

Whenever you answer interview questions about problem solving or share examples of problem solving in a cover letter, you want to be sure you’re sharing a positive outcome.

Below are good outcomes of problem solving:

  • Saving the company time or money
  • Making the company money
  • Pleasing/keeping a customer
  • Obtaining new customers
  • Solving a safety issue
  • Solving a staffing/scheduling issue
  • Solving a logistical issue
  • Solving a company hiring issue
  • Solving a technical/software issue
  • Making a process more efficient and faster for the company
  • Creating a new business process to make the company more profitable
  • Improving the company’s brand/image/reputation
  • Getting the company positive reviews from customers/clients

Every employer wants to make more money, save money, and save time. If you can assess your problem solving experience and think about how you’ve helped past employers in those three areas, then that’s a great start. That’s where I recommend you begin looking for stories of times you had to solve problems.

Tips to Improve Your Problem Solving Skills

Throughout your career, you’re going to get hired for better jobs and earn more money if you can show employers that you’re a problem solver. So to improve your problem solving skills, I recommend always analyzing a problem and situation before acting. When discussing problem solving with employers, you never want to sound like you rush or make impulsive decisions. They want to see fact-based or data-based decisions when you solve problems.

Next, to get better at solving problems, analyze the outcomes of past solutions you came up with. You can recognize what works and what doesn’t. Think about how you can get better at researching and analyzing a situation, but also how you can get better at communicating, deciding the right people in the organization to talk to and “pull in” to help you if needed, etc.

Finally, practice staying calm even in stressful situations. Take a few minutes to walk outside if needed. Step away from your phone and computer to clear your head. A work problem is rarely so urgent that you cannot take five minutes to think (with the possible exception of safety problems), and you’ll get better outcomes if you solve problems by acting logically instead of rushing to react in a panic.

You can use all of the ideas above to describe your problem solving skills when asked interview questions about the topic. If you say that you do the things above, employers will be impressed when they assess your problem solving ability.

If you practice the tips above, you’ll be ready to share detailed, impressive stories and problem solving examples that will make hiring managers want to offer you the job. Every employer appreciates a problem solver, whether solving problems is a requirement listed on the job description or not. And you never know which hiring manager or interviewer will ask you about a time you solved a problem, so you should always be ready to discuss this when applying for a job.

Related interview questions & answers:

  • How do you handle stress?
  • How do you handle conflict?
  • Tell me about a time when you failed

Biron Clark

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Solving Problems in Investment Banking Interviews: How to Show Your Analytical Skills

If you're preparing for an investment banking interview, showcasing your analytical skills is crucial.

Posted May 11, 2023

problem solving examples in banking

Investment banking is a highly competitive field, and potential employers are always on the lookout for candidates who possess exceptional analytical skills. Investment bankers need to be excellent problem solvers who can critically analyze complex financial data and make sound decisions. If you're pursuing a career in investment banking, you need to prepare yourself to showcase your analytical skills during job interviews. In this article, we'll discuss the importance of analytical skills in investment banking, common problems faced in investment banking interviews, and how you can prepare yourself to impress your interviewer and land your dream job.

Understanding the Importance of Analytical Skills in Investment Banking

Investment banking provides a range of financial services including mergers and acquisitions (M&A), equity underwriting, debt underwriting, and financial advisory services. Investment banks work with corporations, government agencies, and institutional investors to help them raise capital and manage their finances. In order to succeed in this industry, investment bankers must possess superior analytical skills. They must be able to analyze financial statements, forecasts and projections while making complex financial models, conducting valuations, and monitoring market trends. A strong analytical acumen and the ability to solve problems quickly and efficiently are key traits that set successful candidates apart from the competition.

Moreover, investment bankers must also possess excellent communication skills. They need to be able to explain complex financial concepts to clients who may not have a background in finance. They must also be able to work effectively in teams, as investment banking deals often involve multiple parties and stakeholders. In addition, investment bankers must be able to handle high-pressure situations and tight deadlines, as the industry is known for its fast-paced and demanding work environment. Overall, a combination of analytical, communication, teamwork, and time-management skills are essential for success in investment banking.

Common Problems Faced in Investment Banking Interviews

Investment banking interviews can be extremely challenging, and candidates must prepare well in advance to demonstrate their analytical skills. One of the most common problems faced by candidates is the case-study interview, which requires them to analyze a complex business problem and present a solution. Another challenge is answering behavioral questions that gauge how they have handled difficult situations in the past. Interviewers also tend to ask brainteasers and demonstrated questions that can catch candidates off guard.

Preparing for Investment Banking Interviews: Tips and Tricks

Preparing for investment banking interviews requires a significant amount of preparation before the big day. Here are some tips and tricks to help you showcase your analytical skills and nail your interview:

Research the Company:

Investment bankers want to work for institutions that match their skills and vision. Research the company and the role you're applying for to understand the responsibilities and requirements. Analyze the organization's financial statements, read current news articles, and review past projects. Being aware of current events and analyzing the financial market news will help you respond to specific questions more effectively.

Understand the Question:

When answering analytical questions, make sure you understand the question clearly. Ask clarifying questions if needed, and make sure you have time to think about your response. Break down the problem to understand key components and devise a structured approach to solving it. Practice using frameworks such as the Four CS approach, SWOT analysis, and Porter’s Five Forces framework to guide your analysis.

Be Confident:

Confidence is key in an investment banking interview. Be clear and concise in your responses while demonstrating your analytical skills, but do not come across as overly aggressive or arrogant. Listen carefully to the interviewer, and ask for clarification when needed. Always end your responses by summarising your findings and clarifying your recommendations.

How to Showcase Your Analytical Skills During an Interview

There are several ways to showcase your analytical skills during an interview, including:

Demonstrate Your Problem-Solving Skills:

Investment banking interviews are looking for individuals who can solve complex problems effectively. Practice providing solutions to case studies, demonstrating your technical abilities, and highlighting your approach throughout the process. Show that you can identify the root cause of the problem and are capable of providing actionable recommendations.

Provide Examples of Past Experiences:

Interviewers often question a candidate's analytical abilities by probing their previous work experience. This is an opportunity to share past experiences where you have demonstrated your analytical abilities by providing financially sound solutions to problems you have encountered before. Prepare scenarios and be ready to present a summary of the problem, your approach towards providing a solution, and the outcome.

Show Your Passion:

The investment banking industry is constantly growing and changing, and interviewers want to work with people who enjoy the challenges they face every day. Demonstrate your enthusiasm for the field by sharing what draws you to the industry, your career goals, and interests in finance.

Strengthening Your Quantitative Aptitude for Investment Banking Interviews

A career in investment banking requires a strong quantitative acumen, and candidates must demonstrate their financial modeling and numerical skills. Here are some tips to prepare for quantitative interviews:

Practice Financial Modeling:

An excellent way to strengthen your quantitative aptitude and modeling skills is to practice designing financial models. Use online resources or project-based challenges to test your skills in valuation, accretion and dilution analysis, ratio analysis, and financial statement manipulation.

Develop Your Excel Skills:

Excel is a critical tool used every day by investment bankers. To improve your skills, consider taking an online course or workshop. Make sure you're comfortable with error-checking, troubleshooting, and developing complex formulas.

Understand Financial Statements:

Reviewing and comprehending financial statements is a significant part of an investment banking role. Understand the income statement, balance sheet, cash flow statement as well as financial ratios and calculations. Practice analyzing and interpreting data to develop your skillset.

The Role of Critical Thinking in Investment Banking Interviews

Critical thinking is an essential life skill and plays a vital role in investment banking; interviewers want to work with candidates who demonstrate their ability to think critically and solve problems. Here are some ways you can prepare for critical thinking-focused interviews:

Practice Brain Teasers:

Brain teasers are a way to test candidates' critical thinking skills and can be included in the interview process. Take some time to practice typical brain teasers to improve reasoning and problem-solving abilities.

Read Case Studies:

Case studies are a critical component of investment banking interviews, and so reading them is an excellent way to prepare. Analyze structures, strategies, and recommendations of past cases and work towards devising a solution.

Become Self-Aware:

Critical thinking is also about self-reflection; understand your preferred thinking styles, emotional responses and thinking biases. Understanding this will help you manage your mindset and approach to problem-solving effectively.

Practice Makes Perfect: Mock Interview Strategies for Success

One of the best ways to prepare for investment banking interviews is to practice. Mock interviews are an excellent way to identify skill gaps and opportunities for improvement. Here are some tips to make the most out of your mock interviews:

Record and Analyze:

Record your mock interview and analyze your performance. Listen to feedback from your coach, review the recording and focus on your weaknesses. Review your posture, demeanor as well as your responses to questions.

Practice Mental Preparation:

Mentally preparing for an interview is just as crucial as practicing verbal responses. Prior to mock interviews, research current scenarios in the industry, practice calming breathing techniques, and visualize interviewing successfully.

Seek Feedback:

Mock interviews provide an opportunity to refine your skills and receive feedback from experts. Make sure to seek feedback from individuals who have experience in investment banking interviews. Use their guidance to continually improve as you move closer to the real thing.

Nailing the Behavioral Questions in Investment Banking Interviews

Behavioral questions are a way to test how candidates will fit into the culture of the organization. Here are some tips to help you prepare for such questions:

Be honest when answering these questions, and ensure that your responses highlight your skills and experience. Do not make up situations or tell stories that are not true.

Practice storytelling to maintain the interviewer's interest in your responses. Make sure your behavior reflects that of an investment banker, i.e., remain calm and composed in challenging situations.

Be Self-Reflective:

Behavioral interviews test for qualities like integrity, teamwork, and communication. Be self-aware and reflective when providing responses. Journal your decisions and the manner in which you handled past conflicts so you can respond with maturity and poise.

The Power of Storytelling: Crafting Compelling Responses to Interview Questions

Interviews provide an opportunity to showcase your skills and experience. Storytelling is an excellent way to provide engaging, memorable responses to impress your interviewer. Here are some tips on crafting compelling stories:

Provide Context:

When telling a story, it's essential to give the interviewer adequate context to understand the scenario correctly. Set the stage by explaining where you were, what you were thinking, and what your priorities were when the event occurred.

Highlight Your Role:

During storytelling, ensure that you clarify your role in the scenario, including the skills that enabled you to handle the situation. Showcase both your leadership skills and ability to work in a team.

Provide Results:

End your story by highlighting how the scenario ended, including any measurable effects of your actions. For example, if you saved a business or led a successful merger, clarifying the outcome will appeal to interviewers who have a problem-solving focus.

Mistakes to Avoid During an Investment Banking Interview

Here are some of the common mistakes to avoid during an investment banking interview:

Being Arrogant:

Confidence is essential during an interview, but being arrogant can close more doors than it opens. Remember that interviews are an opportunity to present yourself to the interviewer in a professional and respectful manner.

Over-explaining:

Candidates often disguise insecurity by over-explaining themselves to the interviewer. Keep your responses concise, avoid repeating yourself and stick to the topic at hand.

Speaking Negatively About Your Previous Employers:

Talking negatively about your previous employers is a big no-no in interviews. Interviewers want to work with individuals who have a strong track record of maintaining professional and ethical behavior.

Follow-Up Strategies: How to Stand Out After the Interview

Follow-up strategies can help you stand out after the interview:

Send a Thank-you Note:

Send a thank-you note to the interviewer after the interview to show appreciation for their time and consideration. This can be via email or hand-written note for a personal touch.

Stay in Touch:

Stay in touch with the organization after your interview, demonstrate your interest in the company and inquire about the post-interview decision-making process regularly.

Remain respectful and professional throughout the process, even if you missed the opportunity or didn’t get the job. Building a professional relationship with the interviewer can present future opportunities.

Conclusion: Mastering Analytical Skills for a Successful Career in Investment Banking

Investment banking interviews can be intense, competitive, and challenging. To show your analytical skills, it's essential to demonstrate your critical reasoning and problem-solving abilities, showcase experiences from your previous work, and be self-aware. Preparing for behavioral questions, improving your technical and quantitative aptitude, and crafting compelling responses are some of the essential steps to success. Finally, remember that persistence and hard work are necessary for success, so keep at it and develop your analytical skills to secure your place in the investment banking industry.

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Ironside Group

The 5 Whys of Problem Solving in Finance

problem solving in finance

Many Finance professionals are faced with the daily task of solving problems. Whether they come from IT Services, the Business Intelligence team, or even the next cube over, we can never seem to fix enough.

The first, and most important step in solving problems is to identify them, otherwise known as Root Cause Analysis. The “5 Whys” methodology is far and away one of the most efficient methods for honing in on and conceptualizing the root cause of any dilemma you might come across.

This technique requires five iterations of asking “why” to probe continuously deeper into the root cause of an event. (“Why 5 ?” you might ask? It was found through years of experimentation at Toyota to be the usual number of whys it takes to get oneself to the crux of the issue.)  1

problem solving in finance

The best way to understand the “5 Whys” methodology is through an example. As many of us are well aware, finance departments are plagued with an inability to submit their budgets on time. When managers ask themselves why this happens, the first answer tends to be “well, we’re not working fast enough” or “we don’t have enough resources.” When a follow-up “why” is asked, there is often some flustered arm-flapping and muttering. The reason the root-cause analysis stops early is because people inherently focus on what they can see and touch. The key, however, is to focus on “why did the process fail” and not on “why did my people fail.”

When we focus on the process, we begin to dig into the infrastructure of our tools and methodologies. I was brought onto a client project to build a financial planning model . When building the organization dimension, I was given a temporary file containing a hierarchy that could change at any given moment; the source database holding the hierarchy was going through a complete revamp while I was building the model that relies on it.

So I started the following question and answer thread:

Q1: Why are we running the source database upgrade now?

A1: This was the earliest the database upgrade could start.

Q2: Why are we running these upgrades in tandem?

A2: There was not enough communication between internal projects and consulting groups.

Q3: Why the breakdown of communication?

A3: There is no process in place.

Q4: Why is there no process?

A4 : We have never run an upgrade this large before and do not have experience with it.

Q5: Why do you not have experience with it?

A5: Ah, well…therein lies the root cause of the issue; we should have brought in someone with experience and process knowledge.

In this scenario, we ended up having to take special care to avoid going over budget or losing out on key functionality. However, if a better process for coordinating the two upgrades had been in place, the extra time and effort put into keeping the project on task could have been put toward adding extra functionality.

Upgrading infrastructure, such as tools and processes, and bringing in experience and education keeps us at the top of our game and allows us to work in unison instead of at odds. Next time you are looking at improving your business , consider looking at workflow, methodology, training, and technology options as key areas of improvement. But, never forget to ask yourself “why?”

1  Ohno, Taiichi. Toyota Production System: beyond Large-Scale Production. Productivity Press, 1988.

About Ironside

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  • Real life examples of challenges in banking industry & strategies adopted for success

Real life examples of challenges in banking industry & strategies adopted for success

Real life examples of challenges in banking industry & strategies adopted for success

Along with the banking industry’s digital transformation, comes significant challenges in the operational model as well as customer and business strategy to remain competitive. Given in this article are few of the real-life challenges faced by banks, and the strategies adopted by the banks to succeed in the coming year and mitigate the risk posed by these challenges. Overcoming these challenges is not easy and the transition from legacy systems to innovative solutions requires various coordinated steps to survive but thrive in the current landscape.

The banking industry is undergoing a radical shift fueled by ever-changing technology, competitive landscape driven by new FinTechs, evolving business models, mounting regulation and compliance pressures, and new disruptive technologies. Given in the article are some of the real problems faced by banks and how they worked through them.

Project 1 - Value Proposition Segmentation

Project description.

The purpose of this project is to identify a single segment within the mass market with the intent of creating a specific value proposition (s) relating to either the current account or personal loan product. The effort should assist the business in helping to acquire a greater number of new clients by more effectively designing, developing, and marketing the product offerings and value proposition.

Project Deliverables & Timeline

  • Background and project orientation
  • Key observations and questions
  • Segment selection and criteria for selection
  • Product selection and key requirements
  • High-level marketing plan

Project 2 - Marketing Spend Effectiveness (MSE) Evaluation

What is the current business challenge.

As Marketers are increasingly being asked to maximize their budgets, there is a desire to correlate various marketing expenditures with business metrics to demonstrate relative efficiency and effectiveness in ability to drive profitable growth. Cutting costs is critical to navigating the slowdown. In the absence of clear MSE methodology marketers run the risk to not being able to protect critical investments. Bank has not been able to generate such analysis internally due to its multi-variate nature, and is currently reliant on econometric models provided by media agencies.

What is the goal of this project?

This project will identify alternate best practices for correlating marketing spend to business results. The project team will

  • identify market best practices amongst the industry or external suppliers, and
  • evaluate the available options on a cost/benefit matrix,
  • ultimately recommending a marketing expenditure evaluation tool that represents the best value

Project 3 - Segment based risk strategy

Consumer business completed a detailed client segmentation and profitability study. Business strategy is being formed around the segment approach. Channel strategy, service levels, value props, product offering, and risk approach are about to align with the new strategy.

The project team will consist of representatives from Risk, Pricing, Marketing, and Retail sales and product teams. The project team will

  • Review the output of the segmentation study from the perspective of risk parameters by segments
  • Identify the opportunities targeting customers more precisely to improve risk efficiency
  • Propose quick and doable solutions on how to change the current process/ approach to treat affluent mortgage customers differently (shorter cycle time but improving expected delinquency)
  • Set the main elements of the segment based risk strategy (including collection)

Project 4 - Term Deposit (TD) Pricing Strategy

TDs are a very popular way to save. Whilst they represent large commercial benefits to banks, the margins are generally very low. 40% of the Bank's deposit balances are held on TD products. Most banks take a very simple approach to price TDs by offering a rate (which may be tiered) for a specific term. On maturity, it is rolled over into a similar term at the prevailing rate unless the customer specifies otherwise. This approach does not take into account individual circumstances, price sensitivity, etc.

Develop new approaches for TD pricing/product development, which enable banks to retain more balances, improve overall margins, and also to attract new customers. The project team will

  • Review the current approach to TD pricing
  • Document the current competitive landscape, and other bank’s offerings, including an overview of competitive value propositions, product features/benefits, pricing. margins, rollover rates, etc.
  • Screen best practices around the globe from other banks
  • Make recommendations to improve the profitability of these products for new customer recruitment, and retaining / rollover balances
  • Define the commercial benefits to any recommendation

Project 5 - Developing Early-Warning Systems in Risk-Based Controls

  • Understanding the risky transaction, control, and reporting concepts; being aware of existing capabilities.
  • Preparing a detailed project plan/project abstract
  • Gathering all necessary data and information
  • Creating early-warning systems and linking them with the existing database
  • Finalizing the report and the presentation

Project 6 - Increasing Online Sales efficiency in personal loans and time deposits

The share of the online channel among overall sales of term deposit and personal loans is below the penetration rate of Online Channel usage among the bank.

  • Increase the share of Online Channel within the overall sales.
  • The goal is to increase the number and the volume of time deposit and personal loans sold on delivery channels
  • Identify sales strategies of these specific products for Online Channel
  • This strategy needs to be in line with current innovative and market leader (in online banking) position

The deliverables include:

  • Review and apply brand-new applications and perspectives (like e-auctions)
  • Channel-specific product development and marketing strategy of these new products
  • Develop online sales & marketing strategy for current time deposit and personal loan products along with new products/applications developed within the project.
  • Develop a Marketing Plan for current time deposit and personal loan products along with new products/applications developed within the project.
  • Interactive Marketing Planning should also be included in the marketing plan (i.e. How to use social media, how to use online/mobile channels effectively)

Project 7 - Preparing Online Company Information Cards

Our target is to reach all the needed data in one report for each company. Also, we need this data to update itself automatically.

The project group will:

  • Gather all the necessary information associated with customers in one database
  • Link them to our Bank’s server in order for the data to update itself automatically.
  • Create a one-page access report for each company containing all the necessary data
  • Clearly understand Corporate Banking, its customers and the main data held in the Bank system associated with them
  • Create an access database. Gather all the data associated with customers from the database. Also, link the data to our server.
  • Finalize the required company card reports. Prepare the report out and presentation

Banking Domain Knowledge - Resources

Related links, you may also like.

Definition of Bank: Meaning of the term Bank and the Business of Banking

Definition of Bank: Meaning of the term Bank and the Business of Banking

What do we mean by the word bank? How did the word bank originate? What is the most simple and concise definition of a bank that explains the fundamentals of the banking process? Does the definition of banking vary from country to country? What are the key differentiators between any other business and a Bank? Get answers to all these questions and explore the basics of bank and banking as an industry.

History of Banking: Evolution of Banking as an Industry

History of Banking: Evolution of Banking as an Industry

Banking is one of the oldest industries and banking in the form that we know of began at about 2000BC of the ancient world. It started with merchants making grain loans to farmers and traders while carrying goods between cities. Since then, the banking industry has evolved from a simplistic barter system and gift economies of earlier times to modern complex, globalized, technology-driven, and internet-based e-banking model. In this article, we will take you through the major events and developments in the history of the banking industry.

History of Banking: Famous Banks from the Past

History of Banking: Famous Banks from the Past

Seven hundred years ago a bank was established in Venice, which made transactions resembling modern banking. In 1407, another bank was founded in Italy under the name of Banco di San Giorgio which was one of the oldest chartered banks in Europe. Sveriges Riksbank (Riksbanken), is the central bank of Sweden and the world's oldest central bank. The Bank of England is the second oldest central bank in the world, and most modern central banks have been based on that model. Let us explore some interesting events as we learn more about these early banking institutions.

History of Banking: The Gold Standard & Fractional Reserve Banking

History of Banking: The Gold Standard & Fractional Reserve Banking

Gold has always been considered as a safe economic investment and treated like a currency. All of the economically advanced countries of the world were on the gold standard for a relatively brief time. Under a gold standard, the value of a unit of currency, such as a dollar, is defined in terms of a fixed weight of gold and banknotes or other paper money are convertible into gold accordingly. Explore the fascinating history of the gold standard through the lens of history and also learn why banks hold back a certain fraction of deposits as reserves.

Overview of Banking Industry: The Industry Basics

Overview of Banking Industry: The Industry Basics

Banks play a key role in the entire financial system by mobilizing deposits from households spread across the nation and making these funds available for investment, either by lending or buying securities. Today the banking industry has become an integral part of any nation’s economic progress and is critical for the financial wellbeing of individuals, businesses, nations, and the entire globe. In this article, we will provide an overview of key industry concepts, main sectors, and key aspects of the banking industry’s business model and trends.

Banking Sector, Segments & It's Classifications

Banking Sector, Segments & It's Classifications

The banking industry players deal in a variety of products from savings accounts to loans and mortgages, offer various services from check cashing to underwriting, caters to different types of customers from individuals to large corporates, serve diverse geographies from rural villages to cross-border operations. Thus the banking industry is made up of several types of banks, with their own objectives, roles, and functions. In this article, we will explore the various sectors, segments, and classifications of banking based on parameters like products, customers, types, etc.

Type of Banks: Different Types of Banks in India & their Functions

Type of Banks: Different Types of Banks in India & their Functions

This article explains the banking structure in India and how different banks are classified as per RBI Norms. The Indian banking industry has been divided into two parts, organized and unorganized sectors. The organized sector consists of Reserve Bank of India, Commercial Banks and Co-operative Banks, and Specialized Financial Institutions (IDBI, ICICI, IFC, etc.). The unorganized sector, which is not homogeneous, is largely made up of money lenders and indigenous bankers. Learn what we mean by nationalized banks, scheduled banks, public sector banks, private banks, and foreign banks.

Types of Banks: Different Banks & their Classifications (Global)

Types of Banks: Different Banks & their Classifications (Global)

The banking industry caters to various sections of society thus the focus of banking becomes varied, catering to the diverse needs of clients through different products, services, and methods. To meet this, we need distinctive kinds of banks addressing complex business & social needs. In this article, we will explain various types of banking institutions ranging from retail banks, commercial banks, co-operative banks, investment banks, central banks to various other types of specialized banks.

Banking Operations: Understanding Various Transactions & Activities

Banking Operations: Understanding Various Transactions & Activities

Banks perform a variety of operations ranging from basic or primary functions like day to day transactions at a branch to others that maybe the agency or general utility services in nature. The transactions that are incidental to revenue/sales or sustaining the business are an important element of the banking industry value chain. In this article, we will look at the key operations performed in the course of banking.

Banking Industry Business Model - Understanding How the Banking System Works

Banking Industry Business Model - Understanding How the Banking System Works

Banks are commercial profitable institutions and need to increase their business, grow their revenue, and provide returns to their owners. Unlike other stores and shops, banks are providing services rather than selling their products. Learn how banks get their funds and how they make money on services. Read more to learn how the banks earn their profit!

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InterviewPrep

20 Bank Customer Service Representative Interview Questions to Know

Common Bank Customer Service Representative interview questions, how to answer them, and sample answers from a certified career coach.

problem solving examples in banking

Customer service is a critical part of any business, and banks are no exception. That’s why customer service representatives at banks must possess the right combination of skills to provide top-notch service.

If you’re interviewing for a customer service representative role at a bank, it’s important to prepare ahead of time so you can show off your qualifications during the interview. To help you get ready, we’ve compiled some common customer service representative interview questions—along with advice on how to answer them.

  • What experience do you have in customer service?
  • How would you handle a difficult customer who is angry and frustrated with their banking experience?
  • Describe your approach to resolving customer complaints quickly and efficiently.
  • Are you familiar with the different types of bank accounts and services offered by our institution?
  • Explain how you would go about helping a customer open a new account or apply for a loan.
  • What strategies do you use to ensure that customers are satisfied with their banking experience?
  • Do you have any experience working with confidential information such as Social Security numbers or credit card details?
  • How do you stay up-to-date on changes in banking regulations and laws?
  • Tell me about a time when you had to explain complex financial concepts to a customer.
  • What steps do you take to verify customer identity before processing transactions?
  • We want to make sure our customers feel comfortable coming to us if they suspect fraud. How would you respond if a customer approached you with this concern?
  • How do you handle customer inquiries regarding fees, interest rates, and other banking terms?
  • What strategies do you use to build relationships with customers and encourage them to return?
  • Describe your experience using computer systems to process customer requests.
  • How do you prioritize tasks when faced with multiple customer requests at once?
  • What do you do when a customer has an issue that falls outside of your job description?
  • How do you handle customer disputes over charges or fees?
  • What do you do when a customer refuses to follow instructions or comply with policies?
  • How do you keep track of customer interactions and feedback?
  • What strategies do you use to stay motivated and productive during long shifts?

1. What experience do you have in customer service?

Customer service representatives need to be able to handle a variety of customer service tasks. They should be able to problem solve, provide support, and answer questions. By asking this question, the interviewer is looking to get an understanding of your customer service experience and whether you are the right fit for the job.

How to Answer:

Start by providing an overview of your customer service experience. Explain the types of customer service tasks you have handled in the past, such as problem solving, answering questions, and providing support. You can also provide examples of how you have gone above and beyond to provide excellent customer service. Finally, explain why you are passionate about customer service and what makes you a great fit for this role.

Example: “I have five years of experience in customer service roles, both in person and over the phone. I am comfortable handling a variety of customer service tasks such as answering questions, problem solving, and providing support. I’m also very familiar with banking procedures and regulations, which is an asset when helping customers navigate their accounts. Additionally, I’m passionate about delivering excellent customer service and take pride in ensuring that each customer has a positive experience. My past employers have praised my ability to stay calm under pressure and handle difficult conversations with poise.”

2. How would you handle a difficult customer who is angry and frustrated with their banking experience?

This question is designed to assess how well you can manage difficult customer interactions. Your interviewer wants to know that you can remain calm and collected in the face of an angry customer, and that you can take the necessary steps to resolve the issue. They also want to know that you can empathize with the customer while still maintaining a professional and courteous demeanor.

You should be prepared to discuss any customer service experience you have, such as in retail or hospitality. You can also talk about how your interpersonal skills and communication abilities have helped you successfully resolve difficult customer interactions. If you don’t have a lot of direct customer service experience, you can still answer this question by emphasizing the transferable skills that you do possess, such as problem-solving and conflict resolution.

Example: “If I had a difficult customer who was angry and frustrated with their banking experience, I would start by listening to them and trying to understand the source of their frustration. I believe that empathy is key in any customer service situation. After understanding the issue, I would then take the necessary steps to resolve it as quickly and efficiently as possible. I also have strong communication skills which help me stay calm and professional even when dealing with challenging customers. Ultimately, my goal is to ensure that the customer leaves feeling satisfied and respected.”

3. Describe your approach to resolving customer complaints quickly and efficiently.

Banks are in the business of providing customer service and dealing with complaints from customers is a big part of that. Having a clear approach and strategy for dealing with customer complaints quickly and efficiently is key to providing great customer service. This question is designed to assess your ability to handle customer complaints in a professional and timely manner.

Start by talking about your ability to stay calm and professional when dealing with customer complaints. Explain how you take the time to fully understand their issue, empathize with them, and then quickly come up with a solution that is beneficial for both parties. You should also mention any specific strategies or techniques you use to resolve customer complaints, such as using active listening skills, offering alternative solutions, and following up with customers after the resolution has been reached. Finally, talk about how important it is to maintain a positive attitude throughout the process and focus on providing excellent customer service.

Example: “My approach to resolving customer complaints is to remain calm and professional, while still demonstrating empathy for their situation. I take the time to fully understand their issue and then quickly come up with a solution that is beneficial for both parties. To do this, I use active listening skills, offer alternative solutions, and follow up with customers after the resolution has been reached. It’s also important to maintain a positive attitude throughout the process and focus on providing excellent customer service.”

4. Are you familiar with the different types of bank accounts and services offered by our institution?

As a customer service representative, you’ll need to be familiar with the different accounts and services offered by the bank. This is a key question, as it shows that you’re knowledgeable about the bank’s offerings and can help customers find the right solution for their needs.

Before the interview, research the bank’s website and any other materials you can find to learn about their accounts and services. Be prepared to explain what types of accounts they offer (e.g., savings, checking, CDs) as well as any special services that are available. You should also be able to discuss the advantages and disadvantages of each type of account and how customers might use them.

Example: “I’m very familiar with the different types of accounts and services offered by your institution. For example, you offer checking and savings accounts as well as certificates of deposit (CDs). Customers can also access a variety of other services such as online banking, mobile deposits, ATM access, and more. I understand each type of account and how customers might use them to meet their financial goals. I’d be happy to explain any of these options in more detail if needed.”

5. Explain how you would go about helping a customer open a new account or apply for a loan.

This question helps the interviewer understand your knowledge of the bank’s products and services, as well as your customer service skills and understanding of the bank’s policies and procedures. It also shows the interviewer how you handle customer inquiries and how you are able to explain the process in a way that the customer can understand.

Begin by explaining the process of opening a new account or applying for a loan. You should explain each step in detail, including any paperwork that is required and what information you need from the customer. Be sure to emphasize your customer service skills and how you would make the customer feel comfortable throughout the process. Finally, mention any additional services you provide to help customers, such as online banking or financial advice.

Example: “When a customer comes in to open a new account or apply for a loan, I take the time to explain the process step-by-step. I make sure they understand all of the paperwork that is required and what information they need to provide. I also emphasize our commitment to providing excellent customer service throughout the process and answer any questions they may have. Additionally, I can offer additional services such as online banking or financial advice if needed.”

6. What strategies do you use to ensure that customers are satisfied with their banking experience?

The goal of a customer service representative is to provide excellent service and help customers accomplish their goals. The interviewer wants to know that you understand the importance of customer service and can provide a positive experience for customers. They want to know that you have a good understanding of how customers think and how to meet their needs. Additionally, they want to know that you’re aware of the procedures and processes that are in place to ensure customer satisfaction.

Start by talking about the importance of customer service in banking. Explain that you understand that customers are looking for a positive experience and you strive to provide it. Talk about how you use active listening skills to ensure that customers feel heard and understood. Then, discuss any strategies or techniques you have used in the past to ensure customer satisfaction. This could include things like following up with customers after their transactions, taking extra time to explain processes and procedures, or going above and beyond to find solutions to customer problems. Finally, mention your willingness to learn new strategies to ensure customer satisfaction.

Example: “I understand that customer service is incredibly important in banking. I always strive to provide a positive experience for customers by using active listening skills to really understand their needs and goals. In the past, I have used strategies such as following up with customers after their transactions to ensure they were satisfied, taking extra time to explain processes and procedures, and going above and beyond to find solutions to customer problems. Additionally, I’m always willing to learn new strategies and techniques to ensure customer satisfaction.”

7. Do you have any experience working with confidential information such as Social Security numbers or credit card details?

Bank customer service representatives are often responsible for handling confidential information. This question is designed to determine if you are comfortable with the level of security required when dealing with this type of data. Additionally, it will help the interviewer understand if you have any relevant experience that could make you a valuable asset to the team.

Begin by discussing any experience you have working with confidential information. It’s important to emphasize that you understand the importance of keeping this data secure and safe. You should also discuss any security protocols or procedures you’ve implemented in the past to ensure customer data is protected. Finally, be sure to mention any certifications or training courses you’ve completed related to handling sensitive information.

Example: “Yes, I have extensive experience working with confidential information. In my previous customer service role at a bank, I was responsible for handling Social Security numbers and credit card details on a daily basis. I understand the critical importance of keeping this data secure and safe, so I always followed all necessary security protocols when dealing with it. Additionally, I completed a certification course in data protection and privacy to ensure I had the most up-to-date knowledge and understanding of best practices.”

8. How do you stay up-to-date on changes in banking regulations and laws?

Banks are highly regulated, and it’s important for customer service representatives to be aware of the latest rules and regulations that affect banking services. This question is a way for the interviewer to gauge your commitment to staying on top of the latest changes and trends in the industry. It’s also a good indicator of your general knowledge of the banking industry.

You should be prepared to explain the methods you use to stay up-to-date on changes in banking regulations and laws. This could include reading industry publications, attending conferences or seminars, taking online courses, or talking with colleagues. You can also mention any certifications that you have earned related to customer service or banking regulations. Finally, emphasize your commitment to staying informed of the latest developments in the banking industry.

Example: “I stay up to date on changes in banking regulations and laws by regularly reading industry publications and attending conferences and seminars related to customer service and banking regulations. I also take advantage of online courses and certifications related to customer service and banking regulations. Additionally, I stay in contact with colleagues in the banking industry to discuss any new regulations or laws. I am committed to staying informed about the latest developments in the banking industry so that I can provide my customers with the best possible service.”

9. Tell me about a time when you had to explain complex financial concepts to a customer.

In order to do well in this position, you need to be able to explain complex financial concepts to customers in ways they can understand. This question helps the interviewer get a better sense of your ability to do this. It also helps the interviewer to understand how well you can simplify complex concepts and make them more accessible to customers.

When answering this question, you want to provide a specific example of when you had to explain complex financial concepts to a customer. You can talk about the concept itself and how you explained it in simple terms so that the customer could understand it. Be sure to emphasize any positive outcomes from your explanation, such as the customer being able to make an informed decision or feeling more confident about their finances.

Example: “Recently, I had a customer come in who wanted to open a checking account. They were unfamiliar with the process and the fees associated with it. I took the time to explain each fee and what it was for. I used simple terms and analogies to help the customer understand the fees and the process of opening a checking account. The customer left feeling more informed and confident about their decision and was able to open the account without any issues.”

10. What steps do you take to verify customer identity before processing transactions?

It’s important for banks to have security protocols in place to ensure that customer information is safe and secure. This question is a way to gauge whether the candidate understands the importance of proper customer identification and security protocols. It also allows the interviewer to assess the candidate’s knowledge of the banking industry and their ability to follow procedures.

To answer this question, I would explain that verifying customer identity is a key part of processing transactions. As a bank customer service representative, it’s important to ensure that the person requesting to make a transaction is who they say they are and has the authority to do so. To verify customer identity, I take steps such as asking for identification documents like a driver’s license or passport, confirming their address and phone number, checking signatures on forms, and running background checks if necessary. Additionally, I always ask customers to confirm personal information such as name, date of birth, and account numbers before completing any transaction.

Example: “I take customer identity verification seriously and understand that it’s an important part of processing transactions. As a customer service representative, I always ask for valid identification documents that match the customer’s name, address, and other information. I also confirm personal information such as name, date of birth, and account numbers before completing any transaction. Additionally, I always check signatures on forms and run background checks if necessary. I take these steps to ensure that customer information is secure and that transactions are legitimate.”

11. We want to make sure our customers feel comfortable coming to us if they suspect fraud. How would you respond if a customer approached you with this concern?

Banks have a responsibility to protect their customers from fraud, and customer service representatives are often the first line of defense. This question is meant to gauge your ability to handle customer concerns and show empathy while also providing accurate and helpful information. The interviewer wants to know that you can respond to this type of situation in a professional and knowledgeable manner.

Start by expressing empathy and concern for the customer’s situation. Then, explain that you take fraud very seriously and provide a few steps that they can take to protect themselves. You could suggest that they contact their financial institution right away if they suspect any fraudulent activity on their accounts, as well as monitoring their credit reports regularly. Finally, let them know what resources are available to them in case they need additional help or have further questions.

Example: “I understand that this is a concerning situation and I want to make sure you feel comfortable coming to us. Fraud is a serious issue and I take it very seriously. I would suggest that you contact your financial institution right away if you suspect any fraudulent activity on your accounts. Additionally, I would recommend that you monitor your credit reports regularly for any suspicious activity. We also have a number of resources available to help you if you need additional help or have further questions.”

12. How do you handle customer inquiries regarding fees, interest rates, and other banking terms?

As a customer service representative, you’ll be expected to be able to explain the terms of the bank’s services to customers in a way that is clear and concise. You’ll need to be familiar with the bank’s policies and procedures in order to properly answer customer inquiries. This question helps the interviewer understand your experience with banking terms and your ability to communicate them to customers.

To answer this question, you should start by discussing your experience with the bank’s services and policies. If you have any prior banking experience, mention it here. Then, talk about how you approach customer inquiries regarding fees, interest rates, and other banking terms. Do you take the time to explain them in detail? Or do you provide quick summaries that get the point across? Make sure to emphasize your communication skills and ability to effectively explain complex topics in a simple way.

Example: “I have several years of experience working in banking and am very familiar with the various fees, interest rates, and other banking terms. When customers come to me with questions, I take the time to explain the terms in detail, using simple language that they can understand. I also provide additional resources, such as online tutorials or brochures, if they need more information. I’m very patient when it comes to customer inquiries, and I make sure that they understand the answers before moving on to the next question.”

13. What strategies do you use to build relationships with customers and encourage them to return?

Customer service representatives need to be able to build relationships with customers and make them feel comfortable coming back to the bank. The interviewer wants to know that you understand the importance of customer relationships and know how to foster those relationships. They’ll also be looking for specific strategies you have used in the past to build relationships and encourage customer loyalty.

To answer this question, think about the strategies you have used in past customer service roles. You can talk about how you go out of your way to make sure customers feel heard and respected, how you follow up with them after they’ve visited the bank, or how you provide personalized advice that is tailored to their individual needs. Additionally, if you have experience using technology to build relationships with customers, such as creating customer profiles or sending automated emails, be sure to mention those too.

Example: “I think the key to building strong customer relationships is to make them feel heard and respected. I always take the time to thoroughly listen to customers and ask questions to ensure I understand their needs. I also make sure to follow up with customers after their visits to the bank to see if there is anything else I can do for them. Additionally, I like to provide personalized advice that considers their individual goals and needs. I have also used technology to build relationships, such as creating customer profiles and sending automated emails with helpful tips and advice.”

14. Describe your experience using computer systems to process customer requests.

Banks use computer systems to process customer requests, and customer service representatives are expected to be fluent in using them. This question is designed to gauge your technical knowledge of the systems used by the bank and your ability to use them quickly and accurately. It’s also a way for the interviewer to get a sense of your problem-solving skills and how you handle stressful situations.

Start by giving an overview of your experience with computers and the systems you’ve used. Talk about any certifications or courses you’ve taken that are related to computer use, as well as any projects you’ve completed using a computer system. Be sure to mention any customer service-related software programs you’re familiar with. Then provide examples of how you’ve used these skills in a previous role. If you don’t have direct experience, talk about how you would approach learning a new system quickly and efficiently.

Example: “I have extensive experience using computer systems to process customer requests. I’ve used a variety of customer service software programs, including Microsoft Dynamics, Salesforce, and Oracle. I’m also proficient in navigating the internet and using email for customer service inquiries. At my previous job, I used these systems to process customer orders, address customer inquiries, and troubleshoot technical issues. I was also able to quickly learn a new system when my employer switched to a different customer service software program. I’m confident in my ability to learn new systems quickly and efficiently and use them to provide excellent customer service.”

15. How do you prioritize tasks when faced with multiple customer requests at once?

The banking industry is all about customer service, and as a customer service representative, you’ll be expected to be able to handle multiple customer requests at one time. This question allows the interviewer to gauge your ability to multitask, prioritize, and problem-solve in a fast-paced environment. It also shows that you understand the importance of customer satisfaction and can handle difficult situations with professionalism and grace.

Start by talking about how you would assess the urgency of each customer request. Explain that you would prioritize requests based on their importance, potential impact, and time sensitivity. You can also mention specific strategies you use to stay organized when faced with multiple tasks at once, such as making a list or using task management software. Finally, emphasize your commitment to providing excellent customer service and explain how you go above and beyond to ensure customer satisfaction.

Example: “I prioritize customer requests based on their urgency and potential impact. I start by assessing the importance of each request and then determine which ones need to be addressed immediately. I also use task management software to keep track of customer requests and ensure that none slip through the cracks. I take customer service very seriously and strive to provide a positive experience for each customer. I’m always willing to go the extra mile to make sure that their needs are met and that they are satisfied with the service I provide.”

16. What do you do when a customer has an issue that falls outside of your job description?

While customer service representatives usually have a set of tasks they’re responsible for in a given day, there are times when customers will have needs that don’t fit within those tasks. It’s important for customer service representatives to be able to recognize those needs and work to resolve them, even if it falls outside of their job description. This question will give the interviewer an idea of how you handle any issue that comes your way.

You want to show that you can think on your feet and are willing to go the extra mile for customers. Explain how you would assess the situation, determine what resources or help you could provide, and then take action. You should also explain how you’d communicate with the customer throughout the process so they know their issue is being taken seriously. Finally, emphasize that you understand the importance of following through on any promises made to ensure customer satisfaction.

Example: “When a customer has an issue that falls outside of my job description, I take the time to listen and understand their issue. I assess the situation to determine what resources or help I can provide, and then take action. I make sure to communicate with the customer throughout the process to keep them informed and make sure they know their issue is being taken seriously. I understand the importance of following through on any promises I make to ensure customer satisfaction. I always strive to provide the best customer experience possible.”

17. How do you handle customer disputes over charges or fees?

Banks often have a lot of rules and regulations in place when it comes to how customers can use their services, and these can be confusing to customers. It’s important for customer service representatives to be able to explain these rules to customers in a way that’s both clear and understandable, and to be able to resolve disputes in a way that’s fair to both the customer and the bank. This question shows that the interviewer wants to know you can handle these situations calmly and professionally.

You should explain that you would first listen to the customer’s concerns and try to understand their point of view. You can then explain that you would review the bank’s rules and regulations to determine if the customer is correct or not. If the customer is in the wrong, you should explain why in a way that is both clear and empathetic. If the customer is right, you should be able to explain what steps need to be taken to resolve the issue. In either case, it’s important to remain professional and courteous while advocating for both the customer and the bank.

Example: “When a customer disputes a charge or fee, I believe it’s important to empathize with the customer and understand their point of view. I will then review the bank’s rules and regulations to determine if the customer is correct or not. If the customer is in the wrong, I explain why in a way that is both clear and empathetic. If the customer is right, I explain what steps need to be taken to resolve the issue. In either case, I remain professional and courteous while advocating for both the customer and the bank. By doing this, I can ensure the customer is satisfied and that the bank’s policies are followed.”

18. What do you do when a customer refuses to follow instructions or comply with policies?

Banks have strict rules and regulations that must be followed to ensure the security of their customers and their financial information. In some cases, customers may not understand or agree with these policies, and it is the job of the customer service representative to enforce the rules in a courteous and professional manner. Interviewers want to know that you are capable of dealing with difficult customers and enforcing the policies of the bank.

Start by explaining that you understand the customer’s frustration, but it is important to remain professional and explain why the policy must be followed. Explain that you would use your problem-solving skills to try to find a solution that meets both the customer’s needs and the bank’s policies. If all else fails, you would have to inform them that they need to comply with the bank’s rules in order to continue doing business with the bank.

Example: “When a customer refuses to follow instructions or comply with policies, my first priority is to remain professional and courteous. I understand that customers may be frustrated, so I always take the time to explain why the policy must be followed. I also use my problem-solving skills to try to find a solution that meets both the customer’s needs and the bank’s policies. If all else fails, I inform them that they need to comply with the bank’s rules in order to continue doing business with the bank. I always strive to ensure that customers have the best experience possible, even when it may not be the outcome they wanted.”

19. How do you keep track of customer interactions and feedback?

Banks are highly regulated and many customer interactions must be tracked and recorded for compliance. An interviewer wants to know that you understand the importance of keeping accurate records and that you’re comfortable with the process. They’ll also be looking to see if you have any creative ideas on how to improve the customer experience.

Talk about how you use customer relationship management (CRM) software to keep track of customer interactions and feedback. If you’ve used any other systems or tools for this purpose, be sure to mention those as well. Additionally, discuss any processes that you have in place to ensure accuracy when tracking customer information. Finally, if you have any ideas on how to improve the customer experience through better record-keeping, now is a great time to share them!

Example: “I use customer relationship management (CRM) software to record customer interactions and feedback. I also have processes in place to ensure accuracy when tracking customer information. For example, I always double-check that the customer’s information is entered correctly and that their feedback is accurately recorded. Additionally, I make sure to follow up with customers after their interactions with me to make sure they’re satisfied with the service they received. Finally, I’m always brainstorming ways to improve the customer experience, such as automating certain processes or utilizing customer feedback to make informed decisions.”

20. What strategies do you use to stay motivated and productive during long shifts?

Working in customer service can be a challenge, especially if you’re dealing with long shifts and difficult customers. It’s important that you’re able to stay motivated and productive in order to provide the best possible service. An interviewer will want to know that you have the skills and strategies to stay focused, even when the work day seems to drag on.

To answer this question, think about the strategies you have used in the past to stay motivated and productive while on the job. You could talk about how you set goals for yourself throughout the day, take short breaks between customers, or use music to keep your energy up. Additionally, you can explain that you focus on providing quality customer service by listening carefully to each customer’s needs and doing whatever it takes to ensure their satisfaction. Showing that you are able to remain focused and positive even during long shifts will demonstrate your commitment to customer service excellence.

Example: “I have several strategies that I use to stay motivated and productive during long shifts. I always make sure to take short breaks throughout the day to give my mind and body a chance to rest and recharge. Additionally, I like to set small goals for myself throughout the day so I can take pride in my accomplishments. When I’m feeling particularly tired or overwhelmed, I listen to music to help keep me focused and energized. Most importantly, I always strive to provide the best possible customer service by listening carefully to each customer’s needs and doing whatever it takes to ensure their satisfaction. I find that maintaining this focus and positive attitude helps me stay motivated and productive, even during long shifts.”

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  1. 7 Steps to Solve the Right Problems in Banking More Efficiently

    The solution: stagger the checkout to reduce peak load times. The cost of this solution was $800 to design a new system that could be implemented in 24 hours. By reframing the problem, you arrive at a more efficient solution set. Exploring Solution Sets To Banking - The Chime Case Study

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    For example, referrals allow institutions to provide a deeper level of service by better understanding their customers' or members' needs. Referral-and-reward programs — which benefit both employees and customers — are a great way to incentivize your team to deliver excellent customer service. 2. Optimizing the mobile experience

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  24. 7 Steps to Solve the Right Problems in Banking More Efficiently

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