Academic journal article Asian Social Science

Exploring the Implementation of Business Process Reengineering in Banks

Academic journal article Asian Social Science

Exploring the Implementation of Business Process Reengineering in Banks

Article excerpt

Abstract

The changing dynamics of banking and business environment forced banks to re-engineer their operational process for fantastic business performance. The bank operational process which is intended to meet emerging challenges of bank consolidation, operating cost containment, improvement of customer service and increase revenue call for innovative banking practices through Business Process Re-engineering. This is to enable Nigerian banks to incorporate strategic innovative customer schemes in order to bridge the service gap inherent in a Nigerian banking sector. The broad objectives of this study are: 1) to determine the current status of an operational process reengineered in the Nigerian banks; and 2) To determine the most organizational objective of BPR implementation in Nigerian banks. Self-delivery and collection of data strategy with help of research assistants were used to in this study. Out of 560 questionnaires distributed to the sampled banks, 417 were returned representing 74% rate. First, the study found that Nigerian banks surveyed have re-engineered their branch operations, customer services, cash tellering services, cheque's clearing, domestic fund transfer, loan processing, credit administration and appraisal. In addition, 21.3% of the banks surveyed have reengineered their services with respect to foreign operations, process for letter of credit, Western Union/MoneyGram money payment and wire transfer to a fund through SWIFT and other electronic channels. Second, the result showed that 24.7% of the surveyed banks agreed that enhancement of profit is the most objective of BPR implementation. These followed closely by 23.3% of the surveyed banks that are of the opinion that improvement over the quality of customer service is the most objective of BPR adoption. Furthermore, 20.4%, 11.5% and 12.9% of the survey banks are of the opinion that organisation objective of BPR adoption was to either be proactive, reactive for future/current challenges, competitive pressure being faced as a result of globalization and deregulation of the financial sector or to reduce operating cost respectively. The outcome from this study provides important insights to both managers and researchers for further understanding about the objectives of BPR adoption, and the operational processes reengineered by the banks. The necessary suggestions on new area of research were recommended for future study.

Keywords: business process reengineering (BPR), operational processes, banks, Nigeria

1. Introduction

The globalization of the banking services gave rise to the demand for quick service delivery in financial service segment (Randle, 1995). The liberalization of the banking sector and high-technology capability have necessitated the financial service outfits to engage in process reengineering. This brought about revolutionary changes in efficiency and accuracy to meet the customer's requirement. The consequences of liberalisation, deregulation and presence of high-technology capacity in small and medium banks help to streamline the back office operational processes to improve both efficiency and cost reduction (Aregbeyen, 2011). Advances in technology influence the way banks' services are delivered with the aim of making them more convenient for customers. Central Bank of Nigeria (CBN) initiated business process reengineering (BPR) project tagged EAGLES (Efficiency, Accountability, Goal orientations, Leadership, Effectiveness and Staffmotivation). The objective is to enhance the operational processes and service quality delivery of banks (CBN, 2009). The CBN in partnership with PricewaterhouseCoopers conducted a comprehensive assessment of the bank's core and non-core operations that required fundamental restructuring for internal transformation such as customer service delivery, regulatory function of the CBN, performance management & benchmarking, information technology (IT), customer satisfaction, human resources and administration and communication effectiveness at all stakeholder levels (CBN, 2009). …

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