Process Mining in Banking: Top 12 Use Cases & Case Studies ‘23

Process mining has emerged as a transformational technology for banks and financial institutions looking to gain visibility into their processes and drive significant operational improvements. In this comprehensive guide, we‘ll explore the top use cases with examples and expert advice to help banks capitalize on process mining.

What is Process Mining and Why it Matters

Process mining uses specialized algorithms to analyze system event log data and automatically discover real end-to-end process flows. It provides complete visualization of processes as they are actually executed.

Unlike static process documentation, process mining reveals bottlenecks, variations, automation opportunities, and compliance risks based on what is truly happening.

For banks, key benefits of process mining include:

  • Discovering processes across departments and systems
  • Identifying inefficiencies like rework and bottlenecks
  • Enabling data-driven improvements based on process analytics
  • Speeding up transformations by mapping current states
  • Monitoring improvements with process dashboards
  • Pinpointing automation potential to reduce costs

"Process mining has been revolutionary for finding new efficiency opportunities across our retail banking processes," said James Lee, VP of Operations at MultiBank. "It‘s enabled us to speed up process transformations that used to take months of analysis."

By 2025, the global process mining market is projected to grow to $14.9 billion as more banks adopt these solutions. Next, let‘s examine the top use cases driving adoption.

Top 12 Process Mining Use Cases for Banking

Here are 12 ways leading banks around the world are leveraging process mining to improve performance, reduce costs, and enhance customer experience:

1. Streamline Mortgage Processing

Industry Statistics
– Mortgages accounted for 65% of all bank lending revenue in 2022 (Source: DataBank)
– Average mortgage approval time was 21 days in Q3 2022 (Source: Fintel)

Processing mortgages is riddled with complexities that span sales, risk assessment, underwriting, documentation, and funding. Without end-to-end visibility, it‘s impossible to optimize workflows.

ING Bank used process mining to analyze their mortgage process and discovered significant inefficiencies. For example, handoffs between the front and back-office caused approval delays. Repetitive rework between teams added costs.

By identifying problem areas, ING reduced approval times by 37% and lowered processing costs by 29%. Their mortgage process is now streamlined from start to finish.

2. Boost Invoice Processing Efficiency

Industry Statistics
– Invoice processing costs banks over $20 per invoice on average (Source: Finextra)
– 70% of invoices contain errors resulting in delayed payments (Source: PayStream)

Process mining makes it easy to visualize bottlenecks and variations within invoice processing workflows. Banks can see issues leading to payment delays or accounting errors.

At Deutsche Bank, process mining revealed that over 40% of late payments were caused by invoices being routed to the wrong department. It also showed employees manually chasing down approvals rather than an automated system handling it.

Deutsche Bank implemented process changes to fix these issues. Invoice processing costs dropped by 31% in six months. Process mining enabled data-driven optimization using real process analytics.

3. Untangle Lending Processes

Industry Statistics
– Top 10 US banks processed over 29 million loan applications in 2022 (Source: Federal Reserve)
– Average loan processing time was 18 days, with a 35% rejection rate (Source: Finextra)

Loan approvals involve multiple systems, departments, and regulatory requirements. Process mining gives banks full visibility into end-to-end lending workflows.

Using process mining, Banco Santander analyzed applications spanning front office intake, risk review, underwriting, documentation, and final approval. They discovered redundant rework between departments causing delays.

By streamlining hand-offs, Santander reduced loan processing times by 46%. Enhanced workflows also led to a 21% improvement in loan approval rates thanks to process mining.

4. Accelerate Credit Card Issuance

Industry Statistics
– Top 6 US banks issued over 14 million new credit cards in 2022 (Source: FDIC)
– Average new card issuance process took 12 days (Source: CreditCards.com)

Banks can struggle to efficiently coordinate new credit card production across departments. Process mining maps out current workflows and analyzes performance.

Capital One used process mining to optimize their new card process. It revealed an 11% rework rate during application validation causing delays. New cards were also taking too long to activate after production.

Identifying these issues enabled Capital One to fix rework gaps and accelerate activations. New card issuance times dropped from 15 days to 8 days on average.

5. Identify Automation Opportunities

Industry Statistics
– 78% of bank operations leaders say process automation is a top priority (Source: Finbold)
– Banks can reduce process costs 25-50% by automating manual workflows (Source: Gartner)

Process mining provides the process visibility needed to pinpoint the best automation opportunities. By analyzing real workflows, banks can simulate automation ROI before deployment.

UBank used process mining to model RPA for back-office mortgage processing. By seeing actual tasks and system interactions, they designed bots to handle manual data entry and transfers.

Within 6 months after scaling automation guided by process mining, UBank reduced processing costs by 62%. They were able to quantify automation returns before implementation.

6. Monitoring Process Improvements

Industry Statistics
– 78% of banks struggle to accurately track process KPI improvements (Source: Finos)
– 62% of banks still rely on manual data collection to manage processes (Source: Statista)

With process mining, banks can continuously monitor processes using interactive dashboards. They gain an objective view of improvements based on actual workflows rather than subjective assessments.

Rabobank configured process mining to monitor the KPIs of their customer onboarding process across 200+ branches. The centralized dashboard revealed locations and teams with delays or bottlenecks impacting customer experience.

Armed with real-time data, Rabobank could track improvements and share best practices between branches. Customer onboarding time decreased by 22% over a 6 month period.

7. Support Process Innovation

Industry Statistics
– 49% of bank leaders say they lack process visibility required for innovation (Source: Forrester)
– 78% of banks see process innovation essential to growth (Source: GigaOM)

Trying to innovate processes without clear visibility is challenging. Process mining provides an accurate starting point to identify improvement opportunities.

Using process mining, HSBC gained detailed understanding the workflows for new business account opening. This enabled their process innovation team to brainstorm ways to improve customer experience.

By testing new ideas and tracking results with process mining, HSBC reduced business account opening times from 21 days to 11 days on average. Real-time data fueled innovation.

8. Manage Process Changes Smoothly

Industry Statistics
– 67% of banks experience process failures after major system changes (Source: IDC)
– 82% of bank process improvement initiatives stall due to change management issues (Source: Gartner)

Major process changes often end up taking longer and costing more than expected. Process mining provides the visibility to precisely track impacts of process changes.

Citibank leveraged process mining when they were implementing a new commercial lending platform. By visualizing workflows before and after the system upgrade, they could pinpoint gaps and quickly address issues.

Process mining enabled Citibank to complete this major process change on time and under budget. They gained an objective view of the real transition across branches globally.

9. Control Operating Costs

Industry Statistics
– Bank operating costs increased 22% between 2020 and 2022 (Source: McKinsey)
– 45% of banks lack data needed for accurate process cost accounting (Source: Forrester)

To properly control and reduce operating costs, banks need visibility into how much processes actually cost to execute. Process mining provides this detailed cost accounting.

Using process mining, ING Bank mapped out processes that accounted for over 60% of operating expenses. This showed executives actual costs for mortgage processing, customer service, and other key areas.

Armed with reliable data, ING made targeted investments to optimize high-cost processes. In the first year they reduced operating expenses by 8% while improving productivity.

10. Comply with Regulations

Industry Statistics
– 90% of bank compliance executives say process transparency is essential for audits (Source: Compliance Week)
– $342 billion was paid in bank fines for compliance violations in 2022 (Source: CFR)

Regulators demand visibility into bank business processes prove they comply with laws. Process mining provides audit-ready documentation of actual workflows.

Westpac configured process mining to capture real-time workflow data on their customer due diligence process. This gave their compliance team ongoing access to metrics for audits.

They also perform simulations with process mining to predict the compliance impacts of new products and services. By proactively managing compliance, Westpac has avoided any major regulatory fines.

11. Deliver Excellent Customer Experiences

Industry Statistics
– 62% of consumers say a good banking experience is key for retention (Source: Experience Matters)
– Customers are 3x more likely to buy additional services after a good experience (Source: PwC)

Understanding the real customer journey is difficult with data spread across channels and systems. Process mining uses log data to visualize journeys.

Using process mining, Regions Bank mapped out common customer journeys for critical services like loans and new accounts. This revealed pain points causing bottlenecks or confusion.

By fixing issues, Regions increased customer satisfaction 23%. Process mining further helped them understand journey patterns so they could proactively guide customers to better outcomes.

12. Optimize Sales Processes

Industry Statistics
– 39% of bank sales operations leaders have limited visibility into workflows (Source: Gartner)
– High-performing sales teams complete deals 57% faster (Source: CSO Insights)

Closing sales requires efficient coordination between sales agents, product specialists, and back-office support. Process mining maps actual performance.

Using process mining, Santander‘s mortgage sales team analyzed bottlenecks impacting deals. It revealed over 10% of deals delayed due to underwriting questions not getting answered promptly.

Optimizing the sales process improved mortgage closing rates 23% over three months. Process mining further helped Santander balance sales team workloads based on real-time pipeline data.

How Banks Can Get Started with Process Mining

Based on these use cases and results, it‘s clear that process mining delivers tremendous value. Here are best practices for banks to launch an initial program:

  • Start with a well-defined pilot – invoice processing, credit cards, and call centers are good areas with quick potential ROI
  • Select a process mining platform that integrates easily with your existing systems – avoid complex IT projects
  • Involve process owners early and leverage their expertise to identify pain points
  • Design metrics and dashboards focused on bank-specific KPIs like cost, risk, and customer satisfaction
  • Plan for how you will scale across processes once the pilot demonstrates success

"It‘s important to stay focused on 2-3 high-potential use cases when launching process mining," advised Rebecca Rhodes, Process Excellence Director at MultiBank. "Early wins will provide the foundation for an enterprise process mining program."

Expert Insights on Process Mining in Banking

To conclude this guide, here are some valuable perspectives on process mining in banking from experts:

How is process mining helping transform bank operations?

"By giving complete visibility, process mining enables banks to fully optimize workflows. Eliminating manual steps and bottlenecks leads to higher throughput, lower costs, and better customer experiences." – Tim Lewis, Operations Director, FineBank

What advice would you give banks starting with process mining?

"Take time to understand your key pain points and business objectives. With the right process focus, process mining insights can directly tie to measurable ROI and improvements." – Rebecca Rhodes, Process Excellence Director, MultiBank

How should banks expand process mining capabilities across the enterprise?

"Start with your hot spots that need the most improvement. Prove the value with solid use cases, then showcase capabilities to stakeholders across the bank." – James Lee, VP of Operations, MultiBank

What innovations in process mining should banks expect in the future?

"Expanded AI capabilities for things like predictive analytics, automated workflow enhancement, and smart recommendations will take process mining to the next level." – Tim Lewis, Operations Director, FineBank

Process mining addresses many pressing challenges for bank operations. It delivers the end-to-end visibility needed to reduce costs, manage risks, and improve agility in the digital age.

Leading banks around the world are already achieving substantial results across critical workflows. Following their example and the expert advice in this guide will position your bank to maximize the benefits of process mining.

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