Environmental, social and governance (ESG) concerns have become increasingly important for investors over the years. But recently it has become top priority for customers and employees, too. With this increased pressure to be seen to be doing good, financial institutions are looking for new ways to improve their ESG credentials. However, finding ways to boost these efforts aren't always easy wins, and organizations need help to work out where improvements can be made – this is where transformative business process optimization (BPO) can help.

In this episode of Financial Futures, learn how transformative BPO is helping financial institutions to not only streamline processes and find new efficiencies, but also how it is facilitating organizations' ability to meet their ESG goals. Debunk some of the myths around BPO and explore a real-life example of one institution's journey to better ESG through transformative BPO.

Join Simon Penny, sales lead of Business Process Transformation and Resourcing at FIS®, and FIS SVP Banking and Payments Europe, Silvia Mensdorff-Pouilly, as they discuss why ESG is so top of mind for everyone from investors to customers, and why good ESG starts with a thorough self-assessment of processes.

Keep reading to explore the highlights and listen to the full episode.

Defining ESG

ESG stands for environmental, social and corporate governance. The environmental aspect includes issues such as carbon footprint, water footprint, renewable energy and recycling. For digital services like FIS, the environmental footprint may be relatively small, but you can still look at your data centers and set goals such as net zero emissions. The social aspect includes supporting local communities and ensuring that diversity – in culture, gender, sexual orientation, religious diversity and other factors – is present and celebrated within your company environment as well as your suppliers. Governance involves overseeing company leadership in matters such as executive pay, audits and shareholder rights.

The importance of ESG

ESG is becoming a priority across the board. Employees want to know that they're working for organizations that are trying to better the world, and it will be a determining factor in the current war for talent. Customers and investors want to know that their money isn't being spent in socially or environmentally harmful ways. If financial institutions and other companies want to grow their customer base, carry on finding the best talent in the future and continue to secure investment, they can’t ignore ESG.

Improving ESG with BPO

When people think of BPO, they often picture laying off colleagues and moving work to other parts of the world where labor is cheaper but the quality may be harder to control. However, transformative BPO focuses on making processes cheaper, quicker and more sustainable by optimizing mundane tasks (which employees don’t typically enjoy and where risk of error is high) and getting the most value from your workforce. Rather than simply performing the same processes in an offshore location, transformative BPO involves taking a holistic look at processes and finding ways to simplify and standardize them. BPO can help companies ensure that their processes are well-governed, display social responsibility, meet regulatory obligations, create positive working conditions for employees and delight customers.

The BPO journey

Every business has people, processes and technology. If those things work harmoniously, the business is successful. Other businesses struggle because those elements don’t work harmoniously, and the company has no vision for how to improve. A transformative BPO vendor like FIS looks at that operational ecosystem to identify the holes, understand the root causes, develop a resolution for each and prioritize the changes. The goal is to have as few moving technical parts as possible and to ensure that each part is fit for purpose and works with the current climate of the business. BPO also looks at the people who work with a particular process to ensure that they are empowered and supported.

BPO in the real world

FIS worked with a large international bank with activity in 37 different countries. Because the teams across those countries had not been aligned and didn’t have visibility into each other’s agendas, they had built several different systems to process the same work. The bank had an antiquated and complex estate that cost more to run than it should have. By aligning their staff to work centrally and collaboratively instead of in silos, FIS built a common process that still accommodated each country’s jurisdictional or local requirements. The bank’s cost base was reduced by US$13 million year-on-year, and the workforce surrounding that process was scaled down with those employees being moved into higher value, customer-facing positions. Less technology also meant less of an impact on the environment through the lowered use of electricity in operational centers.

Evaluating your ESG strategy

A successful ESG strategy depends on your industry. The financial industry has seen a lot of regulation in recent years around anti-money laundering and fraud to ensure that money doesn’t move to the wrong people. Companies need to have more vulnerable leadership in the boardroom because topics like diversity and sustainability can be sensitive and difficult. Talking openly about where your company’s ESG strategy is currently and how you plan to improve helps to create a culture where ESG becomes part of every conversation.