Sean Hutchins | Credit Administration/Special Assets | Pacific Western Bank
Whenever a bank makes a significant change in its processes, whatever that might be, regulators and stakeholders will ask why. According to Sean Hutchins, whose bank recently completed a merger with an $8 billion bank, successful process changes as well as explaining those changes to regulators, involve four critical elements: define the problem, implement the solution, evaluate the solution and document “almost everything.” In a process change, the bank needs to rationalize and document the movement before and after the change. Why is the process being changed: What are the needs that drive the changes? Who is involved? How is being done? How do we know it works?
Actions and documentation include defining the problem or need, the solutions that are considered, the solution that was chosen and why. They also include how the solution was implemented, any changes in the implemented process along the way, and a discussion of how the new process solves the problem.
Of importance in creating the new process and documentation is understanding what it means to stakeholders and the audience, meaning anyone who will read the documentation. That involves several elements, including having a shared mental image of the change with stakeholders (for which charts, photos, etc., are useful) and being aware of unintendedconsequences.
There are three critical documentation tools that can be used as standalone reference and as a basis for ongoing documentation as needed:
- Timeline – what needs to be done by whom, by when, before what
- Change Implementation Folder – executive summary of process overview, statement of theproblem, alternative solutions, the selected solution, the due diligence, the implementationplan, support documentation, testing and validation. (The executive summary shouldbe written to address the primary audience, such as whether they would prefer a briefoverview or a detailed description of everything involved in the process change.)
- Process methodology folder – process description, scope, implementation, thewho-what-where-when, calculations, data and resource needs, output, testing andvalidation, changes/modifications/upgrades, and appendices referencing criticalelements of the process.