BBVA Argentina improves its foreign trade operations using IBM Process Mining.
When the economy of a large nation depends on your work, there’s already great pressure to achieve efficiency while maintaining strict regulatory compliance. But what if the regulations suddenly change? And then they change again. And again. This was the hand dealt to BBVA Argentina and the bank found a way to navigate the changes and accelerate its processes.
Foreign trade is a major component of Argentina’s economy. In 2021, imports and exports combined to represent 45% of the country’s gross domestic product (GDP) – according to INDEC, the National Institute of Statistics and Census of Argentina.
And BBVA, the country’s oldest private bank, is a leading engine of Argentina’s foreign trade transactions.
So, when the COVID-19 pandemic and the war in Ukraine precipitated rapid economic changes around the world, prompting the Central Bank of Argentina to implement new, emergency regulations on foreign trade, BBVA and its competitors had very little time to adapt.
“We have had so many modifications to our processes caused by the changes in foreign trade rules and government pressure in the country,” said Leonardo Rojas, BBVA Argentina’s Head of Operations.
On a typical day, analysts on the bank’s Foreign Trade Operations team process more than 400 trade-related transactions, many for corporate customers and some valued in the millions of dollars. The new regulations required companies to present additional documentation and justifications before making payments abroad, which in turn necessitated numerous new control processes for BBVA.
The processes were so new, they needed to be done manually. Overall transaction processing time jumped to five or six days, when BBVA wanted to limit it to two.
“International trade operations are carried out with US dollars,” said Rojas.
“The exchange rate between US dollars and Argentine pesos fluctuates so much that it is important to complete the operation quickly.
“For each day it takes to process, the costs for the client could increase due to the rate changes.”
And adding more headcount was not a viable option.
“Applying more complex controls meant more workload for the team,” said Rojas.
“But adding more analysts would result in higher operating costs and higher commissions for our customers. The market for foreign trade analysts is scarce, and it is a highly demanded profile.”
Rojas and coworker Mauricio Vidaurrázaga, Head of Business Execution and Process Engineering, wanted to try to regain efficiencies by optimizing processes.
They suspected that unintentional rework occurred while the team performed all of the newly mandated checks and controls on top of their traditional processes. But they needed a way to pinpoint exactly where this was happening.
In November 2021, Rojas and Vidaurrázaga launched BBVA’s Foreign Trade Process Reengineering Project and tested several process mining tools.
A demo of IBM Process Mining software convinced them that they’d found their solution and they engaged the IBM Customer Success team for help implementing the software on IBM Cloud to avoid any hardware constraints at the bank.
The IBM and BBVA teams also containerized the Process Mining software on the Red Hat OpenShift on IBM Cloud platform.
As a first step in the reengineering project, Rojas, Vidaurrázaga and the team obtained event logs of BBVA’s foreign trade system from the BBVA IT team and fed the data into the Process Mining tool, generating a visual map of the foreign trade processes that showed every step and indicated typical as well as atypical process flows.
The tool’s analytics also provided statistics about process time and efficiency and offered recommendations for improvements. “We’d suspected there was a lot of rework but we didn’t know exactly where or when or how much impact it was having,” said Vidaurrázaga.
“Process Mining let us put real data to our perception. We could actually see when and where teams were repeating tasks, and we could quantify the impact and start analyzing the root causes.”
They also uncovered bottlenecks. A major one related to a step in the process that relied on a Central Bank verification service available only between 8am and 5pm.
BBVA measured the impact of this restriction and re-ordered process tasks to minimize the number of verifications getting pushed to the next day.
And they used the tool to better align processes to the behavior of demand.
“We saw more clearly that the arrival of new operations has a behavior curve that follows the working hours of client companies. It is normally low in the early morning, rises from 10 AM to noon, stays high until 3pm and then declines. This helped us design better workload distribution on the team.”
All this process analysis could have taken weeks, had the BBVA team attempted it manually. Instead, it took a couple of days and automatically generated insights that the bank used to make valuable improvements.
BBVA reduced the processing time for foreign trade transactions by more than 70% – from five or six days to one or two.
“We also gained in terms of team productivity,” said Rojas.
“We can process 20% more transactions while still complying with all regulatory requirements, and without expanding the team.”
And if regulations change again tomorrow, BBVA will be prepared.
“With what’s happening in the economy and having the capacity to keep up with all the changes, Process Mining was essential for our clients and us in a context where the acquisition and the currency rate change every day. We can analyze processes faster than ever before,” said Rojas.
BBVA will continue to apply Process Mining to identify opportunities for greater efficiency, and not just in foreign trade.
“We’re getting requests from other teams – they want to do what we’ve done,” said Vidaurrázaga.