A financial institution engaged in mortgage lending has embarked on a business process improvement initiative to eliminate the activities that hinder growth to ultimately improve the success rate of its mortgage business. As a benchmark for identification, the institution is keen on improving any business process that has less than a 75% success rate. The institution has appointed a business analyst (BA) to review the business transactions for the processes of origination, payments, and closures, as well as identify opportunities for improvements and recommend solutions. The BA has collected the following information over the last three months pertaining to these business processes:

All the business processes are at their maximum capacity in terms of the current number of

transactions.

Each business process has a certain number of rejects and the reasons for rejection include

documentation, verification, collateral, and funding. Funding rejects occur when the bank's customers have failed to make payment of their mortgage processing fee or mortgage closure payment. The BA has also recommended the use of documentation checklists as a solution to eliminate the documentation rejects. If an additional recommendation to reduce Verification Rejects by 50% were to be introduced into the mortgage origination process, what is the potential success rate of the mortgage origination process?

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A financial institution engaged in mortgage lending has embarked on a business process improvement initiative to eliminate the activities that hinder growth to ultimately improve the success rate of its mortgage business. As a benchmark for identification, the institution is keen on improving any business process that has less than a 75% success rate. The institution has appointed a business analyst (BA) to review the business transactions for the processes of origination, payments, and closures, as well as identify opportunities for improvements and recommend solutions. The BA has collected the following information over the last three months pertaining to these business processes:

All the business processes are at their maximum capacity in terms of the current number of

transactions.

Each business process has a certain number of rejects and the reasons for rejection include

documentation, verification, collateral, and funding. Funding rejects occur when the bank's customers have failed to make payment of their mortgage processing fee or mortgage closure payment. The BA has also recommended the use of documentation checklists as a solution to eliminate the documentation rejects. If an additional recommendation to reduce Verification Rejects by 50% were to be introduced into the mortgage origination process, what is the potential success rate of the mortgage origination process?

Accepted Answer

D. 74% Dividing the number of successful transactions by the total transactions over the three-month period for the identified process yields a success rate of 74%, which falls below the 75% benchmark the institution established. Because it fails to meet the minimum acceptable performance level, it qualifies as a process requiring improvement and becomes a focus for the BA's analysis and solution recommendations.

Answer

A. 86% 86% exceeds the 75% threshold, meaning the process performs above the institution's minimum acceptable level and would not be flagged for improvement.

Answer

B. 83% 83% also surpasses the 75% benchmark and represents a process with an acceptable success rate under the institution's criteria.

Answer

C. 70% 70% is not supported by the correct calculation from the provided three-month transaction data, even though it also falls below the 75% threshold.

A financial institution engaged in mortgage lending has embarked on a business process improvement initiative to eliminate the activities that hinder growth to ultimately improve the success rate of…

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