Operational Excellence in Banking

Looking at the given market conditions and opportunities, leading banks are focused on improving key processes, especially those that provide opportunity to increase productivity and attract new customers on board. Banking industry is facing increased competition, accelerating regulatory challenges and global financial pressures. Retail banks are struggling to sustain their revenue models, manage shrinking credit margins, and deal with customers that no longer trust financial institutions due to rise in mis-selling.

Looking at this even retails banks wants to maximize the resources they have by operating as efficiently as possible by eliminating wastes. They have understood the thriving need to improve the processes linked with their day to day life i.e. opening accounts, processing a loan application, providing statement, etc. It has been observed that most of the banks processes are not effectively linked to existing systems resulting in service inefficiencies and lost business opportunities. Retail banks rely heavily on business processes to provide the core services that customers expect and therefore it is important that people, processes and the data work together and are aligned properly to execute those processes. If this is taken care of retail banks can deliver improved client management with better quality, reduced costs and on time delivery.

Misconception

Many bankers think that their field is too specialized to benefit from the methods of Kaizen/Lean/Operational excellence.

Challenges

  • Previous improvement initiatives had limited success and were not sustained
  • Employees were sceptical about process improvement initiatives and thought that it would quickly loose favour
  • Helping leadership team change culture and lead transformation

Solutions

  • Training: Train and make employees aware with continuous improvement principles and tools
  • Make changes that would directly impact working environments
  • Implement tools to engage employees at all level in the success of the business
  • Implement KAIZEN™ to target specific areas of operational improvement resulting in more efficient and effective workflows by eliminating wastes.

Results

  • Customer Service can uncover several improvements.
  • Improved processes and reporting structures
  • Eliminate repetitive work by eliminating Muda (waste), mura (variation) and muri (strain)

KAIZEN™ or Continuous process improvement (CPI) can help banking industry to enhance their core competitiveness. It can guide and help banks to think comprehensively and improve process effectively. And apart from this its imperative for banks to apply KAIZEN™ as quickly as possible to be a survivor in the financial service industry.

Sensei Masaaki Imai,  author of the classic books Kaizen: The Key To Japan’s Competitive Success and Gemba Kaizen: A Commonsense, Low-Cost Approach to Management, says that the true meaning of KAIZEN™ is to involve everyone everywhere in making improvements every day.

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