iSixSigma

Lean Banking

I can’t help but wonder if banking and finance has an administrative concept equal or similar to lean process strategic planning.

As accounting goes I suspect that efficiency, correct mathematical computation and balanced accounts all are considered important and of value to the banking customer. But what is the value added to high or irresponsible risk?

Certainly the possible return is always measured against the potential risk, but if all investment were guaranteed by some umbrella organization then we all would be in the banking business.

Seems very clear that lean thinking, customer value and reduction of waste is missing in the deliberations of some companies in the finance industry. Maybe they could learn something from the manufacturing industry?

Just a thought.

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Comments 4

  1. Kevin Blake

    Let’s see, ten years ago the mortgage application process would have included submitting copies of your last 3 tax returns as well as your last 6 pay stubs… In addition, the application was long and they tended to want a lot of details like marital status, number of children, monthly expense estimates among other things…

    Then they used Lean principles and asked themselves, "Do we really need proof of income?", "What do we actually do with the proof of income?" When they got the answers to those questions, they had a Eureka moment and realized that they didn’t need that info. Stats showed a very small difference between what people stated as their income and what their documentation showed so, why bother with the documentation… Let people just state whatever they wanted as their income.

    The current mess occurred as a result of a confluence of factors — this was just one of many. But it was one factor. Next time you watch a commercial advertising a one-page mortgage application (which presumably appeals to the functionally illiterate who lack the necessities to fill out forms) and 30 minute approval, ask yourself if the people who made that process Lean and tight really did a good thing…

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  2. Ian Walker

    Hi Stephen,

    It’s not only the banking industry that’s in need of a review. The HMRC could do with a good “lean-ing”. After speaking to four different people in the same department and getting 4 different answers they are in serious need of something!

    This was capped by this genius process, on one occasion I failed the same security questions I had previously passed, but was told that if I submitted my result in writing – using the same details – my request would be processed!

    Blinding stuff
    Ian

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  3. Anand

    Hello

    I could not agree more with implementation of Lean in various aspects of Banking. In my opinion, banking and other financial services experience for a customer can be improved by leaps and bounds by optimizing processes in the organization.

    Further, I would also like to know about any certification/course (preferably in India) on "Process Optimization" in Banking.

    Thanking in anticipation.

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  4. Stephen C. Crate

    Great comments. Our own isixsigma was the first search result when I googled Lean Banking. Here is the link it provided.

    Lean Banking

    I do not know of bank specific certifications, but the article link above provides one example of lean concept deployment.

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