In only three years, Edward Jones has realized more than a million dollars in cost avoidance through the use of bots combined with LSS.
Lean Six Sigma can assist organizations determine which processes are the best candidates for automation as well as make those processes more automation ready.
Post the subprime mortgage crisis, the growth of the financial services market has become stagnant; companies are reeling under immense pressures to sustain their profit margins. It has become imperative for the financial services sector to reduce operational costs by improving operational efficiencies and effectiveness. Financial services businesses can improve by elevating their quality of…
The recent spate of events such as rogue trading losses, flash trades and a seeming outbreak of Ponzi schemes has made many in financial services wary about their existing risk management practices. In post-financial crisis times, financial services companies are already under pressure to cut their operational costs while also being expected to comply with…
An insurance firm discovers through value stream mapping that it must fix its broken processes before it can increase its productivity in a sustainable way.
According to George Wilbanks, managing director of Russell Reynolds’ Asset and Wealth Management practice, many investment firms are looking especially hard for technology executives who have some kind of training in continuous improvement. “In the last two years, with so much volatility we’ve had in the markets, they’ve been asking for Six Sigma qualifications,” he…
In finance departments, focusing Six Sigma efforts on cost savings can be a recipe for failure. The way to be successful is to focus on the areas in which employees perceive more value – risk mitigation, metric development, controls, gap analysis and assessments. This was the message of “Delivering Value in Corporate Finance”, a breakout…
How many times have you heard the saying, “Work will expand to fit the time available”? Even in industries where capacity expands and contracts depending on how much work there is to do, teams can still appear to be working hard all of the time. In value stream mapping exercises, Lean Six Sigma practitioners often…
Standard Bank Group – one of the largest financial institutions in South Africa, with more than 1.33 trillion rand (R) (US$200 billion) – recently released a case study about how it deployed Lean Six Sigma methods to reduce waste and errors, and also created a balanced scorecard system to track its progress. As a result…
A quality leader at a financial institution is deploying an Operational Excellence program across his organization that already has a project management office (PMO) in place. Recently he asked iSixSigma’s Discussion Forum about the pros and cons of using a PMO to manage project selection. Readers responded with very pro-PMO advice about how these structures…
Through scenario planning, organizations can delight their customers by preparing for problems before they happen and testing solutions on employees first.
Australian financial services firm Westpac has launched a large-scale initiative to overhaul its information technology (IT) services, part of which will be accomplished through the application of Lean and Six Sigma techniques to reduce waste and remove unnecessary banking processes. The IT plan was announced during an Oct. 8 webcast briefing with Westpac investors. During…
Lean Six Sigma remains a popular and effective tool to improve efficiency in financial services operations. However, many financial institutions are finding that identifying and reducing incremental defect variability does not fully maximize the full spectrum of improvement opportunities. To achieve a larger return on investment, many organizations are turning to Design for Six Sigma…
One of the initial challenges of enhancing IT quality metrics is to manage the mountain of data produced at a typical organization. Those organizations that have not learned how to mine their existing information to find solutions tend to track their data via spreadsheets and then generate high-level reports for executive management. Often, major gaps…
Considering the performance of the stock market over the past few years combined with current economic conditions, many financial institutions are analyzing their processes for improvements. Unfortunately, the majority of process improvement tools available to Six Sigma practitioners – such as cause-and-effect diagrams, Pareto charts, histograms and scatter plots – have been used for analyzing…
Let’s face it – without meaningful data there cannot be meaningful data analysis. Data is typically collected as a basis for measuring success and, ultimately, taking action. However, unless data is viewed realistically – separating opportune signals from probable noise – the actions taken may be inconsistent with the data collected in the first place….
Last year, business process outsourcing firm Firstsource, based in Mumbai, India, was one of the participants in the iSixSigma Live! Summit & Awards program in the Most Successful Start-up category. Recently, iSixSigma caught up with Chandeep Singh, Executive Vice President, Process Excellence and Workforce Management, at Firstsource to discuss some of the recent accomplishments of…
Any change to a process is only successful in the long run if the stakeholders truly adopt and sustain the change. Process and technology improvements cannot be implemented without a change in the hearts, minds and behaviors of the people involved in the change. True adoption and sustainability requires thoughtful planning and focus, which should…
The bank in the following case study had been encountering problems with new customer accounts. The account setup cycle time was quite high because the information-gathering process was ad hoc. It typically took several attempts to collect all the needed specifications from customers. This was causing customer dissatisfaction and, in some cases, defective accounts. The…
Based on experience with property and casualty insurers (P&C), one of the biggest profitability drivers is the expense incurred staffing and settling claims. Many P&C insurers struggle with timely and efficient claims processing. In working with P&C companies consulting groups found three common challenges that project teams must address to improve the overall claims settlement…
A Black Belt used Six Sigma to improve a transactional bank deposit process, resulting in yearly savings of $4 million.
Lean Six Sigma can be overwhelming to an organization if implemented without regard for an organization’s change management history, culture and readiness. That said, the starting point for Lean Six Sigma – as well as any organized approach to effecting change that both enhances customer experience and impacts profitability – is actually having a strategy that includes…
For Six Sigma to succeed in a financial services organization, the deployment team and the business need to be able to measure the benefit of the projects. This should occur from both a financial and operational effectiveness perspective.
Recently, a large-scale financial services company recently wanted to reengineer the process for its entire customer services organization, including people, process and technology. This company had, during the last two years, trained many Black Belts and Green Belts. It attempted to use Six Sigma methodology as the primary method of introducing customer-focused process improvement to…
In the 1990s, the teller counter was the primary customer-facing area in the financial service industry, and so improvement efforts were leveraged in this arena. With increased improvements in technology and online banking utilization, however, process improvement efforts have shifted to internal areas. Yet companies must realize that even though customers are becoming more self-reliant…
An international bank with 50 branches in Germany and approximately 300 employees decided in 2003 to adopt Six Sigma in all its business units in Europe. It then set out to use Six Sigma to implement one of its priority business strategies – significantly grow its car loan business in the next two years. The…
Through the years, there have been many different notions about what business process reengineering (BPR) is and how successful it has been as a process improvement approach. In the early 1990s, Michael Hammer and James Champy authored a best-selling book, Reengineering the Corporation, in which they promoted that sometimes radical redesign and reorganization of a…
Perhaps it was impatience with how long traditional projects take. Often it was an awareness of how hard it is for people to concentrate on improvement when they keep thinking about getting their work done. To some extent it was a matter of their innate respect for the people who do the work. For all…
If an organization’s Six Sigma program is beginning to fail, there are warning signals. Those signals can be as simple as gut feelings, but many can be compiled into a list of specifics which indicate a disconnection from the core business.
Most Master Black Belts would probably cite design of experiments (DOE) as the most underused statistical tool in financial services. Yet, designed experiments are a favorite tool of statisticians and Six Sigma practitioners working in general business environments because they are an extremely efficient way of identifying what matters in a process and what does…
In the late 1990s, the Bank of the Southwest (BSW), a regional financial institution located in the southwestern United States, decided it was not getting its fair share of the equity loan business. Residential housing prices were climbing at a steady rate in virtually all of its markets, and credit card debt also was rising….
“Let the process flow.” “Let the customer pull.” This is what is written in manufacturing books about making processes Lean. But it is not always that simple. Consider this banking example. A customer arrives at a bank branch: He enters, is welcomed by an employee and offered a cup of coffee. He explains his interest…
Many a company has gotten caught up in the enthusiasm that comes with a great-sounding new idea. It is great when that idea turns into a profitable new product or service. But it can be a disaster when a lot time and money is invested only to end up with a dud. How great would…
It is something everyone has experienced: Walking into a bank and finding we’re the sixth person in line. Having a computer go down and discovering that it will take hours or days before someone can come to fix it. Getting an urgent request and having to set aside the 10 other things we were supposed…
Because of corporate collapses such as Enron and WorldCom, large financial institutions during the last decade have had to absorb enormous losses. In the wake of these fiscal disasters, financial organizations needed to develop risk-rating scorecards to help them become much more quantitative in how they evaluate and assign risks. Six Sigma can provide a…
A midsized debt collection agency was in trouble with one of its largest clients. The client was unhappy with the agency’s debt collection rate, and was threatening to take their business elsewhere if things did not improve. The manager of the agency division involved had just become a Green Belt and he thought this would…
The future is knocking at the door of the U.S. banking industry. But how do banks get the future into their daily operations? More and more banks are using Design for Six Sigma (DFSS) to help them to take full advantage of such modern processes as electronic check presentment, thereby reducing expenses and increasing profits….
One of the biggest challenges for Six Sigma practitioners in financial services is developing the ability to recognize waste. Imagine an “overnight pack” entering Bank One’s wholesale lockbox process for processing remittance payments. By the time it has been through every step, up and down the elevators, back and forth between departments, it would have…
Digital check processing. Fraud detection. Compliance monitoring. Trading floor analytics. These are all integral functions for many modern financial service institutions. And all have one thing in common – they require a huge amount of computing power. One approach to providing fast responses even with highly complex computations is distributed computing, or creating a shared compute…
It may seem un-Six Sigma-like to use art concepts in a discussion of Lean Six Sigma and the merger of two large financial institutions. But in fact, any serious approach to integrating two complex organizations can benefit from thinking in terms of art as well as science.
Moving information electronically offers tremendous opportunities for cost efficiencies and improved levels of customer satisfaction for the banking industry. But paperless processes also carry heightened risks for failure. A single process breakdown, when automated within a high-speed electronic world, can result in problems for hundreds of thousands of customers. One such process is check imaging –…
As banking operations and check processing enters the 21st Century, so too the ways financial institutions design processes enters a new age. Long gone are the days of trial-and-error in bringing new products, services or technologies to market. Companies need to be able to implement solutions effectively – the first time – to provide superior customer…
Six Sigma is a mindset that ensures problems are approached with rationality and based on a scientific procedure. So why do science-oriented credit risk managers sometimes resist Six Sigma, even in organizations that embrace the methodology?
This Information Technology (IT) case study was done during the implementation of total quality management (TQM) in a financial services company with several hundred computers and computer users in multiple locations throughout India. The results have widespread applicability and in particular are aimed at organizations with large computer networks, IT facilities management companies and customer…
The work described in this case study was undertaken in a young, rapidly expanding company in the financial services sector with no previous experience with total quality management (TQM). The quality project began with a two-day introductory awareness program covering concepts, cases, implementation strategies and imperatives of TQM. The program was conducted for the senior…
In any financial service process that is being studied for the first time, it’s common for Six Sigma teams to spend one-third to one-half of their project time on data collection alone. Here are three tips that can help you get off to a faster start.
A P&L manager who is preparing a monthly report starts gathering the information he needs. He realizes that this month’s sales figures are not broken out by region, so he calls accounting and asks for the regional split as quickly as possible. He also discovers that he has updates on only three of the four…
Reacting to the last several months of turmoil in the capital markets, I want to discuss an area where Lean Six Sigma professionals who work in banking and financial services should focus their attention, acquire new skills, and start having an impact –?? enterprise risk. A couple of years ago, one of my former colleagues…
Patricia Collins wrote an article in the September/October 2005 issue of iSixSigma Magazine titled, “Better Business Leaders.” Patricia is the senior deployment champion for Merrill Lynch’s enterprise-wide Six Sigma program. The article details Merrill Lynch’s unique approach to leadership development through Six Sigma. “The goal is not only to give the company’s future business leaders…
In 2001 Countrywide Financial launched an internally developed, proprietary program called FASTER. The six step methodology (Flow, Analyze, Solve, Target, Execute, and Review) is modeled after Six Sigmaand specifically designed for the financial services environment. FASTER as well as the customer satisfaction program PACE (Proudly Achieving Customer Expectations) are both helping Countrywide improve all aspects…
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