Six Sigma’s Success In The Banking Industry

Posted on January 9, 2009 @ 2:57 am
by Craig Calvin

The adaptability of Six Sigma is what makes it attractive and useful to all sorts of business sectors, whether health care, the military or the services industry. Until now, the manufacturing industry has been the primary domain of Six Sigma. And now tools in Six Sigma have shown to be extremely useful in service sector areas such as the banking industry.

When the banking giants Bank of America and Citicorp implemented Six Sigma into their businesses, the wide adaptability of Six Sigma became more apparent to all. The results have been successful, with both institutions claiming resounding successes with the processes of management and control of their operating procedures. They both also claim the added benefit of increased customer service.

A few examples of customer service benefits include reducing customer complaints and reduction of processing time of loans and even taking calls. Six Sigma at the branch level is especially helpful in improving branch operations and profitability, customer retention and account conversions. Six Sigma initiatives can improve on payment failures, funding delays, and chedk deposit defects.

Adopting Six Sigma successfully in the banking industry can be implemented most successfully with the DMAIC approach. The ‘define’ step is used to determine specific goals of the business. In this case, customer satisfaction is at the crux of banking objectives, so all processes that deal with customer interaction and satisfaction are defined and identified by senior management.

In the ‘measure’ phase, Six Sigma experts will use quantitative measures to collect relevant data with the assistance from the managers. This data is used to measure the effect the processes have on the customer satisfaction levels. Those that have the maximum impact on customers will be considered for improvement on priority basis. Customers have an impact to a large extent on the amount of time they need to wait for their operation to be completed and data collection for this purpose, which is highly important. The ‘analyze’ stage will be relevant as Six Sigma experts will analyze the data collected to find which step in the processes has the maximum impact on customer satisfaction levels. If the time taken for the process is high, the sub-process will be analyzed to check which step takes the maximum amount of time. The ‘improve’ phase will see the precise changes being made to the processes in consultation with the managers and the process operators. These improvements will be based on the data collected in the measure phase. Simulations and tests are relevant, so as to study the impact on the process outcome, and changes are made as required. ‘Control’ measures have to be put in place in this stage, so that impact of the improvements can be seen. If any process falls short in achieving Six Sigma levels, corrective measures will be taken. The systematic approach of Six Sigma can be highly advantageous in bringing about constructive changes that lead to high levels of customer satisfaction in different banking operations.

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