The banking industry has been through nothing short of hard times lately. Many banks are in varying degrees of distress or will be. So, what can banks do to help their cause.
Having worked with banks for almost 10 years performing bank management consulting, I see many opportunities to improve service and reduce costs. Here are some ideas that may help.
Every bank I have ever been has designed the work Frederick Taylor style (scientific management theory) separating the duties into specialties. This has created the well-known front office and back office environment. Many times this design has been locked in by technology that inhibits the flow of service and creates waste.
(2) Separating the Decision Making from the Work.
Banks are built on command and control thinking with the workers working and the managers managing this presents a missed opportunity. Most bankers in management have “done the work of a teller” at one point in their career. But things change and with out a thorough understanding of the work as it is done today, wrong or poor decisions are made. Banking management needs to be on a constant vigil to understand the work and not abdicate decision-making to reports, vendors or anecdotal evidence.
(3) Understanding Customer Purpose and Demand.
When I visited a bank, most executives and managers thought it was bizarre that I would want to start at the front-line. The points of transaction for customers is where improving banking systems begins. Understanding the what and why of current performance naturally leads us to where the customer touches the bank. Contact centers, tellers, and loan officers offer a good opportunity to easily understand how well a bank is performing in the eyes of the customers. Understanding “what matters” to customers and the types of demands presented can be a profound education.
(4) Technology and Automation.
When you combine making decisions about the work without knowledge, poor work design and technology you get huge amounts of waste in banking. The use of technology and automation is over-prescribed in banks at great cost. Technology folks and IT vendors running around looking for ways to use technology without questioning the design or understanding the demand.
All of these lead to increase costs and worse service. The inability for standardization to absorb variety leads to failure demand demand caused by a failure to do something or do something right for a customer). When workers find the need to standardize they can pull it in, forced standardization is never a good idea. Copying and best practices (a form of copying) lead to much waste as all banks are different by culture, management, work design, structure, customers, etc. to copy is to miss opportunity for innovation and new methods.
Any bank looking to improve service and reduce costs should find plenty of ideas with each and all of these.
Some sample results are:
Failure Demand – 60%
First Call Resolution – 30%
Failure Demand – 10%
FCR – 92%
Retention – 20%
Retention – 42%
Conversion – 21%
Conversion – 95% (and the 5% were ones the bank didn’t want)
Failure Demand – 54%
FCR – 24%
Failure Demand – 18%
FCR – 86%
These results are from a bank management consulting engagement that resulted in a 20% reduction in expenses in one year. You may be getting these results, if not, you may want to learn more about the 95 Method.
Leave me a comment. . . share your opinion! Click on comments below.
Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public). His organization helps executives find a better way to make the work work. Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected]. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.Share This: