Banking Adopts Six Sigma With Success

By Craig Calvin

Six Sigma, until now, has been the domain of the manufacturing industry. The power of Six Sigma is its capacity to adapt itself to the needs of all sorts of industries, may it be services, healthcare or the military. Six Sigma tools and principles can be extremely valuable to the service sector organizations like banks. Six Sigma principles can be useful for banks, because customers are the key to their success.

There can be no better proof than the successful implementation of Six Sigma in two of the greatest banks - Bank of America and Citibank of Citigroup. These banks have adopted the Six Sigma culture and bank officials accept the great role it plays in benefiting customers as well as the bank in all banking operations. Banks find the utility of Six Sigma initiatives in a major area of concern, the cycle time reduction.

When Six Sigma is introduced to the branch level, its usefulness becomes readily apparent. An increased efficiency of operations and profitability is realized, along with higher rates of customer retention and account conversions. Six Sigma processes will also reduce customer complaints and branches will see a reduction of processing time in taking calls and even processing loans.

To bring about the improvement in the various operations in the banking sector, the DMAIC methodology to undertake Six Sigma projects can prove to be the best approach. Customer satisfaction is the basic objective of all the banks. In the 'define' phase of the DMAIC discipline, all of the areas and processes that involve customer interaction are defined. All processes that directly affect customer satisfaction levels are identified with adequate consultation with the senior management.

The next phase is to 'measure' by collecting relative data with management assistance. The data will be measured to determine the impact it has on customer satisfaction. The processes with the most customer impact will then be analyzed to determine how they affect the customer experience and prioritized for correction. The 'analysis' stage will establish the procedures to be used to improve the customer satisfaction, to include even such things as reducing time spent at a teller window. Once needed changes are identified, the 'improve' stage will run tests and simulations to study potential outcomes, then changes are made as required. Once changes are implemented, 'control' measures must be put into place to oversee and monitor the results. If any portion should fall short of preset goals, corrective measures are then taken. It is with the Six Sigma methodical standardized approach can bring about positive changes that will lead to increased levels of customer satisfaction.

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