Towards Improving Banking Services Quality
12.
Value-added
Activities
Introduction
In Lean management,
identifying and focusing on value-added activities is fundamental to creating
operational efficiency and enhancing customer satisfaction. In the context of
banking, these activities directly contribute to fulfilling customer needs
while minimizing waste. By streamlining processes and ensuring that resources
are used effectively, banks can provide exceptional service, build customer
trust, and achieve competitive advantage. This chapter delves into the criteria
for identifying value-added activities and provides real-world examples
relevant to the banking.
Criteria for Value-Added Activities
For an activity to qualify as value-added, it must meet
the following three criteria:
1.
Customer Willingness to Pay: The customer
perceives the work as beneficial and is willing to pay for it. The work that
the customer is willing to pay.
2.
Physical or Informational Transformation:
The work involves a tangible or informational change to a product, service,
document, or process. The work
that physically transforms the product, service, document or information.
3.
Right the First Time: The work is
performed correctly without requiring rework or correction. The work that is
done right the first time.
Examples of Value-Added
Activities in Banks
Examples of a few value-added activities in
banks are:
1.
Efficient Payment Processes:
·
Quick (speedy) and hassle-free processing of
payments and transfers, including NEFT, RTGS, UPI, and international transfers.
2.
Seamless Deposit Services:
·
Instant credit of deposits, including online and
branch-based transactions, to customer accounts.
3.
Personalized Digital Banking:
·
Use of mobile apps or online banking platforms
to provide personalized recommendations, alerts, and reminders tailored to
customer behaviour.
4.
Real-Time Information Sharing:
·
Providing timely updates such as account
statements, transaction alerts, loan repayment schedules, and interest
certificates, Form 16A etc
via SMS, email, or online portals.
5.
Effective Customer Communication:
·
Proactive communication regarding new services,
upcoming deadlines, or promotional offers relevant to customer needs.
6.
Streamlined Loan Application Processes:
·
Faster loan approvals using AI-driven credit
evaluations and minimal paperwork requirements.
7.
Convenient Self-Service Options:
·
Properly functioning ATMs, cash deposit
machines, passbook printing kiosks, and interactive customer support chatbots.
8.
Speedy Grievance Redressal:
·
Quick resolution of complaints using dedicated
helplines, email escalation, or in-app ticketing systems.
9.
Advanced Technology Integration:
·
Adoption of biometric authentication for secure
access, facial recognition for identity verification, or blockchain for
transaction transparency.
10.
Efficient Onboarding:
·
Instant online account opening with eKYC
integration, allowing customers to complete the process without visiting a
branch.
11.
Optimized Queue Management:
·
Implementation of token systems or mobile
appointment booking to reduce wait times in branches.
12.
Enhanced Financial Guidance:
·
Providing expert investment advice through
virtual financial advisors or dedicated relationship managers.
13.
Streamlined Foreign Exchange Services:
·
Real-time forex rate updates and instant
currency exchange at branch or online platforms.
14. Speedy reply to Customer’s Queries
and completion of work:
·
Speedy
reply to customer’s queries.
·
Speedy
completion of banking work when a customer visits a bank branch.
Conclusion
Value-added activities in
banks are the cornerstone of efficient and customer-centric banking operations.
By identifying and focusing on these activities, banks can significantly
enhance customer satisfaction, reduce operational inefficiencies, and
differentiate themselves in a competitive landscape. Understanding the criteria
for value-added activities allows banks to align their services with customer
expectations while staying true to Lean management principles. In an era where
customer loyalty is increasingly determined by service quality and speed,
excelling in value-added activities is a strategic necessity for sustained
success.
I welcome your comments, questions and suggestions.
Warm regards,
Keshav Ram Singhal
Next - Non-value-added Activities
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