Towards Improving Banking Services Quality - 2 - Introduction – Lean Banking

Towards Improving Banking Services Quality

2.

Introduction – Lean Banking

 

Many wonder or ask whether Lean management can be effectively applied in the financial services industry, particularly in banks. While Lean originated in manufacturing, where tangible goods are produced, banking is a highly process-intensive service sector. This makes Lean principles not only applicable but valuable for enhancing operational efficiency in banking. Recognizing this, many financial services organizations, including banks, have implemented Lean management to streamline their processes, reduce waste, and improve customer satisfaction.

 

Applying Lean principles in banking can be termed "Lean Banking." Lean Banking is a structured approach to identifying and eliminating non-value-added activities across all areas of banking. This strategy helps banks to cut costs, optimize processes, and improve overall service delivery to customers. Lean Banking witnesses that Lean’s benefits are not limited to manufacturing but are achievable in services-oriented industries as well.

 

The key objectives of Lean Banking are:

 

·       Identifying Waste and Inefficiencies: Lean Banking focuses on detecting and eliminating waste (Muda) in various processes. Waste in banking can appear in the form of excessive paperwork, redundant approvals, delays in processing, or overstaffed functions that do not contribute directly to customer satisfaction.

 

·       Enhancing Customer Experience: By removing inefficiencies, banks can reduce waiting times, simplify customer interactions, and provide faster, more reliable services, leading to higher customer satisfaction and loyalty.

 

·       Optimizing Staff Utilization: Lean enables banks to maximize the potential of their employees, ensuring that tasks are aligned with their skills and eliminating redundant roles or unnecessary tasks. This not only reduces operational costs but also enhances staff morale and productivity.

 

Lean banking helps in:

 

1.       Reducing Loan Processing Time: Traditionally, banks may take time to process loans due to multiple approval steps, extensive paperwork, and rigid departmental silos. By applying Lean banking, some banks have restructured their processes, reducing the number of approvals required, digitizing paperwork, and automating steps where possible. As a result, loan processing times have dropped from weeks to mere days, providing faster service and a more pleasant experience for customers.

 

2.       Streamlining Account Opening Procedures: Account opening often involves multiple steps, forms, and verification procedures. A Lean approach can eliminate unnecessary steps and introduce digital verification, reducing the time it takes to open an account. For instance, some banks have implemented online KYC (Know Your Customer) and digital document submission, allowing customers to open accounts from the convenience of their homes, in less than an hour.

 

3.       Reducing Teller Queues with Workflow Adjustments: In a Lean bank, front-line staff, like tellers, are empowered to handle a range of customer inquiries and transactions, eliminating the need for customers to be referred to multiple departments. For example, banks have implemented Lean by cross-training staff to handle common inquiries, thereby reducing queues and speeding up service times.

 

Addressing Common Concerns

 

There is often initial doubt as to whether Lean management can be applied in the financial services industry, as it was initially developed for manufacturing. However, Lean principles are adaptable and can drive substantial benefits in banking by focusing on process efficiency. Many banks have already proven this approach effective, showing how Lean methodologies like the Kaizen (continuous improvement) mindset can enhance customer service, reduce costs, and streamline operations.

 

Lean Banking Culture

 

As Lean Banking practices take shape, they foster an organizational culture rooted in continuous improvement. This mindset encourages all employees to contribute ideas for streamlining processes and improving customer satisfaction, creating an environment where efficiency is constantly pursued.

In Lean Banking, unnecessary steps are systematically removed, and processes flow more efficiently. As waste is minimized, processes accelerate, costs decrease, and the bank becomes better equipped to serve its customers. Studies indicate that banks applying Lean principles have reduced their operational costs. This structured, sustainable approach not only strengthens the bank’s bottom line but also builds a responsive, customer-focused organization.

 

I welcome your comments, questions and suggestions.

 

Warm regards,

Keshav Ram Singhal 

Towards Improving Banking Services Quality - 1 - Introduction – Lean Management

Towards Improving Banking Services Quality

1.

Introduction – Lean Management

 

After World War II, resource scarcity, such as manpower and raw material shortages, led Japanese organizations to adopt principles that ultimately gave rise to Lean Management. Toyota, under the guidance of Taiichi Ohno and Shigeo Shingo, developed the Toyota Production System (TPS) as a response to these constraints, which transformed the auto industry and became the foundation of Lean Management. Thus, Lean Management originated in Japan.

 

Initially applied in the manufacturing industry, Lean Management principles are now utilized across diverse sectors, including services like banking, healthcare, transportation, logistics, and construction. In the banking sector, Lean Management offers several benefits: improved customer satisfaction, faster processing times, reduced operational costs, and enhanced employee morale. By adopting Lean principles, banks not only cut operational costs and reduce processing times but also elevate customer satisfaction. Shorter loan approval times and streamlined services make banks more responsive to clients' needs, building loyalty and trust.

 

A significant focus of Lean Management is on eliminating waste, known as "Muda." In banking, waste can appear as excessive paperwork, prolonged wait times, or inefficient customer service interactions. By addressing these inefficiencies, banks can streamline processes to deliver better, faster services to clients, directly translating to higher satisfaction and lower operational costs. For instance, some banks have successfully reduced loan processing times from weeks to mere days by applying Lean principles to each stage of the workflow. Today, Lean processes are applied globally by organizations seeking to address inefficiencies impacting their bottom line.

 

Inspired by the Toyota Production System, Lean Management organizes and manages work to improve an organization’s performance, particularly the quality and profitability of its processes.

 

Lean is considered a philosophy of continuous improvement. A Lean organization focuses on increasing customer value, eliminating waste, and optimizing operations. The essential components of Lean can be applied across all types of businesses and processes. The main purpose of Lean Management is to create value for the customer by optimizing resources.

 

Dr. Shigeo Shingo, an industrial engineer and major consultant at Toyota, played a significant role in Toyota’s Lean journey. He understood that the success of Lean manufacturing lay in integrating people with efficient processes. In 1960, Shingo developed the Single Minute Exchange of Die (SMED) system, which aimed to reduce setup times and eliminate quality defects. His contributions, such as the kaizen concept, emphasized continuous improvement and became central to Lean philosophy.

 

The term “Lean Thinking” was coined by James P. Womack and Daniel T. Jones to encapsulate their study of Toyota's Production System. Lean Thinking encourages a mindset that recognizes inefficiencies and identifies waste inadvertently created by the organization of processes. This perspective enables businesses to streamline workflows, improving both quality and resource efficiency across various sectors.

 

In short:

 

- Lean is doing more with less time, fewer resources, less inventory, and less manpower, or,

- Lean is achieving more with the same resources.

 

Lean Management is a powerful strategy for organizations seeking to survive, thrive, and grow successfully.

I welcome your comments, questions and suggestions.

Warm regards,

Keshav Ram Singhal 

Introduction to the Blog Series: Towards Improving Banking Services Quality

 Introduction to the Blog Series: Towards Improving Banking Services Quality

 

Dear Readers,

 

Welcome to an exciting new series on this blog, "Towards Improving Banking Services Quality." In today’s rapidly evolving financial landscape, delivering high-quality service in banking has become both a differentiator and a necessity. This series draws inspiration from my Kindle book, Future Banking is Lean Banking (available on Amazon), which I am currently revising. I am eager to share insights from this work with all of you, and I look forward to your valuable feedback as we embark on this journey together.

 

The focus of this series is Lean Banking—a transformative approach aimed at enhancing efficiency, increasing customer satisfaction, and implementing value-driven improvements across the financial services industry. Over the coming weeks, I’ll be sharing revised chapters and ideas that explore how Lean principles apply to banking. Through practical strategies, we’ll look at how to streamline processes, reduce waste, and ultimately enhance the customer experience.

 

Why This Series?

 

Achieving high-quality service in banking demands a continuous improvement mindset. The purpose of this series is not just to share knowledge but to open a conversation. I welcome your comments, questions, and suggestions as each chapter unfolds. Your insights will be instrumental in refining these concepts and ensuring that Future Banking is Lean Banking becomes even more relevant and impactful for readers.

 

What to Expect

 

Each post in this series will dive into specific aspects of Lean Banking, including:

 

·       Reducing inefficiencies to improve customer service

·       Optimizing banking processes for operational excellence

·       Building a Lean-focused culture within banking organizations

 

Through these posts, I hope to provide practical insights that bank professionals, financial service providers, and quality management enthusiasts can directly apply in their work.

 

Join the Conversation

 

I invite you to join me on this journey, offer your valuable feedback, and help shape these ideas into actionable improvements. Additionally, I request that you bring this series to the attention of banking management executives who could greatly benefit from understanding and applying these principles within their organizations.

 

Together, let’s explore how Lean Management can pave the way for a more efficient, customer-focused banking experience. Your experiences, insights, and feedback will enrich this conversation and help shape the book’s content further.

 

Thank you for joining me on this path toward improving the quality of banking services. I look forward to your participation and contributions!

 

Warm regards,
Keshav Ram Singhal

 

Revision of ISO 9001:2015 Quality Management System (QMS) Standard

Revision of ISO 9001:2015 Quality Management System (QMS) Standard

 

In February 2024, the ISO 9001:2015 Quality Management System (QMS) standard was amended to integrate climate change considerations, reflecting global sustainability demands.

 

Key Amendments:

 

·       Clause 4.1 – New requirement: Organizations must assess whether climate change poses a relevant issue within their operational context.

 

·       Clause 4.2 – Added note: Relevant interested parties may have needs and expectations related to climate change.

 

Potential ISO 9001 Revision Timeline

 

The ISO 9001:2015 standard is currently under review for a potential revision. The International Organization for Standardization (ISO) typically revises standards every five years, but updates to ISO 9001 have historically ranged between 6 and 10 years. Initial discussions targeted a 2025 publication, but the revised standard is now expected in 2026.

 

As with previous updates, this revision process will incorporate feedback from industry experts and user groups to maintain the standard’s relevance in today’s quality management practices.

 

Focus of the Revision

 

The revision is expected to:

 

·       Align ISO 9001’s structure with other management system standards (e.g., Annex SL).

 

·       Clarify specific requirements in the annex to reduce ambiguity.

 

·       Potentially address new areas, including:

 

o   Ethics, integrity, vision, mission, and values.

 

o   The role of quality culture in fostering organizational resilience.

 

o   Managing risks and opportunities in dynamic environments.

 

While no fundamental changes to the core structure of ISO 9001 are planned, these updates are intended to harmonize ISO 9001 with other standards, clarify existing requirements, and emphasize factors such as ethics, organizational mission, quality culture, and proactive risk management in quality practices.

 

Additionally, ISO 9000, which provides definitions and quality management principles, is also under review to expand its scope with new terms and definitions.

 

Objectives and Participation

 

The ISO/TC 176/SC2/WG29 committee is responsible for leading the ISO 9001 revision process. The update aims to ensure that the standard addresses current and future quality management needs, making it easier for users to interpret and implement.

 

Key objectives of the update include:

 

·       Reviewing the validity and applicability of existing requirements.

 

·       Evaluating the impact of emerging trends and technologies.

 

·       Aligning with the harmonized structure (Annex SL).

 

·       Addressing requests for clearer interpretation of requirements.

 

Those interested in contributing to the revision process can participate by contacting their National Standards Body or a liaison organization.

 

The decision to initiate a revision was made in August 2023, motivated by the complexities of the global economic and political landscape, as well as technological advancements.

 

Regards,
Keshav Ram Singhal

ISO 9001:2015 QMS Standard in Brief

ISO 9001:2015 QMS Standard in Brief

 

Clause One, the Scope—a standard map to lead,

For every organization, no matter the creed.

Requirements are flexible, built for all,

To boost quality in organizations, whether big or small.

 

Clause Two brings Normative Reference notes,

ISO 9000:2015 vocabulary, fundamentals in its quotes.

Definitions to guide the standard with clarity true,

So all we understand what we need to do.

 

Clause Three deals with Terms and Definitions with care,

It references ISO 9000, precise and fair.

Each term and definition in ISO 9000, laid out right,

To keep our understanding clear and bright.

 

Clause Four, Organization Context, broad and wide,

Interested parties' expectations the standard won’t let slide.

Scope and processes we must determine and define,

To align organization's QMS with business design.

 

Clause Five, Leadership, leads the way,

Top management’s active role here to stay.

Roles, guidance, and values that they share,

The team of the organization remains inspired and prepared.

 

Clause Six, Planning, addresses risks and targets,

Objectives and changes are planned well to get.

Risk-based thinking strengthens the foundation,

To foster success, growth, and innovation.

 

Clause Seven, Support, for all we need,

Resources, skills, to help succeed.

From documents to system knowledge shared,

A solid quality management system, well prepared.

 

Clause Eight, Operation, brings it alive,

Design and production, in which we thrive.

Services or products delivered, outputs controlled,

Standards we met and many processes rolled.

 

Clause Nine, Performance evaluation checks all the way,

Data analysis, internal audits, and management review say.

To measure, to analyze, to see what’s best and true,

So, our systems stay strong, achieve all goals in view.

 

Clause Ten, Improvement, a call to always rise,

Nonconformity and corrective action, learning wise.

Continual improvement and growth, in steps we tread,

Quality’s journey progress, always QMS remains ahead.

 

Annex A  informative adds a guiding light,

Concepts and terms clarified to sight.

Annex B informative provides other standards near,

Thus, ISO makes the broader quality sphere.

 

At the end, a Bibliography is given, wise and deep,

To reference the Quality that we sow and reap.

ISO 9001:2015 QMS standard, in harmony rings,

A popular QMS standard for excellence ISO brings.

 

- Keshav Ram Singhal

Embracing the Seven QMS Principles

Embracing the Seven QMS Principles

In quality’s realm, an organization sets its sights,
On principles guiding it to greater heights.
Customer Focus, the heart of its creed,
Meeting customer needs, it strives to lead.

With Leadership strong and vision clear,
A path for all to hold and steer.
Engagement of People, each voice and hand,
Together, it rises—a united stand.

A Process Approach it proudly takes,
Steps aligned, avoiding mistakes.
Through Improvement, its journey proceeds,
Progress and success in every deed.

Evidence-Based Decisions light the way,
With facts and figures to guide its sway.
Relationship Management, bonds it holds dear,
Building trust year by year.

In ISO’s spirit, it marches along,
With PDCA and risk-based thinking strong.
The road to quality, firm and true,
These seven pillars carry it through.

- Keshav Ram Singhal

The Power of QMS

The Power of QMS

A strategic choice, the strength of QMS,
Guiding each step toward success.
Boosting performance, paving the way,
Building foundations that last and stay.

With benefits that thrive and grow,
It helps meet standard requirements, high and low.
From customer expectations to legal needs,
It empowers organizations to excel in deeds.

To satisfy clients, it clears the way,
Addressing risks, come what may.
Meeting each requirement, setting the tone,
It helps organizations stay well-known.

ISO 9001, the guide we heed,
For all those within and beyond, indeed.
With PDCA’s might and risk-based sight,
QMS shines as an organization's light.

— Keshav Ram Singhal

Happy Quality Month: November 2024

 Happy Quality Month: November 2024

.

In November's crisp and thoughtful air,

Quality Month begins every year.

A time to think, reflect, renew,

To honor quality work that’s tried and true.

.

Each process be checked, each standard be high,

Aiming for excellence, reaching the sky.

Every thing we measure, satisfaction be our goal,

Quality’s heart beats in the whole.

.

We pledge to improve, to learn, to grow,

For better processes, in each task we sow.

From risk-based thinking to perfect design,

Quality’s journey should be everyone line.

.

Together, let’s raise standards strong,

Correct the errors, eliminate the wrong.

With dedication, we should be bold and true,

November’s call us to dedicate us Quality’s view.

.

So we should strive, with our purpose clear,

Do what is planned every day, each month, each year,

Always implement standards that set high—

So that we get our goal and reach the sky.

.

Keshav Ram Singhal

The Journey from Little ‘q’ Quality to Big ‘Q’ Quality

The Journey from Little ‘q’ Quality to Big ‘Q’ Quality

 

Quality is a fluid concept—difficult to define and hard to manage, largely because it is subjective. Every individual has their own perception of quality. Various authors have defined quality differently, leading to ongoing discussions about its meaning. Juran’s Quality Handbook provides two essential definitions of quality:

 

1.   Quality means those features of products that meet customer needs and thereby provide customer satisfaction.

 

2.   Quality means freedom from deficiencies—freedom from errors that require rework or cause field failures, customer claims, and so on.

 

Dr. Joseph M. Juran states that quality means fitness for use and emphasizes that it is the customer who defines fitness. In the 1980s, he introduced the concepts of little 'q' quality and big 'Q' Quality, which were widely discussed during that decade.

 

Juran introduced this distinction to shift organizations' focus from narrow, product-based quality control to a strategic, organization-wide approach. His goal was to encourage management leaders to embrace quality across all levels and functions, not just during production or service delivery. The evolution from little 'q' quality to big 'Q' Quality marked a significant transformation in how quality was perceived and managed.

 

Historical Evolution of Little 'q' and Big 'Q' Quality Concepts

 

Juran, known for his Juran Trilogy (Quality Planning, Quality Control, and Quality Improvement), observed that most organizations focused too heavily on inspecting product quality—a practice he referred to as little 'q' quality. He argued for a broader, more strategic perspective: organizations needed to align quality management with their strategic goals to achieve sustainable success.

 

At the time, Japanese industrial products were outperforming Western counterparts, which compelled Western organizations to rethink their quality strategies. This transformation extended beyond inspection and control; it introduced a new vision of quality as an integral part of the entire business system.

 

Juran emphasized the role of leadership and system thinking in achieving quality. He advocated for integrating quality into the organization’s culture. In his view, focusing solely on little 'q' quality was insufficient to meet evolving customer needs. Instead, quality needed to permeate all areas of an organization, from R&D and finance to customer relations and supply chain management.

 

In 1987, the International Organization for Standardization (ISO) introduced the ISO 9000 family of quality management standards, marking a shift toward systematic quality management. By the 1990s, the concept of big 'Q' Quality became aligned with Total Quality Management (TQM) principles, emphasizing cross-functional collaboration, customer focus, and continuous improvement.

 

This evolution also influenced subsequent versions of ISO 9001, which moved from simple product or service control to a comprehensive management approach. The newer standards stressed leadership involvement, error prevention, continual improvement, and customer satisfaction, thus fully embracing the big 'Q' Quality concept.

 

Little 'q' Quality

 

The little 'q' quality concept focuses on operational-level activities and has a narrow scope. It reflects the traditional understanding of quality, concentrating primarily on product or service outcomes.

 

This approach emphasizes quality control, inspection, and defect prevention or correction during the production or service delivery process. Little 'q' quality ensures that each manufactured part or rendered service meets the required specifications and expectations.

 

Big 'Q' Quality

 

The big 'Q' Quality concept has a broader, organization-wide focus. It represents a holistic and strategic approach to managing quality, involving the entire organization and all its processes.

 

Big 'Q' Quality focuses on long-term goals, such as customer satisfaction, continual improvement, and organizational excellence. This approach incorporates TQM practices, the implementation of national and international standards, leadership involvement, and stakeholder engagement. It also requires regular monitoring and measurement to ensure that quality goals are achieved consistently.

 

The ultimate aim of big 'Q' Quality is to foster a quality culture across all levels of the organization. It integrates quality into the organization's mission and promotes continuous improvement practices, such as Kaizen and 5S.

 

Summary

 

The concept of big 'Q' Quality encourages organizations to move beyond individual product or service quality and develop a comprehensive quality management system. This system requires top management’s involvement, along with processes and people at all levels, to ensure sustainable success.

 

In short, little 'q' quality focuses on "doing things right," while big 'Q' Quality emphasizes "doing the right things" for long-term, sustainable success. The journey of quality has evolved from little 'q' quality to big 'Q' Quality, reflecting a shift from operational efficiency to strategic excellence.

 

Regards,
Keshav Ram Singhal