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Rationalization: Rolling out best practices

It is intriguing to see how often individual branches or geographic divisions in a bank have the tendency to re-invent the wheel.

Why would a bank choose different organizational structures and processes in branches or locations? Why should a credit card application, for example, take 60 minutes in one country and just a few minutes in another? Or why are customer payment orders restricted to electronic channels only in some regions while others use a range of channels?

On the one hand, Lean and Business Process Improvement (BPI) projects are blossoming, but there is still is a lot of catching up to do in process efficiency. In most cases, Lean and BPI projects are limited to one branch or one country or region.

Best practice begins at home

Often banks will find best practices within the organization that are worth rolling out across branches or locations. However, concerns over incorporating processes ‘not invented here’ coupled with broader implementation challenges means that best practices remain isolated. Worst of all, they fail to realize potential benefits including cost-reduction, improved customer satisfaction, reduced time to market, lower error rates, decreased training and maintenance effort.

Banks that are successful in process rationalization and optimization across branches and geographies are those that connect people from multiple backgrounds and locations. By challenging staff from a variety of departments (Sales, Client Services, Product Management, Operations) and a mixture of locations to co-create optimized processes, successful banks communicate better understanding of such processes and their benefits. It may sound obvious, but it is usually when explaining to someone why we do things the way we do, we suddenly understand the complexity of our own approach.

Once optimal cross-branch or cross-country processes are defined, some local deviations may remain. For further improvement, the next step could be the creation of uniform Service Catalogue and Key Performance Indicators (KPIs). By comparing KPIs across branches/regions on a regular basis you can detect the underlying causes of any differences.

This supports dispassionate, constructive discussions between the locations involved. For example, if the application lead-time of a loan in one country is much shorter than in other countries, it is important to understand why this is the case and to adjust the agreed cross-country process for all locations accordingly.

One-size-fits-all? What about quality?

The main challenge for measuring this unified cross-organization approach is to agree the underlying definitions of KPIs and services offered, while maintaining the quality standards of management information. Avoid comparing apples and oranges!

Rolling out best practices and standardizing processes across the globe is of course a major undertaking. Especially when you think about the required governance to implement and maintain best practices. However, the benefits of reduced cost, errors, maintenance, training and time to market along with increased customer satisfaction are justifiable returns on your investment. Why not have a look across the borders and adopt the processes of your star performers and take the whole organization’s structure to the next level?



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