Our client, one of Germany’s leading banks, was profitable, but the GM of its London subsidiary was convinced that his branch could still achieve far greater financial performance. A continuous improvement program had been running for some time but was simply not delivering radical results.
Thomas Group was engaged in a program with the commercial banking subsidiary in London and later, as a result of performance gains, in New York and Hong Kong. The focus in London was on:
The primary issue with the company was that it operated within a functional silo culture. The consequence of which was that sales, credit approval, the dealing room, back-office, controlling, and IT were highly territorial.
For a customer-driven business, there was insufficient focus upon the delivery of seamless and accurate customer-focused processes. The existing continuous improvement program was not addressing cross-functional process issues.
The bank’s three key customer-focused processes were identified as:
Cross-functional teams were set up to map the key processes, define process measurements and then identify and remove barriers to improved process speed and accuracy.
The Sales team was insufficiently active in driving new client acquisition and viewed the Credit Approval team as conservative due to its frequent requests for further client information and delay in client credit approval.
To drive proactive acquisition behavior, sales funnel measurements and a review process were installed. Drivers towards greater efficiency of the customer acquisition process were:
A cross-functional Sales and Credit Approval team was formed to address the issue of frequent requests for further information and delays in client credit approval. It developed a simple checklist of information required for the approval process and overcame it’s not our problem functional silo issues with the sales team.
In addition to correctness of data from the Sales team, the key perceived issue was speed of response from the headquarters Credit Approval function. In fact, upon deep-dive analysis it was found that incomplete information, unclear credit worthiness criteria and a lack of standard process and data formats were the root causes of these delays.
Measurements related to time and first time correct performance were installed in every step of the subsidiary Credit Approval process. In addition, productivity measurements for teams were put in place.
A tracking system was set up to measure process time for all credit requests. Standardized credit acceptance criteria were defined with rules to empower the local Credit Approval team to pass certain types of requests without having to check back with headquarters.
Major barriers to greater speed and accuracy within this process were identified as:
Incomplete and unmatched transactions sitting in limbo resulted in a high level of interest burden, customer penalty and customer dissatisfaction.
A cross-functional team eliminated transaction batching and a clear and measurable process was installed to drive improvement through the measurement of cycle-time and right first time transaction data transmission.
A review process was set up with the Dealing Room head in order to drive ownership of data correctness throughout the dealing room. The results were a higher level of right first time performance, better transaction and settlements response time, happier dealers and, more importantly, happier customers.
“Driving quality with time has not only proven to be the right formula to improve our profitability and to grow our business, but has also given management and the whole team a new sense of direction, inspiration and confidence”