Examples Of Six Sigma Implementation In Finance And Banking

[Vishwadeep Khatri]

Common Lean Six Sigma Implementation in Finance and Banking are listed below.

• Reducing Financial Risk
• Simulation for financial decisions
• New product design of financial instruments
• Improving portfolio strategy

On operational level - 

• Reducing documentation errors
• Improving the reconciliation processes.
• Reducing response delays.
• Reducing or eliminating invoicing errors
• Eliminating the possibility of erroneous data entry
• Reducing audit non conformities.
• Reducing salary issue turn around time
• Control spending over time
• Reduce electronic financial transaction costs.
• Reducing complaints.
• Enhancing (internal or external) customer satisfaction
• Improving customer feedback and response processes

Among users in the financial services industry, early pioneers include GE Capital, Sun Trust Banks, Citigroup, and JPMorgan Chase & Co.

JPMorgan Chase & Co. is the second largest bank in the US. With Six Sigma, it has generated wonderful results through expense reduction, revenue increase and enhanced customer satisfaction.

American Express began with Six Sigma in 1998. It has benefited with billions of dollars of benefits since then. Bank of America started with Six Sigma in 2001 and has announced huge savings through increased savings, increased revenue and enhanced customer satisfaction.

Among Indian companies, Benchmark Six Sigma has had participation from good number of financial sector participants in recent training programs. Few of them are - IDBI, Reffco Sify, Cholamandalam Financial Services, Metlife, Max New York Life, HDFC Bank, ICICI Bank, ABN AMRO

 

Some of the leading implementers of Lean Six Sigma (LSS) globally are in the BFSI domain are Bank of America, JPF (Life Insurance), Barclays Stockbrokers (Stockbroking), Fidelity Investments (Mutual Funds), ICICI Bank, American Express, HSBC, Deutche Bank, First Data Corporation (payment processing), JPMorgan Chase, Lloyd's TSB, UBS, and Citibank. Today, Benchmark Six Sigma trained professionals operate from all these organizations. 

[Yatin K]

Hi, My question is about Six Sigma Implementation in Microfinance industry (MFI). MFI itself is in nascent stage. Are there any examples/case study of application of six sigma in MFI? I have approached one MFI for the same reason and I think it can be applied  for reducing drop out rates,increasing the average clients per employee, streamlining/standardisation of application procedure, reporting structure etc.

[Vishwadeep Khatri]

Dear Yatin,

Your ideas seem good. You just need to see that each project should pose a reasonable challenge and should make business sense.

Reasonable challenge - The problem statement should be such where the cause and the solution are unknown. Also, if the solution can be reached with some data analysis and a brainstorming session, it may not be worthwhile to be taken up as a Six Sigma project.

Business Sense - The project should promise good business benefit for business leaders to like it and approve it.

Regards,

VK

 

[Yatin K]

Dear Vishwadeep, Thanks for your view/ suggestion. Looking forward for it in future also.

Regards,

Yatin

[Sachin Arora]

I am working as a Chartered Accountant with a construction company, how is Six Sigma beneficial for me?

[Sachin Arora]

As a Team Leader in a financial organisation and I would like to understand the Six Sigma programme further if this will be able to help me in my day to day work.

[Sachin Arora]

"How "Six Sigma" can be applied in the operations of 'Hedging Funds'? "

[Sachin Arora]

My cousin is a Final Year student of MBA (Insurance) looking out for a Job. How can Six Sigma Certification help him in getting a job with good package in the Insurance Industry and what are the functional areas I can aim at after this certification.

[nitin raheja1314164363]

Chartered Accountants can work towards defect reduction and efficiency improvement in their audit practices. All the qualitative techniques covered in our green belt training are very useful for CA's

When CA is a part of a Six Sigma team, he has additional job of validating financial benefits (whether significant improvements have happened)

Most companies like to involve financial experts for validation of proposed benefits (in DEFINE phase) and validation of realized benefits (in IMPROVE and CONTROL phases).

 

 

[Vishwadeep Khatri]

Some feedbacks from participants from this sector can be seen here

[renu pareek]

thanku for this updated knowledge,could you pl provide me more information on six sigma in banking sector specialy loan deparment,account openeing

[Manish Pharasi1314164364]

Renu..Six Sigma Implementation is highly applicable in the areas you have mentioned. Below is the list of projects that have been done in the areas you have asked for.

Loan Department
1. Reducing the cycle time to Process a Loan Application (both Mortgage & Personal loans).

2. Improving the Customer Information gathering processes.

3. Improving the Credit Evaluation Process

4. Improving Productivity of loan processing agents


Account Opening
1. Reducing the time to open an account

2. Reducing errors in account opening process.

3. Reducing rework in processing customer applications


Other Projects in Retail Banking
1. Reducing the Credit Card Delivery time.

2. Reducing Bank Statements Processing & Delivery time.

3. Reducing the errors in money transfer

4. Improving accuracy, timeliness and completeness of customer communication.

5. Developing new products (timeliness, business potential)

6. Improving Market Share of existing banking products.

7. Improving the Branch Banking Processes


Hope this helps.

[smhabbas]

Hi I'm Abbas. I completed my MBA in Finance. I would like to know hw green belt help me in finance and particularly in which area. In my knowledge six sigma has more role in quality management.

Regards

Abbas

[santosh nethi]

Hi,

 

I work for a leading bank in credit card process. I am working as a quality assurarance  officer supporting operations of credit cards contact center. Please advice or suggest any topics which can help me in doing six sigma projects related to my work profile.

[Vishwadeep Khatri]

Dear Abbas,

You have mentioned that Six Sigma has more role in quality management as per your knowledge.

Please note that the concept of quality management has changed rapidly in recent years. Earlier quality department (for operations) and audit department (for finance and accounts) of the company were considered responsible for quality.

The recent concept is 'quality at the source' which means operations professionals are responsible for quality of their own processes. Similarly, Finance and Accounts professionals are being made responsible for quality of their processes. This is leading to quality department becoming smaller and smaller while six sigma 'belts' in each functional area are taking charge of 'quality at the source'

I am sure you will appreciate that it is better to control quality of inputs at the source (at much lower costs) as compared to inspecting or auditing outputs at the end (leading to high rework and failure costs). This fact relates to the core philosophy of Six Sigma.

These days, professionals from HR, finance, R&D, purchase, logistics, marketing, operations and various support services undergo six sigma programs to contribute to 'quality of the source'.

Another reason that has led to Six Sigma training among all disciplines is the fact that complex problems need cross functional teams to address them. All such team member to understand Six Sigma concepts and techniques well. 

Regards,

Vishwadeep Khatri

Lead Facilitator, Benchmark Six Sigma

  

[Thiru sambandam]

I am working as a accountant in pravate company. How is six sigma beneficial for  me.

Sambandam.

chennai

[R.Manjesh Kumar]

Hi Sir,

I am working as a admin executive in investment banking sector, and my qualification is PUC completed but some reasons i am unable to complete my B.Com final year,

But I am very much interested in Accounts......!

So can u tell Six sigma is help to me improve my carrier.....

How is six sigma is beneficial for me...

Thanks & Regards,

R.Manjesh Kumar

[PVSN Prasad]

Can any one help me in finding some of Green Belt projects belongs to Finance and Accounts in a manufacturing / construction  industry.

Regards

Prasad

 

 

[Jameel Ahmed]

Mr. Vishwadeep, 

I would highly appreciate if you could share any case study carried out in Banking especially in Quality sector. I am sure, with sharing such case studies, we would be in better position to further improve our understanding regarding effective implementation of Six Sigma in banking sector. Thanks,

[sapna.mv]

Vishwadeep,

I work in the IT development/delivery sector of a bank. The example you earlier mentioned are around improving banking operations. Do you have any material which you could share around reducing 'delivery time to market' ?

Thanks

[rohitjha.iitkgp]

How six sigma is helpful in HR Accounting?

[udeesha.upadhay]

Yes Sachin, I can assure you the program has changed my basic outlook in life

[Abhishek Mishra]

Dear Rohit,

In a payroll or HR Accounting process, improvements shall be mainly in timeliness and accuracy of processing. So the improvement objective may relate to either of the two.

1.Reduction in turn around time of processing without increasing errors OR

2.Reduction in errors (or improvement in accuracy) without increasing TAT (turn around time.)

Please feel free to ask more questions here.

Warm regards

AbhishekM

[Vishwadeep Khatri]

Hello All, In the video below, Udaya shares with us several Six Sigma projects in Finance domain at Flextronics.

/>http://www.youtube.com/watch?v=xYm6rGyfRR8

[Sampath KR]

Can somebody please enlighten me as to how the Sig Sigma can be effectively used in the Portfolio Management Industry?