Lean Financial Services

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Lean Financial Services

• Lean Industries Series

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Topics

• What is Lean?
• The Financial Services Industry
• Lean Financial Services
• Applying Lean to Financial Services
• Benefits of Lean Financial Services
• Summary

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What is Lean Thinking?
Value
Value Stream
Empowered People
Flow Pull
Perfection
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The Financial Services Industry

• Financial Services refers to services provided by
  the finance industry.
• The finance industry encompasses a broad range of
  organizations that deal with the management of
  money.
• Financial organizations include
• Banks
• Credit card companies
• Insurance companies
• Consumer finance companies
• Stock brokerages
• Investment funds
• Government sponsored enterprises

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Lean Financial Services
Operations executives in the financial industry
struggle to find new ways to reduce cost while
delivering high-quality service. Lean concepts
enable financial institutions to expand existing
cost-reduction opportunities while simultaneously
creating customer value.
Customer Value
Costs
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Applying Lean to Financial Services

• Research identifies four core capabilities
  necessary to embed Lean in a financial
  organization
• Value Skeptical Lens
• Uninterrupted Operations Flow
• Link Customer Value to Employee Performance
• Sustainable Transformation

Operations CouncilTM
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Applying Lean to Financial Services

• Tools and frameworks to use to implement Lean
  concepts within a financial organization
• Perfecting Processes Tools to Reveal and Reduce
  Process Waste

How do I assess my Lean Status?
How do I see hidden waste?
How do I measure hidden waste?
How do I visually depict processes from a
customers perspective?
How do I determine the best way to eliminate a
non-value added activity?
How do I see impediments to process flow on the
shop floor?
Challenge
Seven Wastes Table
Work Study Sheets
Lean Diagnostic
Value Stream Mapping
Waste Reduction Decision Tree
Tool
Visual Cues
Determine areas to begin or extend Lean
implementation
Label waste according to the 7 waste categories
Capture measure the 7 types of waste in each
activity
Take a complete view of the process to uncover
waste
Prioritize waste reduction tools to efficiently
inexpensively eliminate waste
Deploy inexpensive visual cues to make process
flow visible
Description
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Applying Lean to Financial ServicesEliminating
Waste

• Over-Processing
• Adding more work to a product or a service then
  necessary, trying to exceed the customers
  requirement
• Adding more value to a product or the service
  then what a customer is willing to pay for
• Example posting of a hard copy financial
  transaction when transactions were conducted
  virtually or duplication in processes die to the
  requirement of several managers to sign-off on

Over-processing is typically caused by not
clearly understanding the customers requirement
or having to manage redundancy in process.
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Benefits of Lean Financial Services

• Research from the Corporate Executive Board finds
  that financial firms leveraging Lean techniques
  achieve 20 to 40 cost reduction in 12-18 months
• Drives sustainable service and cost improvements
  that are not achievable with other improvement
  tools
• Creates a continuous improvement mindset
  throughout the culture, starting at the top

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Summary

• Traditionally operating service-businesses
  represent a vast opportunity for improvement
• The key is for financial institutions to focus
  not only on the operational manifestations of the
  problem (the tailored processes and ineffective
  handoffs that slow down turnarounds), but also on
  the organizational shortcomings that inhibit
  collaboration, accountability and a sense of
  common purpose among teams
• Lean Financial Services focuses on whats
  important, what matters to the customer and what
  delivers value