Six Sigma proves to be perfectly suited to the needs of the service industry, which is in constant contact with customers and has customer delight as its top priority. The banking sector has found the benefits to be reduced cycle times, better cash management, reductions in complaints due to defects and overall customer satisfaction from improved performance. Financial institutions like Citibank, Bank of America, and many more have achieved great results from Six Sigma initiatives.
Let’s take a look at how Six Sigma plays an important role in the banking sector.
Improves customer satisfaction: The customer is king and customer satisfaction is the deciding factor in a bank’s efforts to achieve higher profits. Six Sigma projects involve defining objectives and opportunities in consultation with bank employees, as well as top management. There may be an opportunity to improve, based on customers’ feedback or complaints received. Unless the project definition is done correctly, taking further steps would be a waste.
Monitor performance: Data plays an imperative role in the banking sector because it helps the professional to track how processes within a bank are initiated. Six Sigma professionals to collect data regarding bank operations in consultation with top management. With the help of data. the customer waiting time, the services offered, the satisfaction level of customers, facilities, etc. are measured. The data also help them to find out the amount spent on each customer. If the performance level slows down considerably, then the prime cause of the process problem is identified and solved by using Six Sigma approaches.
Uplifts profit and reduces cost: these days the customers are choosy and each one has a unique requirement. With the help of six sigma approach, banks are able to identify the specific needs of each customer eliminating process inefficiencies, and errors and enhance customer satisfaction. At the same time, they are offering better customer services to them. Better services and facilities increase customer retention rate which will help the bank in getting more profit.
Avoids banking errors: it has become an important role for the banks to measure and conduct an assessment of the processes before and after the implementation of key measures. In such a case, customer satisfaction level can be measured before implementing sigma approach and after taking corrective measures. Besides this, Six Sigma approaches can be employed to eliminate mistakes in calculations, errors in order to provide efficient and updated banking services to customers.
Eliminate delays in a process: If a bank faces any problem, they should try to implement new approaches. Problems such as delays in providing any facility such as loan or mortgages have a great impact on the level of customer satisfaction and rate of retention of customers. A bank can easily conquer all these problems by applying Six Sigma approaches to offer better customer services. In this way, the retention rate will also increase.
These are some areas where Six Sigma approaches can be applied in the banking sector. Banks which have already adopted Six Sigma applications can enjoy an edge over their competitors and can successfully establish their presence in the market even in this competitive banking industry.