Adapting lean for customized bank processes

Lean Operations tools, initially developed for the manufacturing sector, have seen numerous successful applications in service operations. Examples range from healthcare to banking and from professional services to insurances. However, most financial service applications reported so far have been related to highly standardized, back-office processes. In contrast, high value-added services often were seen as not suitable for the lean tools.

Applying “lean” to a new domain has almost always triggered the outcry of “these tools don’t apply to OUR business”. We have heard this outcry all too often over the last decade and – once again – this outcry is currently proven wrong as far as customized bank processes are concerned.

A recent McKinsey Quarterly article reports how a commercial lending process could be redesigned using lean principles, leading to 70% faster decisions at 30% lower costs. To achieve these results, the bank leveraged a combination of operational and organizational tools. On the operational side, work-flows were redefined, and each loan was assigned to one of four tracks. On the organizational side, the bank created cross-functional teams that challenged the previous silo mentality separating lawyers, credit analysts, and product managers.  

This is a great example how a combination of Operations Management tools with organizational insights leads to successful lean implementations. 

McKinsey Quarterly, August 2008

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