Application of Lean Six Sigma Methodology in Design and Improvement of Financial Services
Since the day of its inception at Motorola Inc., Six Sigma methodology has been widely used in process improvement by companies all over the world including financial institutions. Users of Six Sigma strive to achieve competitiveness through improving pro
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Application of Lean Six Sigma Methodology in Design and Improvement of Financial Services Ulas Akkucuk
Abstract Since the day of its inception at Motorola Inc., Six Sigma methodology has been widely used in process improvement by companies all over the world including financial institutions. Users of Six Sigma strive to achieve competitiveness through improving processes. In recent years, ‘‘Lean’’ principles have been merged with the Six Sigma approach in what is known widely as Lean Six Sigma. Six Sigma is not only applicable to manufacturing but also to the service sector. With growing competition in the financial services sector, Six Sigma principles can be used to cut costs, increase efficiency and thereby help companies to stay afloat in the global economy. This paper will try to outline how Lean Six Sigma principles can be used to continuously improve service operations with special emphasis on financial institutions such as banks, insurance companies, individual pension systems, brokerage firms and others. A demonstrative case is also provided on how the principles can be applied in the context of a pension company.
11.1 Introduction In today’s era of globalization, many financial institutions, especially banks, are facing a growing wave of competition from all over the world. Turkey is no exception to this global trend. According to the Turkish Union of Banks (TBB 2013a) there are 45 banks in Turkey as members of the union. Among these only 3 are public banks, 12 are private banks (including the major players such as Yapı _ Bankası, Garanti Bankası and Akbank), 10 are foreign operated banks Kredi, Is (such as Citibank, Denizbank), 6 are foreign banks with just branch operations (such as JP Morgan, Bank Mellat), 1 consolidated bank belonging to savings deposit insurance authority of the Turkish government (TMSF), and the remaining U. Akkucuk (&) Department of Management, Bogazici University, Istanbul, Turkey e-mail: [email protected]
H. Dincer and Ü. Hacioglu (eds.), Globalization of Financial Institutions, DOI: 10.1007/978-3-319-01125-7_11, Springer International Publishing Switzerland 2014
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13 are development and investment banks of which also 4 are foreign. With increasing involvement from global players it becomes important for the members of the banking sector to remain competitive. Table 11.1 provides the most recent figures on the number of branches operated by the most prominent banks in Turkey (TBB 2013b). These banks constitute 90 % of the total number of branches in Turkey. There have been many useful innovations in the financial services sector since the 1960s. It used to be at some point that checks and cash deposits were the main operations of a bank. Credit cards changed the face of banking with the ability to pay with a plastic card. Even then, the card needed to be physically swiped and checked against a book of blacklisted card numbers. IT technologies further changed the face of banking with the ability to communicate online with the main servers. In a s
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