Lean Financial Services

1. Lean Financial Services Lean Industries Series

2. Topics What is Lean? The Financial Services Industry Lean Financial Services Applying Lean to Financial Services Benefits of Lean Financial Services Summary

3. What is Lean Thinking? Value Value Stream Empowered People Flow & Pull Perfection

4. 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

5. 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

6. 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

7. 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 customer’s 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

8. Applying Lean to Financial ServicesEliminating Waste • Over-Processing • Adding more work to a product or a service then necessary, trying to exceed the customer’s 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 customer’s requirement or having to manage redundancy in process.

9. 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

10. 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 what’s important, what matters to the customer and what delivers value