LTSB - Blitzing your processes does pay off

The extra load of compliance costs looked inescapable. The figures for opening new current accounts, were very worrying:

• Volumes had plummeted - new accounts were down from 40,000 a month to 20,000.
• Processing times had nearly doubled and applications had to squeeze through extra checking levels, including a new 100-strong unit at head office.
• Rejected applications had increased by nearly 50% - managers were getting their knuckles rapped so often they added extra checks to protect themselves.
• Branch staff had begun avoiding new customers for fear of being pulled up for submitting imperfect applications.
• Customer complaints had grown and many customers were going to the competition.

The challenge was clear - find a way to deliver perfect applications at the old volumes with fewer people.

The bank assembled a team of 15 people. Most were front-end branch staff operating the existing processes. The rest were central Compliance and IT staff. The Head of Current Accounts launched the team on a four-day session to apply Setanta's Service Chain Blitz. Staff dissected and rebuilt the account opening process. Forms, tools and procedures were revised - and agreed on the spot by Compliance.

Perhaps the most telling moment was when branch and head office staff came clean about their mutual misgivings. Branch staff challenged: Your job is to find mistakes in what we do. Central checkers retorted: "You must be joking. Every time we find a mistake, it makes more work for us."

Once both parties realised they were on the same side, ideas for improvements came tumbling out. Two examples make the point:

• Application forms for new current accounts had nine pages of close-typed questions, then a free-form page to expand on earlier answers. Branch staff knew what the customer's words on the form meant, because they were face to face. But central checkers rejected applications because they noticed apparent inconsistencies with the answers. Simplifying the free-form page removed misunderstandings and reduced rejections and delays.



• Once branch and head office staff realised they had the power to make changes, they compared notes in detail - and discovered that they both used different checklists. Agreeing a single checklist ended a lengthy series of previous disagreements.

The team presented their redesigned process to senior managers, who agreed to a thorough field test. Ten branches were selected to operate the new process for four weeks and were measured against two control branches.

Four weeks later, based on the test results, the team presented a detailed, costed improvement plan to senior stakeholders. The numbers were impressive:

• Right first time rates were up from 60% to 96%, with the most worrying errors eliminated entirely.


• Branch processing times were down by 27 minutes per new account, saving 10,000 man-hours each month at target volume levels.


• A whole layer of checking was removed, saving another 18,000 hours a month.
  
• Above all, front-line staff were enthusiastic about the new process.

Within two-hours, a 2,000-branch roll-out plan and 12 significant changes were approved. The roll-out would move more than 100 people out of checking roles into value-added activities. The Head of Retail Banking was thrilled. These are superb results,he said.

On the day the bank decided to roll out its improved process, regulators fined another British bank £750,000 for compliance issues over its process for opening current accounts. As the bank's Director of Current Accounts put it: That's a bullet we just dodged.