How to implement 5S In Banking & Finance Sector
Banking sector has come forward through a long way with many advancements.
Some of the common features of best in class banking operations are:
- Fast service
- Customer centric
- Minimal down time
- Flexible to interact
Unfortunately, there are still more than 50% of the banking system is still outdated and works in old out fashioned way.
For those who have seen or experienced the earlier versions of traditional banks the following features are evident:
- Cumbersome processes
- No customer focus
- Very time consuming to get a job done
- Unreliable systems
- Not easily accessible
Most of the young generation might think that technology has made the banking sector changed towards better. While technology is definitely one of the key factors, there are other major contributors which have helped banking organisations which is called Operational Excellence in the Banking sector. Methodologies such as 5s, Lean office and Lean Banking have helped largescale banks improve their overall effectiveness and optimized cost.
In one of the articles published by a major private it is claimed that savings of implementing operational excellence concepts is about 7.5 crores per annum from one integrated branch of the bank. Out of this savings, 50% contribution was from implementation of 5S methodologies alone.
The main goal of any organisation is to make sustained profit and be in the business and grow. Banking & financial sector goals are also no different from that. Recently we are seeing a lot of mergers among banks to reduce the losses among banking sectors. This is a strategic approach from the top to improve profitability of banks.
There are few management tools which implemented in the banking sectors will improve productivity to a larger extent and also improves customers’ service. 5S & Lean Banking are two major concepts.
5S is one of management concept also called workplace organisation, used in all sectors like manufacturing, hospital, restaurants, malls, airports, schools and all other places. It was popularised to a greater extent by Japanese industries and now it is followed by other countries and implemented across sectors. Recently 5S is being implemented in many banks. Even though it is simple, but a powerful concept.
In banking sector even though most of the transactions are online, still lot of papers work exists and needs to be stored by the banks for quick retrieval. For example, if customer wants address change or some additional facility like sms alert, he/she has to fill form & submit and the bank staff will not update the data immediately. They will receive forms and update later. In case they miss to update for one customer and if customer comes back later to find out the status, first this bank employee does is to cross check whether customer has given application. It will be very difficult to pull out the application, because customer may not remember the date on which application was given. This will take lot of time at the counter and other customers will be waiting & shouting. Through implementation of 5S, these types of problems could be solved to major extent.
Related Article– How to implement 5S and safety improvements in organisations
Also, banks store a lot of papers/files connected to loans, claims, deposits etc. These files will occupy a lot of space/cupboards. If unwanted files are not disposed of regularly, there may not be space for new files and new files will be dumped on the floor or wherever space is available and retrieval time takes a lot of time.
Banking is a very large sector where organisation structure normally includes Head office in each big city and many branches. For recruitment, HO stores a lot of resumes. Even after shortlisting, many resumes may not get discarded immediately. Then it will take a long time to dispose of these files and it occupies huge space.
Now there are many microfinance companies which finance small vendors. In these sectors not much computerisation is done. Many times, individual accounts and manual pass books are maintained. If disposing of closed accounts is not done at the right time, it will occupy a lot of space. Also running accounts passbooks to be maintained and for regular transactions they have to be retrieved quickly.
Few examples of 5S activities in the banks are labelling different cupboards with different colour sticks, counter identifications, general instructions for customers, Key management – identification of Keys and entry in a register when somebody takes it etc., listing of all files in the bank and their location etc. These activities will help in reducing retrieval times which improves productivity of bank staff as well as customer waiting time. Under 5S principle, there is an accepted standard for retrieval time of 30 secs. If 5S is properly implemented any paper/pc file/items can be retrieved in less than 30 secs.
Also, banks can save huge money by reducing offloading of warehousing of documents by creating more space in the available premises.
5S is a people driven initiative and implementation will be challenging in banking sectors as employees have to spend additional time other than banking hours. Also once it is implemented, to sustain and improve the initiative, management has to implement award schemes either individually or branch wise which requires big effort from management. One of the methods for sustenance and improvement is, at the end of each day 10 min discussions to be held along with all staff to get ideas on what problems they faced on that day and what is the idea for further improvement.
However, the benefits of implementing overweigh the effort required for implementation. Few benefits are huge cost saving, productivity improvement, improvement in customer service and it changes the culture of bank working. 5S is also a prerequisite for implementing other bigger concepts like Lean or Six sigma.
Related Article– Frequently asked Questions on Lean Six Sigma Certifications
Seven Steps Academy of Excellence is a member of Seven Steps Group company. We conduct training programmes on 5S for office and banking sectors both as public training programmes and inhouse training programmes. Hand Holding and facilitation in the workplace is done through their group company Seven Steps Business Transformation Systems. Our lean office and 5S consultants specialized in banking sector helps organisations in strategizing 5S implementation and effective deployment for sustenance.
For further inputs on road maps, case studies and how we can further support you in 5s implementation in your organisation, please write to us through contact form.
Seven Steps academy also conducts other training programmes such as Lean Six Sigma Green Belt, Lean Six Sigma black belt, Lean Six Sigma Master black belt, Lean Six sigma Yellow Belt, Lean Office and banking, Lean Daily work management systems, Lean 5S etc., for service industry which includes Hospitals, retail, insurance, education, front office operations, government services such as passport office, railways, bill processing, call centres, toll operations, colleges, municipal corporation offices, collector offices etc.,