How Lean Banking Can Transform Your Institution and Why You Cannot Afford to Ignore it
Let’s start with the great news – financial institutions that are leveraging Lean banking operations achieve up to 30% cost reduction within 2 years, and are maintaining cost-efficient operations better than the average in the industry.
Lean processes are being adopted globally by organizations prone to inefficiency that are negatively affecting their earnings.
Why is Lean Banking a pivotal approach for the success of the financial industry?
Lean concept is the identification of areas of waste and inefficiency within an organization and application of proven methodologies to generate new solutions. Lean banks enjoy improved customer experiences, optimize their employees’ time, improve operations, and reduce waste and expenses.
Lean banking is the proven way to eliminate non-value-added activities in all areas of your banking organization.
If you are driven to build a company culture focused on efficiency, and aimed to streamline operations and processes, to achieve higher ROI, lean banking is the systemic approach to the best results. In the current economic climate, many financial institutions are still struggling to improve their credit and capital issues. The key solution might lie within the operational efficiency, and Lean methods’ adoption.
The Main 6 Benefits Achieved Through Lean Banking
Instead of primarily looking at cost reduction, Executives need to know that Lean Banking transformation will boost revenues. In the recent years, many banks have had lower revenues, and overhead increases have pushed organizations to reach out for better solutions. The decline in middle-market bank efficiency ratio is the driver for adoption of Lean banking initiatives.
Data Processing and Data Management Improvement
Some of the main issues banks faced regarding Data were inconsistency, inaccuracy, aging technology, manual reporting, disparate systems that lead to poor information quality. Lean banking offers solutions to modern banks by promoting fast, accurate and increasingly transparent information to support smart, informed business decisions. While lean banking helps your organization gain internal operational efficiency with faster more accurate data analysis, it also satisfies stakeholders and regulators providing them with the information they need.
Lower Capital Investment
Despite the broad effect that Lean banking has, the capital investment needed to support it is lower compared to other methods. Lean middle-market banking concepts are relatively easy to adopt and apply which will also contribute significantly to your organization’s bottom line.
Improved Client-Centered Organization
Some banks struggled in the past to provide excellent customer experience due to processes that are not geared toward the customers’ needs. However, as you identify and remove non-value-added activities, your end-goal should always be focused on who the customers are and what they value. By enhancing their experience, you will build up long term positioning and success.
Lean Thinking – for a Lasting Effect
At its core, Lean banking is a behavioral change. Reduction of costs is just one of the benefits. Your staff should be inspired to apply Lean Thinking on a daily basis. To achieve a high-performing organization, combine lean banking operations with the best practices that motivate your employees to continuously deliver excellent results.
More Control and Lower Compliance Costs
The cost of Regulatory Compliance can amount to a significant expense for financial institutions due to increasingly complex procedures. By leveraging Lean Principles banks and financial services companies, can successfully ease the burden of Compliance. Some of the highly effective methods that can be used are Eliminating redundancy, Streamlining operations and processes, Perioding monitoring of all systems to ensure Compliance, and constantly measuring Customer satisfaction through surveys, feedback, and team performance reviews.