Towards Improving Banking Services Quality - 23 - Lean Banking and Quality Management

Towards Improving Banking Services Quality 23. Lean Banking and Quality Management   Lean banking and quality management are both approaches that can improve banks' processes and ultimately their services, but they differ in their focus and methodology.   Lean banking focuses on eliminating waste and improving efficiency by reducing the time spent on non-value-added tasks. Lean management originated from the Toyota Production System, developed after World War II. Lean banking can lead to operational improvements and increased customer satisfaction.   Quality management focuses on continual improvement and customer satisfaction by instilling a quality consciousness throughout the organization. It involves a commitment from all levels of the organization to improve processes, products, services, and culture.   Lean banking relies on value-added activities, structured problem-solving, and eliminating non-value-added activities, while quality management adopts a standardized approach. Banks can find success by combining and implementing elements of both Lean banking and quality management.   The key difference between these two is that Lean methodologies focus on the value stream and process efficiency, while quality management focuses on consistency and compliance. Lean banking and quality management share common goals of customer satisfaction, continual improvement, and streamlining processes.   Lean banking implements Lean management principles, which are built upon two core pillars and five foundational principles. The two pillars of Lean management are continuous improvement and respect for people. The five foundational principles of Lean management are:   1.       Identifying value,   2.       Mapping the value stream,   3.       Creating flow,   4.       Pull, and   5.       Seeking perfection.   ISO 9001:2015 Quality Management System is built upon seven quality management principles:   1.       Customer focus,   2.       Leadership,   3.       Engagement of people,   4.       Process approach,   5.       Improvement,   6.       Evidence-based decision-making, and   7.       Relationship management.   The Plan-Do-Check-Act (PDCA) cycle is applied to all processes and the quality management system to achieve enhanced customer satisfaction.   This series of articles discuss in detail Lean management pillars, foundational principles, and Lean tools that can be applied to Lean banking. All these Lean tools can support the quality management objective of enhancing customer satisfaction. Risk-based thinking, as stipulated in the ISO 9001:2015 QMS standard, provides ways to address risks and opportunities to prevent or reduce undesired effects (non-value-added activities) and achieve improvement.   Lean banking and quality management both aim to enhance customer satisfaction, streamline processes, and foster continual improvement. While Lean banking focuses on efficiency through the elimination of waste and maximizing value-added activities, quality management ensures consistency, compliance, and a culture of excellence. For instance, a bank might use Lean tools like Value Stream Mapping to optimize loan processing workflows while adhering to ISO 9001:2015 principles to maintain compliance and improve customer trust. Together, these methodologies create a robust framework that supports both operational excellence and strategic growth.   Lean banking and quality management systems are both valuable for improving a bank's functioning. Both complement each other. Banks should consider adopting and implementing both Lean banking and ISO 9001:2015 QMS to stay competitive.  I welcome your comments, questions and suggestions.Warm regards,Keshav Ram Singhal