Due to the emerging need of quality management system
implementation in banking industry now is the time for us to move about
"paradigm shift". Following lines not only aware Pakistan
banking industry about this but also help to hold a timely place in new
quality management focused paradigm. Our commercial banks must pay
attention to this shift and start thinking strategically for providing
high quality products and services to customers. Up to date, a few
models linking quality management and the banking industry have been
developed (so far not implemented in Pakistan). A primary issue of
concern found is the need for our commercial banks to work perfectly on
the demand of, or response to, its customers' needs and wants. They
should determine where improvement is needed, how service can be
improved and where operating system breakdowns occur, why they occur and
how they can be banned. Bank managers through the suggested quality
models will be able to pinpoint areas where improvement could be made.
Moreover now they can manipulate to make bank-wide improvement in
quality performance. This quality improvement is taking place at a
revolutionary pace in services sector, now becoming simply good
management. We now see companies routinely averaging more than one
improvement per person per year, some even approaching one improvement
per person per week. This mounting pressure on the services sector is
due to the established fact that a defective product can be replaced but
a defective service may create a permanent damage. Due to this,
implementation of total quality management in services sector is
gathering vital status.
Before going for TQM paradigm, we
must look at the meaning of each word of TQM, Total: Everyone linked
with the operations is involved in continuous improvement (including its
customers and suppliers (if feasible); Quality: Customers' expressed and
implied requirements are met fully; and Management: Executives are fully
committed. In the service industry customers are more sensitive to
service quality and service delivery than in manufacturing because they
are always in contact with front-line service personnel as against
factory workers. These points-of-purchase contact or "moments of
truth" decide whether the customer will come back or shift to the
next door competitor. The banking industry, often the biggest service
industry in any country stands to benefit from TQM. For one basic
reason, banks depend on customer satisfaction and loyalty for their
survival, but ironically, very few really pay much attention to the
plight of their clients — before, during, and after sales.
QUALITY MANAGEMENT SYSTEM TRAINING:
For continual customer satisfaction
our commercial banks whether operated in public sector or run privately
should consider starting a total quality management (TQM) program to
upgrade and improve professional skills of the employees of the
country's banking industry. A first approach towards implementation of
the TQM is skillfully designed training programs. First the bank
employees should be imparted training on ISO 9000 systems and cost of
quality. These proposed programs will emphasize the need of excellence
in all spheres of management. The training should be imparted in two
stages i.e., first the employees might be provided with on-the-job
training about total quality management. In the next phase
industry-level seminars on TQM will be conducted at regular intervals
and the employees of different public/private sector banks will be
encouraged to attend such seminars. Educationists from different
educational and management development institutions or management
professionals from the industry should be invited at these seminars to
present their views on total quality management.
GOOD CUSTOMER SERVICE:
Good service in banking logically
begins with understanding customer needs and using these needs to drive
the good service or new product development process. Instead of solely
relying on the marketing research organization to define these needs,
team members (defined below) should meet with customers to gain a
first-hand understanding of their needs. They will find multiple
customer voices for improvement to a single service/product. This task
can be easily managed by using TabSan & TQM model. These voices of
the customers need to be satisfied that the service/product works
reliably as intended. Understanding banking customer's voice involved a
review of contract requirements, discussions with operations and
marketing personnel responsible for the accounts that had contractual
commitments as well as the discussions with the customer's specific
service design personnel. Voice of product design division provides an
insight and support for designing a good service quality measuring
PRODUCT ENDORSEMENT: If
this model (TabSan & TQM) is implemented deftly, will definitely
help to create and retain those customers who would not only buy but
also endorse your products and services. Customers are the best
salespeople because they are users of your products. Their desire to
endorse them to their friends comes from the sincere delight and
surprise. The company's salesmen are the least credible endorsers
because customers know they want to meet quotas and earn commissions.
The best quality strategy is to develop life-long customers by
continuously delighting and surprising them ahead of the competition. To
gauge your success in TQM, ask yourself this question: When your
customer buys your product or service, is he just buying it, or will he
also "sell" or endorse it to others? If you feel that he is
just buying, then rest assured that tomorrow he may be buying the same
product or service from your competitor.
TQM IN NEW TECHNOLOGY:
Bank management commitment to TQM is
a commitment to process innovation. Better known as reengineering, it is
the revitalization of why we do things the way we do them and how we
need to change. The result of process innovation is clear. Excess
capacity is one that results in ability to handle additional customers
or additional volumes from existing customers without degrading service
levels. Another result of process innovation is better customer service.
Because technology empowers individuals, they can make the types of
decisions that result in satisfied customers who talk about the quality
service they received. Finally, process innovation, whereby the bottom
levels on the companies organizational charts tell top management how
things really should be done, allows processes to be molded to more
closely shape the needs of customers.
CONFIGURATION MANAGEMENT: A
bank applying quality management practices can track as goals and
benchmarks those that matter to the customer: e.g. 1.
processing times of key products and services, like loans, new accounts,
ATM cards, credit cards, check encashment; 2.
waiting times like downtime and queuing time; 3.
customer complaints, written or verbal; 4.
friendliness and efficiency of staff; 5.
accuracy and timeliness of statements of accounts and records; 6.
effective interest rates, inclusive of all service and hidden charges; 7.
promptness in responding to customer inquiries such as in answering the
phone, the number of rings before phone is picked up, and number of
transfers before the caller talks to the right person. 8.
lost customers and accounts.
These service indices are as subject to audit regularly and
conscientiously as the bank internal auditors audit cash flows,
transactions, and balances. This can be accomplished easily by working
on configuration management principles and standards for audit and
control (functional configuration management, physical configuration
management). Bank auditors equipped with standards and stopwatches,
regularly check branch performance in terms of quality, service,
cleanliness, and value. They make sure all branches have the same
consistency in product and service quality. In other words, the
customers will not have any "surprises". Contrast this to
banks, whose service quality differs by branch, location, and branch
managers. To aggravate the problem, head office rates and promotes
branch managers based on the sheer business the branch generates: loans
released, interest earned, and deposits generated; they are seldom
evaluated on customers satisfaction, service, and complaints, most banks
therefore do not have a system to handle errors or customer complaints.
QUALITY MODEL: The
quality model that can effectively be used in banking for value added
services is "value analysis". This comprises of method study,
work measurement and job evaluation. Value analysis (VA) is a flexible
quality and productivity improvement model implemented in two parts
primary and secondary value analysis of banking products and services.
VA identifies errors caused by employees during their operations
followed by identification of appropriate corrective/preventive action
to eliminate service deficiencies.
CYCLE TIME REDUCTION:
Likewise Bank can improve total
customer satisfaction by investigating well-known manufacturing
methodologies as cycle time reduction (CTR), coupled with the detection
of defects using specified ISO guidelines with the help of empowered
teams, would result in significant improvements in process timelines,
cash management and customer loyalty and satisfaction.
IDENTIFYING DEFECTS USING ISO GUIDELINES:
Customers who initiate
electronic/manual funds transfers call their banker and then fax, phone
or mail in requests to have the transaction processed. Because of
complication of the process, customers complained. Most of the
complaints lodged with the department dealt with the time it took to
complete the process. Once bank employees had identified the primary
obstacles preventing them from achieving total customer satisfaction,
they would be able to correct the problems with the said guidelines.
These are achieved using simple tools such as the Pareto chart.
BANKING PROCESS FLOW: As
far as the banking services like granting letters of credit, buying and
selling foreign exchange, underwriting and dealing in stocks etc. are
concerned, work-flow (process) mapping is one of the fastest ways to
lower errors, increase productivity, and affect customer service.
It generally follows steps: A.
Choose a Service process. B.
Assemble a team. C. Map out the way
work is currently done. Diagram each step, showing decision branches,
time spent, any distances traveled or people contacted, and other
important aspects of the work. D.
Identify problem areas. E. Brainstorm
solutions. Identify all possible action steps for each problem area,
without evaluating them. F. Evaluate
action steps. Set up a set of "final" action steps by group
consensus. G. Assign
responsibilities. H. Create a master
plan. Summarize who has responsibility for what actions and the
deadlines. I. Follow through. The
meetings are useless without appropriate follow-through.
To put it briefly in banking industry our major
concern should always be to create satisfied customers. Hence, all
required systems, objectives, and measurements are designed revolve
around this TQM paradigm.