Six Sigma in Credit Card operations by qingyunliuliu


									Insights                                                                                                   ECS Limited

Six Sigma in Credit Card operations
                                                                    ECS helped a leading multinational bank to establish
                                                                    new standards in their credit card customer
                                                                    acquisition process, using Six Sigma.

                                                                    A leading multi national bank retained ECS to establish
                                                                    new standards in their customer acquisition process

                                                                        Benefits achieved:
                                                                           Over 65% reduction in end to
                                                                              end turnaround time
                                                                           Reduction in errors over 50%
                                                                           Cost per transaction reduced
Plastic Money comes of age!                                                   by over 20%
“To spend is no longer a Sin!” declared the consumer
pundits. The Financial World responded enthusiastically
& intensified their sales efforts, trying to woo customers
with their credit card offerings. Result- a market                  The bank‟s rapid customer acquisition over a few years
witnessing large growths in the card base & large number            had resulted in high turnaround time of processing, low
of players                                                          straight pass percentage and increased errors in
                                                                    transactions. The bank needed to reduce the turnaround
Spends & Customer Experience
                                                                    time in customer acquisition, eliminate errors and reduce
However, persuading the customer to take the credit card            the cost of operations, while delivering cutting-edge
was only like winning the toss! The true challenge was to           service.
get the customer to spend on the card and make him pay
the much-avoided annual fee in the „One Customer,                   The diagnosis of the customer acquisition process, which
Multiple Card‟ scenario.                                            spans from application to customer receipt of card and
In this scenario, one bad experience by the customer in             pin, identified significant value potential in incremental
service delivery would make the bank lose the customer              margin and cost leakage avoidance/ reduction.
forever. The domino effect created by Negative Word-of-
Mouth could spell disaster for a serious player.                        Insights out of the experience
  CEO dilemma                                                            Differential processes for Green
  “How do I reach a „Zero-defect‟ state and                               Channel Applications & potential
  provide quick, responsive & hassle-free                                 deliquent customer can crunch
  service delivery to customers to become                                 TAT for vast majority of cases
  the most preferred payment mode?”
                                                                         Benefit of reduced effort on
Since first impression is not only the last but the only
                                                                          ultimately rejected cases
impression, it is important to give speedy and hassle free
delivery of the card to the customer. For the Banks, on                   outweighs the risk of pushing
the other hand, it is an unsecured exposure and requires                  the decision logic upstream in
careful scrutiny & credit buying. This calls for                          the process
meticulous thinking-through for the card issue process.                  Real time tracking of every
Also ever-increasing transaction volumes and card base
                                                                          customer request to capture the
put a strain on service delivery capabilities thereby
posing serious “Customer retention” challenges.                           customer‟s experience of the
Fortunately, Six Sigma as a methodology could be                          process
effectively put to use to attain these Business Objectives

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                                                               ECS Limited, a 50:50 joint venture between Eicher
    ECS ‘s unique methodology for SIX SIGMA in                 and Strategic Decisions Group (SDG), is a premier
    banking sector is based on understanding                   management consulting firm in India. Its consulting
    customer expectations, mapping the existing work           practice covers Strategy, Operations and Human
    flow, information and decision-flows and defining          Resources.
    the process metrics. Bringing all customer &               Experience in Banking & Financial services
    management issues and expectations to the
                                                               ECS’s pioneering work in the Banking & Financial
    surface led to an understanding of their impact on
    process metrics. Finally, measurement of the               sector has resulted in significant improvements in
    process metrics gave the extent of variability in          Turn Around Time and Customer Service while
    service experienced by the customer.                       substantially reducing costs in the areas of:
                                                               Retail banking
           Key initiatives :
                                                                   Account         initiation,   centralization   of
            Aligning processes with                                   operations, secured and unsecured retail
             customer‟s experience                                     lending,      depositories     and      branch
            Deploying customer &                                      transactions
             shareholder voice into the                        Wholesale banking
             process                                               Trade finance, asset management, corporate
            Different processes for green                             banking, cash management services,
             channel and „non green channel‟                           working capital loan, term loan & corporate
            Recreating the processes from a                           Internet banking
             „clean slate‟ such that defects                   We partner all our clients from concept to
             are not produced in the first                     implementation. Typical results of implementation
             place                                             have been a significant reduction in turnaround time
            Monitoring key process metrics                    and cost along with increased productivity and
                                                               reliability of business processes.
                                                               Some of our leading partners include American
    In addition to the monetary benefit, the Six Sigma         Express, Citibank, ICICI Ltd, ICICI Bank, ICICI
    initiative resulted in the gain of several intangible      Housing     Finance,    GE  capital,  Standard
    but invaluable benefits, such as:                          Chartered, Vysya Bank, IDBI, Max New York Life
                                                              and ICICI Prudential Life.
            A process focused organisation
            Clarity on changed roles                          Offices:
            Process to manage contingencies                   Mumbai office
                                                               A Wing, 401-408,Crystal Plaza
            Higher sensitivity to customer service
                                                               New Link Road, Andheri (West)
            Measurement driven quality improvement
                                                               Mumbai – 400 053
            A continuous improvement culture                  Tel : 022- 26733632, 26733236, 26733229
            Change Management skills                          Fax : 022- 56902328

                                                               Delhi office
                                                               804,Signature Towers
                                                               Tower A, South City
                                                               Gurgaon, Haryana – 122001
                                                               Tel: 0124-2383301/02,2383297
    Contact for details                                        Fax: 0124-2383295

    S. V. Sukumar is a Vice President & Harsh Bisht            Bangalore office
    a Principal Consultant at ECS Ltd [At Mumbai]              29/30, Kasturba Road Cross,
                                                               Bangalore – 560 001                                Tel : 080 –2270820, 2277153                                Fax : 080 – 2271720
                                                               Web site:

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