click here to download and print

Situation Analysis: ClientCo, provides banking and financial services to eight states in the Northeast through its network of 700 branches.

ClientCo faced increased competition from larger money center banks, electronic banking alternatives and aggressive, new, non-bank lending competitors. The product of several mergers, ClientCo's operational capabilities needed rapid improvement to meet these new competitive challenges.

Improvements Identified: A management committee, led by ClientCo's chairman, selected The Lab to work with an internal team to analyze the 10,000 employee organization. Over a eight-week period, this joint team used The Lab’s banking operations templates to identify over 1,200 non-technology improvements in all areas.

1. Over-service in Retail Branches — Despite an existing sophisticated staffing model, analysis identified extensive costly levels of service [e.g., zero-wait-time]. Since customers do not place a correspondingly high value on these services, no competitive gain is achieved.
2. Sales Producer Downtime — Revenue generation productivity was reduced by an average of over 20% by factors such as: ad hoc customization of offerings, terms; lending officers performing administrative tasks [downtime].
3. Back Office Re-work — In some areas, up to 60% of organizational capacity was devoted to correcting and completing inbound work products: loan applications, account openings, wire transfers, and others. Over 70% of the related improvements were non-technology. Existing improvement initiatives were technology-driven [>85%].
4. Overlooked Support Groups — Although largely overlooked as sources of benefits, improvement opportunities in the Finance, HR, IT and Marketing groups outnumbered the Back Office by more than 50%.

Overall Results: The Lab helped an internal team of 14 ClientCo employees implement a self-funding improvement program that delivered over $58 million in recurring annual savings—half of which was accrued by month 12 of the project.