Six Sigma: A Tool to Increase Customer Satisfaction at Bank of America

Back ground of Bank of America

BoA was formed in 1998 through merger. It helped in enlarging customer base. Low customer delight score. Six sigma quality initiative in 2001. Focused on reducing the errors in transactions.

Six Sigma in Service Industry

y Major difficulty in service industry:  Measurement of quality and quantity of service  Deciding on whether the defect was a quantitative or qualitative one  Heavy reliance of this industry on employees for quality and quantity of service rendered y 4 major points to be considered to ensure a sensible

Six Sigma measurement in Service Processes:

   

Right level of measurement Accounting for variability Right emphasis on quantitative vs. qualitative measures Interpretation and management support for change

Impacts of Six Sigma in Service Industry

More importance to provide more value per customer in a transaction than securing large transactions Quality provided by a service began to be measured through value additions it resulted in and rate of customer satisfaction it generated Customer delight was greatly stressed upon

6 Sigma Journey at BoA

Increase in size & Securing large number of Customers Inefficient Processes & Poorer Quality

Organic Growth Strategy

6 Sigma Journey at BoA

y Low customer delight. y Adoption of Six Sigma Quality control-2001 y Applied in three ways:   

Core process performance Matrices As a Business Approach As a Leadership Philosophy

Core Process Performance Matrices

y Used to arrive at Standards for each branch & each

banker.
y Voice of Customer data & Critical to Quality

indicators from customers.

y Only 20% of employee were generating 80% of sales. y Fixed benchmark of 90% in customer delight. y Focus shifted to customer relationship

Core Process Performance Matrices

y 6 sigma for increase in investments in IRA & CD  

Through relationship banking Reduce in response time (3 days to 10 min)

y Enhanced customers experience in ATMs, telephone

banking & net banking.

Business Approach

y Six Sigma was applied to entire value chain    

Analyze business process Identify problems Increase efficiency Reduce errors

Leadership Philosophy
y To lead entire organization towards predetermined

goals.
y Recruited senior Six sigma professionals  

Quality training to employees Selection of Top business priorities

Cultural Transformations within BoA

Doing the right thing Trusting and team work

Core Values

Inclusive meritocracy

Winning

Leadership

Cultural Transformations within BoAContd.

y Provision of Black Belts and Master Black Belts to all

teams in company.

y Score cards were introduced to promote fair competition

 

Each team had to use quality tools efficiently to score well Quality tools being used along with six sigma.

y Weekly short term scorecard also began to be maintained to

encourage competition between the teams.

y Employees were given recognition through awards for

building long term relationships with customers rather than acquiring more customers.

The Gains
y Gained more than US$ 2 billion through significant

cost savings & revenue generation from 2001 to 2003.

y Reduce 70% of errors & missing items in customer

statements.
y Reduced 88% of ATM , telephone & online banking

errors.
y Increased customer delight to 50% .

The Gains
y Number of accounts were increased by more than 1

million.
y Achieved 36% in same day payments processing 47%

in deposit processing.
y Sped up the process of merger b/w BoA & Fleet. y Post merger, Largest consumer bank in the US. y In 2005, 5800 banking centers & 16700 ATMs

Revenue & Income of BoA

60000

Revenue
50000

Income
48894

40000 32931 30000 34638 34503

37914

20000 14143 10000 7517 9249 6792 10810

0 2000 2001 2002 2003 2004

Conclusion

Six Sigma enhanced the customer delight ratings of BoA and also improved revenues, while creating longterm customer relationships and a quality culture within organization.

Thank You