A Prominent US Top 20 Retail/Commercial Bank Achieved Six Sigma Quality in Lockbox Operations
Overview.
Our client, a prominent U.S. Top 20 Retail/Commercial Bank faced significant challenges with its lockbox operations, primarily due to quality issues, processing errors, and missed deadlines. These challenges resulted in uncompetitive pricing, customer dissatisfaction, and penalties.
Coforge's expertise transformed their lockbox function, delivering significant improvements in quality, reduced processing errors, and enhanced operational efficiency.
The bank faced challenges with processing errors, uncompetitive pricing, and frequent missed deadlines, all of which negatively affected customer satisfaction and profitability.
The key challenges faced by the bank included:
Processing Errors: Frequent errors in processing led to penalties and a loss of customer trust, undermining profitability.
Inconsistent Quality: The bank struggled with inconsistent service levels, which resulted in missed deadlines and unfulfilled customer expectations.
Uncompetitive Pricing: The outdated lockbox offering made it difficult to attract new clients and retain existing ones due to uncompetitive pricing.
Solution.
Coforge undertook responsibility for Lockbox processing and introduced a thorough solution to tackle the bank's quality and processing challenges. By centralizing workflows, automating business rules, and expediting team training, Coforge enhanced the bank's lockbox operations, leading to increased efficiency and improved service quality.
Rapid Knowledge Transfer & Training: Intensive training programs enabled the new team to efficiently manage both retail and wholesale lockbox volumes, quickly increasing their proficiency in handling the bank's requirements.
Centralized Workflow Management: By establishing standardized processing queues, the workflow became more organized and efficient, reducing errors and ensuring a smoother operation.
Automated Business Rules: Automation of business rules in the database for each lockbox client eliminated manual errors and significantly reduced processing time, with a guaranteed turnaround of just 2 hours.
Remote Migration: A successful remote migration of 29 FTEs ensured minimal disruption while enhancing the team’s ability to meet the high-volume processing demands.
The Impact.
The solution resulted in annual savings, reduced headcount, and significant quality improvements.
Processing Efficiency: The streamlined workflows and automation reduced processing errors, which translated into faster and more reliable service. The turnaround time for processing items was guaranteed at just 2 hours, ensuring higher customer satisfaction.
Quality Improvement: The overall quality of the lockbox operations saw remarkable enhancement, with defects per million (DPM) dropping from 16 in 2006 to 3.4. Retail lockbox performance improved from 4.7 Sigma to 6 Sigma, achieving an accuracy rate of 99.9989%, while wholesale lockbox quality advanced from 4.0 Sigma to 6 Sigma, reaching 99.9998% accuracy. This significant reduction in errors resulted in a substantial decrease in penalties and customer complaints.
Cost Savings & Operational Efficiency: The bank saved $1.6 million annually by outsourcing, while also reducing headcount from 68 FTEs in 2020 to 28 FTEs in 2023. This reduction in resources was achieved without compromising service quality or efficiency.
