Tom Jackson works at bank that is frequently experiencing delays in processing of loans due to regular errors and mistakes caused by employees. After witnessing an astounding level of operational quality and customer satisfaction at a hospital, Tom Jackson wants to know if similar levels of operational excellence can be achieved at his bank. This case study analysis the possible causes of errors leading to poor performance and offers solutions for the same.
Banks generally require a lot of paper work to be handed in on the part of applicants for loans to be processed. All of this data is then entered into the bank’s database and is used throughout the loan process all the way to approval. Staff at the bank would be required to extract customer data from the database and enter it into various applications to generate reports, conduct credit and reference check, verify eligibility and much more. As data is being handled by several people at different times, it is highly likely that staff could make errors when entering or retrieving data that could eventually lead to errors in the processing of the loan. The errors could be typographical or caused due to misplaced data. Either way, with human beings handling such a large amount of data, there are bound to be mistakes. The bank could reduce the risk of errors greatly by automating its data entry systems where data would be entered by a single person at a single point and would be distributed across all functions to be used uniformly throughout the loan approval process.
Cause of Errors #2: Poor Verification Process
Any organization, no matter what its size, would need to have stringent verification processes to identify and rectify errors. The high level of errors in loan processing at Tom Jackson’s bank shows that not only are mistakes being made but they are not being detected till the last moment either. If this is the case, then bank will need to revisit its verification processes to identify loopholes that could be causing errors to go unchecked. It is also advisable that the bank employs the aid of an expert process consultant to ensure the bank’s processes are optimized to improve overall efficiency and customer satisfaction.
Cause of Errors #3: Employee Attitude
Work at a bank can get quite monotonous. Employees handling loan applications have a defined set of responsibilities to carry out every day and repeat this task month on month. Although such repetitive nature of work should ideally reduce the number of errors due to practice, it can potentially create a complacent attitude among employees who could become careless and not pay attention while handling loan documents. If this is the case, the employees could be making several errors just because they are not motivated enough to be attentive. The bank should implement an effective rewards and recognition program to felicitate employees who have the lowest instances of errors in order to encourage them to make extra efforts to reduce mistakes.
