Lane Powell Shareholder Greg Fox authored an article in the July/August 2014 issue of Washington Bankers Association’s (WBA) Issues and Answers magazine titled “Lean Six Sigma: Are You and Your Vendors Sufficiently Focused on Process Improvement?” In the article, Fox discussed Lean Six Sigma, which focuses on the process, quality and elimination of variations and defects from products and services, and how it can help financial institutions improve their loan application and documentation processes.
The Lean Six Sigma methodology is broken into five steps: 1) define the problem; 2) measure the current performance; 3) analyze opportunities to reduce waste or variation; 4) improve the process by implementing and testing process changes; and 5) continuously evaluate the improved process. In the first phase, the organization identifies an area for improvement, such as an administrative process or production area where bottlenecks occur or areas where everything is a “mess.” In the banking world, relevant questions that could lead to the identification of a problematic process include: How many hands touch a loan application and the related underwriting file before a loan is approved and funded? Do multiple employees gather and input the same information on a single account? Do the inefficiencies delay loan funding and the collection of loan fees and interest income? What’s the process for documenting a commercial loan? Is loan servicing using the same criteria for security instruments and title endorsements on each commercial real estate loan? Is there a way to streamline the process for periodic reporting so loan officers spend more time generating business and administering loans than compiling data and preparing reports?