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What banks can learn from airlines

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18 February 2014

Comments

  • Great points, these are very valid current topics. Being human is one that I think is forgotten often.

    Thanks for sharing.

  • I was stuck at the Dallas airport last week (storms). So here are the capacity and performance calculations I ran while waiting in a huge line to check my baggage (freezing rain so no outside check in).
    Time wasted using utilization law:
    I was wondering how much accumulated time my fellow travelers wasted standing in line W=X*S (or also known as U=X*R)
    X= counted 60 people in line
    S= length of time I waited 30 minutes.
    W=time of all requests.
    For these 60 people the airline wasted 1800 minute of total customer time. If you look at the arrival rate for the whole day this would be an even bigger number for the daily waste. Okay more calculations…

    Little’s Law:
    I next wondered how fast people were entering my line every minute with all the flights and flight cancellations. I got a surprise for an answer:

    L = A*W or A=LW (L number of customers in the system, W average time in the system & A is what I want to know)

    We had only 2 check in clerks (the airlines were not prepared for storms)
    I observed (will post my iphone video so you can see the line):
    50% of travelers check in bags taking 4 minutes each (BF 1)
    50% of travels arrange a new flight (east coast was shut down) 8 minutes each (BF 2)

    So with 2 check in clerks the average person was 6 minutes at the counter. (B1+B2)2. The business
    functions had about the same amount of people requesting them. Many people had weather related flight cancellations, I knew from the loud complaining there were a lot and that they came about the same rate as baggage check in's. So with 60 customers in line, the total work processing time was 60*6=360 this meant it would take 6 hours to service the entire line…HOWEVER for the half hour I was there the line stayed constant at about 60 people. So
    L=60
    W=6 minute service time
    A=LW
    A new customer entered the line almost every 10 minutes…surprise you guessed it they could never empty the queue and more people could potentially miss flights due to the line.

    In sum, limited resources = big queues!! Many airlines can learn from banks, I have never waited a half hour for a teller. Better to take just a carry on and forget the baggage fee. I apply these formulas to banking website applications so we are never like the airline I just used, but they work anywhere so have fun.

    Best Regards,

    Daniel Sidman

  • Financial Institutions (FIs) need to provide more value-added services, just as airlines do, and I think they are going in the right direction with prequalification. Prequalification is a way for FIs to allow consumers to choose from personalized credit products in real-time. In the privacy of their homes, consumers are presented with credit products they qualify for, the many features that come with each, and a quick online form to apply—similar to searching for flights online, comparing fares, choosing the seat you want, and booking and receiving your boarding pass online.