Six sigma can provide cost savings and increased customer satisfaction to a wide variety of financial institutions.
A new report from Celent, Six Sigma in Financial Services, analyzes six sigma and its application to financial institutions and finds that while the strict methodology can lead to impressive cost savings, much of the formal process is simply good management.
"Six sigma offers financial institutions the ability to save millions of dollars a year through quality improvements that enhance customer satisfaction," says Natalie Garner, a junior analyst at Celent and co-author of the report. "However, we believe these benefits are, for the most part, the result of good management practices."
Six sigma can be applied to a variety of processes at any financial institution. It helps to cut through bureaucracy and waste, and increases cooperation between different parts of the firm. However, we would discourage firms from implementing a program without examining first the efficacy of their existing quality programs. The strict methodology of six sigma requires a substantial commitment of resources to achieve its outsized gains and an uncommitted implementation can easily cost more than it saves. At the same time, we believe that many of the strong points of six sigma can be integrated into existing quality programs or through a less formalized program.
The report provides an overview of the six sigma methodology and an analysis of its applicability to particular areas of financial services. The report contains five case studies that provide details about different possible implementations of six sigma.
