Quality Management in Private Banking Sector

GROUP 9

Suyash Jain C016Apoorva Jajoo C017Shreya Khare C018Akshay Khatri C019Tejasv Kumar C020Aakarsha Lamba C021

IntroductionTotal - made up of the wholeQuality - degree of excellence a product or service providesManagement - act, art or manner of planning, controlling, directing,….

Therefore, TQM is the art of managing the whole to achieve excellence.

Service quality is defined as the degree of discrepancy between customers’ normative expectations for service and their perceptions of service performance

• Global world suffered from financial depression in recent years, it is essential for banks to establish a sturdy and solid loyal customer base to weather tougher economies and more intense competition.

• Indian banking sector continuously expanding still it has faces tough competition between public sector and private sector banks

• The public sector banks dominate the banking industry in terms of size of assets .

• The government has now recognized the need to make banking industry more competitive and made various policies to support them.

• Banks have expanded their operations and more foreign sector banks have entered the Indian banking industry

Dimesions of Service Quality

RESPONSIVENES

RELIABILITY

ASSURANCEEMPATHY

TANGIBILITY

Service Quality

Determinants

Ease of Access Tangibles

Security Credibility

Communication

Courtesy Understanding

Competence Reliability

Responsiveness

Kano Model

Time

Kano Model

• Availability of multifunction kiosks.

• Ease of Access• Reliability• Banks should remain open

on Sunday • Expert service available for

import/export business • Supportive behavior of

member of staff

• Space available for sitting/writing /waiting

• Reliability• Courtesy• Locker service rendered

by branch • Availability of ATM

facilities • Short Duration of time in

payment of cash /DD/FD • Issue of cheque book in

current a/c

• Layout & signboards• Sanctioning of loans• Responsiveness• Nominal Interest Rates • Security • Locker Facility

Case Study

History• First to receive an 'in principle' approval from the Reserve

Bank of India (RBI) to set up a bank in the private sector

• HDFC was incorporated in 1977 with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs

• VISION STATEMENT-To build a world class Indian bank.

• MISSION STATEMENT:

Use enabling technologies to provide value added products and services to customers at value for money price.

• It has also received a CII-EXIM Bank Commendation Cert. for commitment to TQM- 2000.

• Various researches conducted for quality enhancement.

Quality Policy• SECURITY: The bank provides long term financial security

to their policy. The bank does this by offering life insurance and pension products.

• TRUST: The bank appreciates the trust placed by their policy holders in the bank. Hence, it will aim to manage their investments very carefully and live up to this trust.

• INNOVATION: Recognizing the different needs of our customers, the bank offers a range of innovative products to meet these needs.

• INTEGRITY • CUSTOMER CENTRIC • PEOPLE CARE “ONE FOR ALL AND ALL FOR ONE” • TEAM WORK • JOY AND SIMPLICITY

Quality objectiveDecrease number of customer complaints

Improve customer service scores in every branch time to time

Reduce customer wait time in line and ensuring adequate staffing during peak periods.

Reduce data-entry time per customer by consolidating multiple databases into one data management system by the end of this year.

Increasing the security in internet banking portals.

Reducing the transaction failure rate for online payments.

Improving the instant fund transfer app Chillr-HDFC Bank

Quality process

TQM implementationReducing the processing times of key products and services

Promptness in responding to customer inquiries

Accuracy and timeliness of statements of accounts and records

Customer Service Quality

Banking Service Product Quality

E-banking Improvement

Increasing Customer Satisfaction & Security

Quality Tools

They are called basic because they are suitable for people with little formal training in statistics and because they can be used to solve the vast

majority of quality-related issues.

Cause-and-Effect Diagram

Account Opening Delays

Environment People Process

Measurements Machine

No back-up support system

Management issues

Absenteeism

No training program

Workload

Material

Maintenance issues

Network issues

Low employee engagement

Rules and Regulations

Infrastructure

Law and Order

Location

No proper tracking system

No proper return mail monitoring

Service Desk

Less printers

Outdated systems

No token System

Unavailability of stationary

Improper sealing of envelopes

Low quality paper

Delay caused in Opening a new account

Scatter Diagram

5 10 15 20 25 30 350

2

4

6

8

10

12

Service Time (in minutes)

Customer Feedback

(scale from 1- 10)

Independent Variable : Service TimeDependent Variable : Customer Feedback

PARETO CHARTS

General behavior of member of staff

Performance of internet banking &mobile banking

Availability of staff member for en-quiry & listening

of problem

Time taken in proceed of outsta-

tion cheques

Duration of time in payment of

cash /DD/FD

Time taken in sanctioning of

loan

0

2

4

6

8

10

12

14

16

18

20

0%

20%

40%

60%

80%

100%

120%

39%

63%

76%

87%96%

100%

FMEA for HDFC Bank

Failure Mode Effect Analysis

Why companies go for FMEA??• Get it right the first time• Identifies any inadequacies in

the development of the product

• Tests and trials may be limited to a few products

• Continuous improvement• Preventive approach

Process Step

potential failure mode

potential failure effect

Severity

Potential causes

likeliness of failure

current process control

detectability of failure

RPNaction

recommended

Resposibility action taken new severity

new likelines

s of failure

new detectabi

litynew RPN

Withdrawal of cash

Cash not disbursed

dissatisfied

customer 7

Machine out of cash 7

internal alert of low

cash in machine 4 196

improve monitoring of cash threshold

levels across

machines manager

minimum cash

threshold limit of

heavily used machine is

increased to prevent out-

of -cash situation 7 4 3 84

Account debited but cash

not disbursed

very dissatisfie

d customer 8

transaction failure

or network/s

erver issue 3

load balancer

installed to distribute workload 4 96

enhance transactio

n processing

system manager

proper verification

of the trnsaction 8 3 2 48

extra cash disbursed

bank loses

money 8

bills stuck to each other 2

verification while

loading cash in

machine 3 48

change the quality

of paper manager

verification while loading

cash in machine 8 2 2 32

QUALITY FUNCTION DEPLOYMENT

CONCLUSION AND

RECOMMENDATIONS

RECOMMENDATIONS

• Provide the bank employees first-hand best corporate practices

• Expose the bank employees to the environment in which the bank customers use the bank's services

• Constantly retrain the bank staff in the theory and practice of TQM

• Showcase the customer quality• Establish a continuous improvement culture

in the Bank Initiate vigorously continuous process improvement in the Bank. The process improvement can be brought about by;

• Breakthrough thinking; • Process stabilization; and• Incremental Imrovement

Conclusion• A link between service quality and

satisfaction level can be established, i.e. customers’ satisfaction is influenced by the level of total service quality.

• However, it was also found that certain service quality dimensions fell short of customer’s expectation as their perceived service quality was less than their expectations.

• There is a close relationship between the employee perceived quality in banks and the actual service quality perceived by bank clients.

• Customers are important aspect of bank and loyal consumers can add value to profitability of banks.

• TQM can improve performance of a

bank by lowering costs, increasing revenues, delighting customers, and empowering employees.

Thanks!Any questions?