Speeding Up Account Opening Using Lean Six Sigma

Anand Tamboli

Account opening is supposedly the most critical and important process in the financial services industry, as this transaction is the beginning of the customer-company relationship. Any good or bad experience during an account opening activity can leave a long-lasting impression on the prospective customer. For obvious reasons, financial services providers have to be particularly wary of disgruntled customers, who can cause more harm than good to the company’s reputation. Therefore, financial services providers must focus on the account opening process at all times.

Lean Six Sigma has proven to be an effective tool in streamlining and speeding up the account-opening process. This article describes one such case study with a particular financial services company.

Case Background

There are typically four stages in any account opening process: initial meeting with a prospective customer, application form filling, form processing and finally customer intimation. Each stage is as important as the other.

In the case of the company, its entire account-opening process was taking between seven days to 20 days to complete; the company found this unacceptable. A Lean Six Sigma team quickly started working on a process assessment exercise to understand the reasons behind the lengthy account-opening process and to subsequently come up with a solution to fix the problem.


Lean Six Sigma Steps

Define: The goal was clear: to reduce the account-opening turn-around-time (TAT) by 50 percent. While improving the quality of the process and its output was an important requirement, the most critical deliverable was to improve speed and flow of the process. To understand how this process actually worked in its current state, the team drafted high-level, detailed process maps at various stages of the account opening.

Measure: These process maps were evaluated on various parameters, such as turn-around-time for each part of the account-opening process, number of loops and decision making points, batch processing steps, etc. From these process maps, the team found many non-value-adding activities that were creating waste: transportation, waiting in queues, defective forms and rework. The top-most priority for the team was to either alleviate or eliminate all of these wastes.

Relying on data that was available from legacy systems and physical records, the team then formed a few hypotheses to test and verify the critical relationship between account-opening TAT and process parameters. Some of the hypotheses were that the preceding month’s number of defects were resulting in the successive month’s TAT to shoot up.

Analyze: Data obtained from various sources were linked together, forming a singular picture of account opening TAT for each case. From this analysis, the team discovered many trends in the overall process, which included some surprising month-end and week-on-week trends — such as average TAT increasing from week one until week three and then dropping in the last week. It was obvious that these trends were due to various incentive policies in existence at that time, hence the month-end pressures. This was one of the things to improve straight away.

Apart from this, transportation time was another critical item that ate almost 20 percent of TAT. Defect rates in application-form filling were the highest contributors to TAT by an additional 35 percent; these defects were causing forms to travel back and forth from the processing center to customers, which consumed valuable time. On top of this, the process was highly paper-based, with batch processing of files. Clearly in order to achieve better TAT, these were the three critical areas that needed to be improved.

Improve: The team came up with various practical solutions to address these vital X’s. For instance, imaging and workflow were introduced in the process to avoid any transportation and batching waste, thus ironing out a major portion of the process. Auto checks and validations were built-in for the data-entry at the form filling stage, reducing defects in this part of the process by almost half. Additionally, the team corrected a few operational definitions of some of the terms in the application form, which subsequently reduced defect levels by another 10 percent.


By reducing transportation and defect waste, the team succeeded in reducing account opening turn-around-time by 60 percent. The new process is now well within control since all of the improvements are wired using workflow solutions and policy changes, thereby making them sustainable. Thanks to the use of Lean Six Sigma to remove waste and increase process-velocity, customers now have their accounts opened and active in less than four days.