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Lean Banking: Applying Lean Manufacturing Principles in Banking Environments

Financial Service providers have undergone through unexpected change over the past decade as they have redirected their attention from products to customers, developed new consumer friendly channels, and underwent numerous mergers. The outcome of these changes was the adoption of extremely complicated business models and systems that seem to impede cost reduction.

On the other side,the impressive achievements in manufacturing productivity and effectiveness have been the results of a long process of improvement through the application of scientific management methods collectively termed as “Lean Manufacturing” or “Toyota Production System”. Unfortunately, these achievements have yet to affect business practices in the service sector, but as western economies are becoming more service-oriented, in order to maintain and advance their competitiveness, they focus considerable attention on cost effectiveness, quality excellence, and responsiveness.

All these aspects are directly related to lean principles, which are beginning to attract considerable attention in this service sector. The goal of this research project is to investigate the applicability of Lean Manufacturing Principles in banking environments and to derive guidelines for the transformation of these principles in banks. Specifically, the research project will:

  • Systematically collect, classify and evaluate the related literature for lean manufacturing, banking services and the applicability of Lean in banking,
  • Apply experiments in simulation environment in order to quantify costs or benefits from the application of lean
    tools and methods in banking services,
  • Adjust the related principles, tools and methods of lean manufacturing in banking services,
  • Synthesize the above in order to derive new lean principles and tools suitable for the banking