INDIAN INSTITUTE OF MANAGEMENT RAIPUR

PGP BATCH 2021-2023

TERM III_Operations Management II

Project Report
‘The antecedents of waiting time in the bank’

Submitted To

Prof. Praveen

Submitted By:

GROUP 08

Roll Number Name

21PGP224 Shiwangi Priya

21PGP225 Shraddha Kesarwani

21PGP245 Sumit Saha

21PGP249 Suyashi Bansal

21PGP265 Ayush Kumar

21FPM007 Sirsha Pattanayak

Table of Content

1. Abstract……………………………………………………..…………………………………….3
2. Introduction……………………………………………..……………………………………...3-4
3. History of Quality within Banks…………………………………………………………..…..4-5
4. Current issues in the Banking sector………………..………………………………………...5
5. Literature review………………………………..……………………………………………..6-7
6. Understanding the concepts of six sigma and DMAIC……………………………..……7-12
6.1. Define stage………………………………………………………………………………8-9
6.2. Measurement phase……………………………………………………………………9-10
6.3. Analysis phase…………………………………………………………………………10-11
6.4. Improvement stage………………………………………………………………………..11
6.5. Control phase……………………………………………………………………………...12
7. Research Design……………………………………………………..…………………….12-13
8. Data Analysis………………………………………………..……………………………...13-32
8.1. Table 1- Descriptive Statistics of the counter data………………………………...14-16
8.2. Table 2- Normality test of Counter and customer load………………………………..16
8.3. Table 3- Descriptive statistics of the number of people across banks…………..16-19
8.4. Table 4- Normality test of Bank and customer traffic……………………………..19-20
8.5. Table 5- Descriptive statistics of the time period and customer load……………20-22
8.6. Table 6- Normality test of period and customer load……………………………...22-23
8.7. Table 7- ANOVA test for the difference in variance for different time period…...23-24
8.8. Table 8- t-test for different pairs of timing…………………………………………..24-32
9. Complementing the Analysis with Consumer Perception……………………………...32-36
10. Discussion…………………...………………………………………………………………36-39
10.1. Managerial Implications…………………………………………………………………38
10.2. Limitation of the study……………………………………………….…………………..39
10.3. Scope for future research……………………………………………………………….39
11. Conclusion………………………………..…………………………………………………39-41
12. References………………………………………..………………………………………...42-43

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 1. Abstract

Management and service levels can be a measurement of a bank's competitiveness in the industry
of banking, one of its aims is to serve customers. The satisfaction of customers with the bank
used is an essential indicator of service levels and management. It emphasizes borderless
cooperation, the pursuit of excellence in quality and efficiency in management methods, and the
application of customer-centric management based on facts and data and facts, measures to
improve process management procedures, and emphasizing preventative controls. Based on
empirical analyses, we will design a six-sigma service process for a bank based on the reasons
banks affect customer satisfaction. Toward improving bank customer satisfaction, this section of
the report presents specific suggestions called "conclusions and discussion".

2. Introduction

A common indicator of high- and low-performing businesses is customer satisfaction and

loyalty. Based on a comparison of expectations and the product and service received, the
customer satisfaction rate measures how happy the customer is. When customers believe the
perceived quality is better than the cognitive quality, are satisfied with the customer service, or
are loyal to the company, and the perceived quality is better than the customer satisfaction or
loyalty, they will be dissatisfied. In the banking industry, customer satisfaction relies on core
dimensions and relationships. The level of service quality is influenced by various factors such
as expectations from services delivered, performance, desire, influence, and fairness. Somehow
banks' competitiveness relies on increasingly being determined by the level of their management
and service provided. This is based on how satisfied customers are with the banks.

The company's mission is to provide customer-oriented services. This is why people are
increasingly turning to banks to obtain banking services. Indian banks are notorious for poor
service, especially in terms of the long wait times for consumers, which is a result of a large
population. From queuing to handing the number to the counter, bank outlets' average waiting
times exceed 30 minutes, according to statistics. It is unreasonable to open a bank window. The
working day is closed about 60% of the time and is open about 50% of the time on non-working
days. There is a lack of efficiency in this work, which results in poor customer satisfaction.

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As we all know, the counter service is one of the important parts of the bank's day-to-day
activities, it is not its most important feature. It directly affects customer satisfaction and directly
relates to the quality of the bank's service. Through Six Sigma management in banking, this
method aims to enhance customer satisfaction and to wait times of customers.

Six Sigma management enhances profitability through better quality in operations. Using Six
Sigma, companies reduce costs and cycle times while increasing customer satisfaction and
reducing customer problems. Companies are adopting Six Sigma as a management strategy to
increase competitiveness and develop sustainably in a new economy. Few bank-related studies
have been conducted on customer satisfaction. Six Sigma is less common in research on
customer satisfaction. For bank retail customers, we developed the Six Sigma process and
applied the method to enrich customer satisfaction theory, resulting in an important contribution
to the theory

3. History of Quality within Banks

For several years, the bank's management has been devoted to quality. The concept of quality, or
TQl total quality, was discussed in a series of seminars attended by bank executives. It was
decided who would be in charge. Leaders at the time did not see it that way. They were taking
the first steps toward the six sigma certification philosophy. During such similar seminars, the
leadership discovered serious issues during the creative workshops. Practices that have a direct
impact on customer satisfaction customers, as well as the objectives that were to be met.
When the bank began implementing ISO 9001:2000 standards, it took the first big step toward
six sigma. The goal of this project's completion was not to receive certifications but to organise
and enhance processes. Later various manuals had procedures allowing the entire process to be
linked, regardless of where the bank's functional part is implemented.
In addition to recording processes and preparing documentation for the quality system, bank
associates received extensive training in a variety of quality methods and tools, including visual
process recording, the Pareto method, statistical process control, measuring customer
satisfaction, audit systems, and complaint management. They gained Green Belt knowledge
without even realising it by finishing this. In addition to recording processes and preparing
documentation for the quality system, bank associates received extensive training in a variety of

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quality methods and tools, including visual process recording, the Pareto method, statistical
process control, measuring customer satisfaction, audit systems, and complaint management.
They gained Green Belt knowledge without even realising it by finishing this.

4. Current Issues in the Banking Sector

Operational earnings in the banking industry fluctuate slightly, as do operating efficiency

percentages. This is owing to the fact that the operations are enormous.

Another challenge that the banking industry is dealing with is operational inefficiencies caused
by loans and non-performing assets (NPAs). Loans are one of a bank's primary products and a
significant source of revenue, thus they must be processed with great efficiency and productivity,
which has been a challenge in recent years. Non-Performing Loans, or NPLs, are loans that are
in peril because the borrower is not paying interest or repaying the principal. In most cases, NPL
is a result of faults in the 'Credit Evaluation Process.'.It is a method of determining a borrower's
ability and willingness to meet his or her financial obligations. The computations are usually
done with a variety of financial tools. Every bank has its appraisal method that complies with
federal regulations.

The credit score of an individual or an organization determines whether or not a loan is

approved. One of the approaches used by banks to analyze the creditworthiness of potential
borrowers is the Five C's of Credit. To calculate the probability of default, the technique takes
into account five borrower characteristics as well as loan terms.

The five C's of credit are character, capacity, capital, collateral, and terms. Depending on the
type of loan, the loan process comprises several stages. The mortgage loan process includes
procedures such as pre-approval, house hunting, mortgage application, loan processing,
underwriting, and closing. If there is a weakness or error in the evaluation process, it will be
labeled as NPL. The bank's performance declines as the number of nonperforming loans grow.

As a result of the weaknesses, banks' efficiency suffers.

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 5. Literature Review

In the hypercompetitive era of business, a vital element that is a key to sustainability for the
industry is customer satisfaction. It has been argued that profitability to a great extent depends on
the customer's attitude towards the organization Prabhakaran and Satya (2003); Heskett et al.
(1997), Tariq and Moussaoui (2009), Han et al. (2008), and Ehigie (2006). Several works of
literature also suggest that the cost for acquiring a new customer is six-fold in comparison to
providing service to an existing customer Ndubisi (2005), Gee et al. (2008) and Pfeifer (2005).

The antecedent to customer satisfaction is the waiting time and they share an inverse relationship
according to Cameron et al. (2003); Bae and Kim, (2014). Previous research has also established
that there are costs and wastes associated with longer waiting time Cameron et al. (2003). In
response to the intensifying competition in the banking sector in India, there is a vivid need to
eliminate any operational ineffectiveness according to De Mast, (2006). The innovation in
technology and service quality there is a need to continue improving the ongoing process that has
been stated in the work of Idris & Zairi, (2006; Powell, 1995; Sureshchandar, Rajendran, &
Anantharman, (2002), Allen & Davenport, (2009); Antony, (2004) Altria & Smith, (2009).
Studies have been focusing on assessing the relationship between customer waiting time and
customer satisfaction, the relationship between customer waiting time and customer loyalty, and
factors impacting the quality of service in the banking sector Holbrook et al (2016); Nathalie and
Demoulin (2013). Studies suggest that six sigma as a tool is being used across various business
processes and industries to improve the processes and in turn increase customer satisfaction.

Although the importance of a six sigma process in the financial institution has been recognized
in the literature presented by George, (2003); Snee & Hoerl, (2003); Su, Chiang, & Chang,
(2006) not much has been done in the context of the Indian banking system. The literature
present majorly talks about the impact of waiting time on customer satisfaction and customer
loyalty. The other dimension that is being talked about is how waiting time leads to service
failure and the third dominant area is how to reduce the waiting time in banks. There has been
very little published work on what are the factors that lead to waiting time in the very first place.
This paper aims at understanding what are the possible reasons that give rise to the waiting time
and what are the processes that need to be brought under consideration for improvement. This

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paper also tries to understand whether the acceptance of digital banking is in response to a
reduced waiting time. With these objectives we present the following hypothesis to be tested in
the study going further:

H1 - The period of handling has a significant impact on the traffic intensity in the bank

H2 - The type of operations performed has a significant impact on the traffic intensity in the
bank

H3 - The ownership of the bank has a significant impact on the traffic intensity in the bank

H4 - The waiting time across banks for the same operation show a significant difference

6. Understanding the concepts of Six Sigma and DMAIC

Six sigma as given by Bumjaid et.al (2019) is the process of collecting, analyzing, and
controlling the variations in the process and thus improving quality.

According to Ikumapayi et. al (2019), six sigma is a process that maximizes profit for a firm by
conforming to the satisfaction of the customers.

According to Niñerola et.al (2019), Six Sigma is a “ highly disciplined, organized, systematic,
proactive, powerful and multifaceted problem-solving or continuous and/or breakthrough
business/ process improvement strategy that seeks to find and eliminate the sources of error or
the causes of customer-defined mistakes or defects, drive out wastes in business processes, and
reduce variation, thereby improving the efficiency and effectiveness of organisational operations,
and strives to reach a level of 3.4 DPMO using extremely rigorous data gathering and statistical
analysis, thereby meeting or even exceeding customers’ needs and expectations with a focus on
financially measurable bottom-line results.”

The dominant strategy used by Six Sigma is DMAIC which defines, measures, analyzes,
implements and controls a process and aims at improving the existing processes for superior
financial returns for the firm.

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The DMAIC process is explained in detail below for getting a better understanding of what goes
on in each phase.

6.1. Define Stage

The major goal of the defining stage is to figure out how the financial service works and what the
consumer wants. Based on the bank's business operations, we devised a project plan: goal
formulation, scope definition, labor division, and team member communication are all covered.

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Simultaneously, key metrics that customers ’ perceptions are based on the characteristics of
customers' desires.

Fig: SIPOC diagram.

The primary goal of the phase is determining how banks expect to increase customer satisfaction.
The project's purpose is to increase customer satisfaction by reducing a variety of impediments to
process efficiency. Based on the findings of the empirical study, the following questions should
be obvious at this stage: What customers need? What do you think the most critical
characteristics of quality are? What is the impact when a project is flawed?

6.2. Measurement Phase

This phase, which is based on the SIPOC graphic, goes over the complete procedure in greater
detail. Develop data gathering and sample collection techniques, and evaluate process
capabilities by identifying key quality aspects that influence or have a significant impact on the
process performance. The following actions must be accomplished in line with the customer's
needs after the project's conditions have been clarified:

● Choose your assessment metrics: The critical quality factors and essential quality factors
for the project are derived from the customer's critical quality factors and the project's
essential quality factors, i.e., the customer's specific needs for services and goods are
transformed into the standards that the bank process must meet.

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 ● Design a data collecting plan after identifying the measurement items: Evaluate a current
procedure to determine its capacity or degree of implementation, as well as a collecting
data strategy based on the measurement item selected. The information that has been
gathered during the measurement phase provided the foundation for the analysis phase.
● Check the accuracy of the measurement system: The data collecting approach does not
allow for quick implementation of data collection procedures. Measurement data acts as
an important input for the analysis stage, it's critical to double-check that the
measurement equipment is operational before beginning the measurement. If the data is
of low quality, it will have a detrimental influence on all preceding activities.

6.3. Analysis Phase

The major goal of this particular phase is to understand the key impacting elements and conduct
data analysis. User satisfaction assessments and field studies were used to collect raw data,
which was then analyzed to establish and confirm the causal link.

As seen in the diagram below, the analysis phase is indeed a continuous cycle of the root cause:

● Analyze the information or the procedure: Its goal is analysing the data gathered during
the measurement phase to come up with key ideas for how to solve the problem's source.
● Make assumptions or hypotheses about the cause of the occurrence: Such that, all
conceivable ideas that may lead to the problem are raised as much as possible based on
the analysis results, and a model for the problem's origin is constructed.
● Analyze the data and the process: This phase of the project is comparable to the previous,
however, it is not a straight copy.
● Revise the hypothesis or model: Following the additional data and process analysis, the
goal here is to reduce or eliminate a large number of reasons in brainstorming to a more
manageable quantity.

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6.4. Improvement Stage

Based on facts and data, improvement ideas are made, and improvement plans are established. A
partial test run might be performed to assess the improvement. To show the improved technique,
an enhanced strategy table might be employed. The steps in the improvement phase are as
follows:

● Look for methods to improve customer happiness: Similar to the analytical phase,
brainstorming may aid the group in obtaining more perspectives on how to approach the
topic at this stage.
● Determine the answer and plan a strategy for putting it into action: During this stage, all
of the ideas and proposals generated during the brainstorming sessions are discussed and
classified, with the ones most likely to result in a solution being picked and organized on
their own.
● The solution's implementation: If it is not implemented, the best solution is a sheet of
paper. As a result, the team's next objective is to overcome the obstacles and work toward
continual progress.

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6.5. Control Phase

Establish job performance assessment criteria and increase incentive measures to include
improvement phase metrics into daily management and supervise banking business processes in
a lean and traditional manner.

Specifically, the project team's activity in the control phase includes:

● Validate that conditions have improved and analyze the outcomes to the improvement
goals.
● Create a fast response structure to respond swiftly to changes in vital data by adapting
strategy, commodities, and services.

Create a culture of Six Sigma management, as well as an organization that will support Six
Sigma management in the future.

7. Research Design

Literature suggests that there is an intense level of competition and the market shows the
characteristics of being monopolistic Dutta (2013) and Li et al. (2019). With respect to the Indian
Context policy aimed at increasing liberalization and privatization has resulted in increased
competition among banks across the different ownership groups- Government-owned, Foreign-
owned, and Private-owned. A key element that would give an edge over the competitors is how
satisfied the customers are and whether the satisfied customers can be loyal ones. It is to be noted
that delay, queues, and waiting time have been proved to be a determinant to customer
satisfaction Bielen (2007), Lovelock and Gummesson (2004). This can lead to anger and
frustration at the place of service delivery Krentler (1988); Kumar et al. (1997); Houston et al.
(1998); Ho and Zheng (2004); McDonnell (2007). The study is aimed at analyzing whether the
queue and waiting time is specific to the type of ownership of the bank, the operations being
performed, or the timing preferred by the customers. The study was divided into four phases-
Phase 1 was conducted to understand whether the nature of operations, ownership of banks, and
the time for serving as factors in the traffic. In the second phase of the study three banks were
taken as a sample and the process of NEFT and RTGS was observed where waiting time in the
system was observed for four weeks. The method used here was a cross-sectional observation
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method, the data was collected at one point in time. The sampling method used a random
sampling method and a purposive sampling method. The choice of banks ensured that both
Government-owned and privately-owned banks were included. The footfall of the customers in
five different periods for four different counters was observed across six banks. The counters are
coded as Counter 1, Counter 2, Counter 3, and Counter 4. The different counters represented the
different operations that are commonly performed in the bank. The time period considered for
observation are- 9:30-10:30, 10:30-11:30, 11:30-12:30, 12:30-1:30 and 2:30-3:30. The time slots
are selected in such a manner that the observations are taken when the bank is in full functional
mode and hence the lunch hour of 1:30-2:30 has not been considered and the period post 3:30
pm has not been considered because post that the operations on the system are forwarded to the
preceding working day. The banks were coded as Bank 1, Bank 2, Bank 3, Bank 4, Bank 5, and
Bank 6. The data in the observation method was generated using a watch and was recorded by
the researcher.

In the third phase, three banks are considered from our sample of six banks based on the highest
customer load. The entire process of NEFT and RTGS was observed and the waiting time was
captured. The banks are coded as A, B, and C. Bank 1 is represented as A1, A2, A3. Bank 2 is
represented as B1, B2, B3. Bank 3 is represented as C1, C2, C3. Here, A1, B1, C1 is the
representation of the time taken after the arrival of the customer and his NEFT or RTGS form
being taken by the counter in bank 1, bank 2, and bank 3. A2, B2, C2 are the representation of
the time taken from collecting the form and processing the request by the personnel. A3, B3, C3
represent the total time spent by the customer in the system. In the final phase, an attempt was
made to understand the perception of the customers about the waiting time of their banks. It also
aimed at identifying the attitude of the customers towards the digital initiatives that are taken up
to reduce the number of visits to the bank and the waiting time in the system.

8. Data Analysis

To understand the characteristics and the distribution of the data that had been recorded a
descriptive statistic was run on SPSS. A normality check using Kolmogorov-Smirnov test was
performed.

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8.1. Table 1- Descriptive Statistics of the counter data

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Table 2- Normality test of Counter and customer load

From the above table it can be clearly concluded that the number of people in counter 1, 2, 3,4
are not normally distributed hence the null hypothesis is rejected at a 0.05 level of significance.

8.3. Table 3- Descriptive statistics of the number of people across banks

From the above table it is evident that the highest number of people are present in bank 1
according to the observed data, indicating more customer traffic. Bank 2 is showing highly
positive skewed results indicating that most of the data points lie to the left of the mean, here the
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number of people present in a particular period are mostly lesser than the mean value of 5. Bank
3 and Bank 6 are shown to have moderately skewed data. In case of Bank 1, Bank 4 and Bank 5
indicate that the values are closer to the means and the distribution has a lighter tail, whereas in
case of Bank 2 there is a profusion of outliers, indicating that there might be presence of peak
hours which has high traffic load.

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To further validate the descriptives, a non-parametric test was run.

8.4. Table 4- Normality test of Bank and customer traffic

The preceding table would be highlighting the descriptives about the time period and the traffic
intensity.

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8.5. Table 5- Descriptive statistics of the time period and customer load

From the above table it can be analysed that the busiest time is 10:30-11:30. And the time
between 12:30-1:30 has a high degree of positive skewness suggesting that most of the data
points lie below the mean, and presence of outliers is also detected during the particular range.

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8.6. Table 6- Normality test of period and customer load

After understanding the distribution and the characteristics of the data the study proceeds to test
the hypothesis presented:

H1: The period of handling has a significant impact on the traffic intensity in the bank

This hypothesis is aimed at analysing whether the period would significantly impact the
customer traffic and in turn the waiting time of the customers. As already analysed from the
descriptive statistics that there is a certain period that is preferred more by the customers for bank
visits, and with the data collected it can be convinced that the most preferred time for visit seems
to be 10:30-11:30. To validate an ANOVA has been performed on the data set with the H0 being

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µ1=µ2= µ3=µ4= µ5, implying that the means would be equal for all the period samples
observed.

8.7. Table 7- ANOVA test for the difference in variance for different time period

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8.8. Table 8- t-test for different pairs of timing

From the above analysis, the H0 µ1=µ2= µ3=µ4= µ5 is rejected at a 0.05 level of
significance in favour of H1- The period of handling has a significant
impact on the traffic intensity in the bank or other terms H1
µ1≠µ2≠µ3≠µ4≠µ5 implying that the period of operations has an
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impact on the customer load and in turn the waiting time of the
customer. The test of equal variance has hence been rejected at a 5%
level of significance because 4.90 (F value)> 2.45 (F critical value). A
paired t-test is further performed to gain an in-depth comparison of
each period pair. The basic underlying assumptions of using the t-
test have been checked- the data is approximately normally
distributed, the data is independent and since the test of equal
variance is rejected the t-test of unequal variance has been applied
and each pair is for the same subject (Pandis, 2015). The t-test
suggests that the mean between the period 12:30-1:30 to 2:30-3:30,
10:30-11:30 to 12:30-1:30, and 9:30-10:30 to 10:30-11:30 are equal
hence accepting the null hypothesis for these pairs and rejecting the
null hypothesis in favour of the alternate hypothesis for the other
pairs that have been shown. The ANOVA and t-test results show that
the difference persists in terms of the period of operations and the
customer load.

H2: The type of operations performed has a significant impact on the traffic intensity in the
bank

The sample is collected for four different processes in the banks which are deposit and
withdrawal, NEFT and RTGS, Account opening, closing, transfer, and other information, KYC.
The assumption being tested here is that the nature of operations being performed across the
counter demands different times of completion. To validate an ANOVA has been performed on
the data set with the H0 being µ1=µ2= µ3=µ4, implying that the means would be equal for all the
different processes.

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Fig- ANOVA table for different counter operations

From the above table, the Hypothesis is rejected since 3.58 (F value)> 2.68 (F critical value) and
a 5% level of significance implying that there exists a significant difference between the nature
of operations being performed.

A paired t-test is further performed to analyse the pairwise differences, the underlying
assumption of performing a t-test has been validated.

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From the table Counter, 3 seems to have an insignificant difference with all the other processes.
A significant difference can be seen across the remaining pairs, suggesting that the nature of
operation and process has an impact on the number of customers present and in turn the waiting
time and satisfaction.

H3: The ownership of the bank has a significant impact on the traffic intensity in the bank

The sample of the banks that were chosen comprised government and private banks. The
hypothesis aims at understanding whether the ownership of the bank has an impact on the
customer load of the bank. To validate an ANOVA has been performed on the data set with the
H0 being µ1=µ2= µ3=µ4= µ5= µ6, implying that the means would be equal for all the different
banks that were considered as samples.

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Fig- ANOVA output for different bank samples

From the tables above, the null hypothesis is rejected as 2.41( F value)> 1.71 (F critical value) at
a 5% level of significance. This implies that the nature of ownership has an impact on the
customer load, waiting time, and hence satisfaction. The test of equal variance has been rejected.

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A paired t-test was performed to compare the means across the pairs of the banks, the underlying
assumptions for t-test has been validated earlier.

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According to the table there is no significant difference in mean for Bank 1 and Bank 2. All the
other pairs show a significant difference in meaning implying that the ownership of the bank has
a role to play in the customer load and in turn the waiting time.

To check the hypothesis four understanding the descriptive statistics of the collected data point is
a prerequisite.

H4: The waiting time across banks for the same operation show a significant difference

To check hypothesis 4 we run an ANOVA test and analyse if there is a significant difference in
waiting time across the different banks.

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Fig- ANOVA for checking if the NEFT process has different waiting times across banks

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From the above table the hypothesis that the waiting time is equal across the three banks is
rejected, as 28.02 (F value) > 1.99 (F critical value) at 5% level of significance. Inference drawn
from the result is that the different banks have a significant difference in the waiting time of the
customers for the same process.

9. Complimenting the Analysis with the Consumer Perception

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 Hypothesis Accept/Reject

H1 - The period of handling has a significant

impact on the traffic intensity in the bank Accepted

H2 - The type of operations performed has a

significant impact on the traffic intensity in the Accepted
bank

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 H3 - The ownership of the bank has a significant
impact on the traffic intensity in the bank Accepted

H4 - The waiting time across banks for the same

operation show a significant difference Accepted

10. Discussion

From the above analysis it can be understood that the three factors that were taken into
consideration were the nature of the operations, the timings of serving the customers and the
nature of ownership of the bank have significant effect on the customer waiting time. People
generally have a preconceived notion or preference about the visit timing to the bank and it
generally is in the range from 10am -12 pm, since this is the most common time range for any
official work. This consistency across organisations in the choice of the official time for work
has impacted the customer preference and thus peak in demand generally is the result.

The consideration of the nature of the process also showed significant impact on the customer
waiting time.The waste identified in this case is waiting time because of queues being formed.
The NEFT and RTGS counter is the most time taking process with the maximum number of
visits in the bank. The classification of criticality of the process can be very well seen in this case
where activities like passbook printing and passbook updation could accept a degree of error but
under no circumstances a customer can accept an error in the NEFT procedure. The process of
NEFT and RTGS because of the higher risk and 0% probability of defect is naturally more time
consuming and thus waste in the form of overprocessing and waiting can be identified in this
step.

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The third factor in the study was the nature of ownership of the bank. The results suggest that
there is a significant difference in the waiting time in comparison to the Government-owned and
privately owned banks. The possible reason for this can be the nature of training and the working
culture of the banks can be different thus exhibiting difference in results. The waste identified
here is non-utilized talent.

The fourth hypothesis revealed that for the same process of NEFT and RTGS banks have
different waiting times. One probable reason for this can be the difference in training and
development of the employees by the banks. The maximum waiting time is observed to be in the
bank that was government-owned. One reason that was observed in the banks during the data
collection was that in the government-owned bank there was a lot of waste created in the process
of non-value added motion. The customer after the processing of NEFT had to go to another
counter to get the processing approved and collect the receipt. This particular counter was used
for serving miscellaneous queries and information. As a result of this the waiting time for the
customer from entering the bank to leaving the bank after completion of the activity was more.
On the other hand, in the case of the privately-owned bank it was observed that the entire
operation of NEFT was done in one counter itself and the customer was not required to visit
another counter to get the receipt. Another important observation was with regards to the layout
and the system of the bank. In the case of the government owned bank the counters were placed
far from one another and there was one system which was dedicated for processing NEFT and
approving it. The customer had to queue up in one counter so that the information was fed into
the system and then move to the other counter to get it approved and collect the receipt. However
in the private-owned banks the counters were placed close to each other and the communication
channel was faster for approving the NEFT transaction, the layout was such that employees
could pass the information from their respective counters and there was no need for the customer
to keep queuing up in different counters.

10.1. Managerial Implications

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The study has highlighted the sources of waiting time in the banks. It can also be seen that
activities can be classified as critical and not-so-critical in terms of the risk associated and the
acceptable percentage of defects. Using the results from the study the following
recommendations are proposed:

● The layout also has an important role to play. Placing the counter in a position that does
not require the customers to walk long distances is a good practice. Placing the NEFT
approval counter beside the counter that feeds the NEFT details would save considerable
time wasted in unwanted motion
● Since the timings also contribute to waiting time, a general pattern seen is that the banks
generally have a high traffic intensity during 10-11:30 which is considered as the peak
hours. So banks can use strategies to shift the demand to time slots post 11:30.
● Financial institutions should promote the use of electronic payments to relieve business
hall window congestion.
● From the analysis, it is recommended that the office staff should be trained to work in a
manner that would reduce the waiting time, for example, the proficiency with using the
systems. Increasing the typing speed for instance can decrease the waiting time of the
customers.
● Identify the processes that are critical and dedicate resources to those activities, in our
case NEFT was the most critical factor where traffic was higher so allocating two
counters for approval would reduce the waiting time.
● The banks should design customer feedback so that they can accurately understand the
pain points of the customer and plan improvement in the process. Although provisions for
customer grievances are in place they are not acted upon
● The survey has revealed the inclination of the customers to use digital banking and UPI
to avoid waiting time, the bank employees should encourage the customers to use digital
banking for issues that are not too critical so that the number of visits to the bank can be
reduced and the traffic congestion can be handled efficiently.

10.2. Limitation of the study

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The study was confined to a limited geographical location and there are possibilities that error
pertaining to the cultural effect was not accounted for. There might be chances that a particular
region or area has a specific style of working. Samples with a more diverse geographic selection
would have added to the reliability of the study. For analyzing the waiting time only a few
factors were considered. We recommend testing the relationship between service failure and
waiting time. Further, the behavioral dimensions can be taken into account when testing the
waiting time and satisfaction. The study has aimed to understand the attitude of the customers
towards the digital banking system; however, a Technology Acceptance Model (TAM) would be
an appropriate tool to give conclusive results.

10.3. Scope for future research

The study was aimed at understanding whether there is a significant difference in the waiting
time based on the three factors of the timing of the operation, nature of ownership, and nature of
operations performed in each counter. Further analysis can be done exploring the factors that are
responsible for these differences. A model using factor analysis can help explain in greater depth
the reasons for the difference. Further, a cross-case and within-case analysis between the private
and government banks would highlight the similarity and differences in greater detail. A
comparison of the performance metrics of the banks using six sigma and banks not using six
sigma would further magnify the advantages of using Six Sigma in financial institutions. A
longitudinal study of the performance metrics of before and after using six sigma to a specific
process in a bank can further strengthen the need for Six sigma in the banking industry in India.

11. Conclusion

Six Sigma has acted as a cutting-edge strategy in the field of management and implemented
throughout the world. Six Sigma: a management model always strives to improve continuously,
to pursue perfection, breakthrough, and create a culture for quality management centered around
customer satisfaction, defect reduction, process efficiency, improved customer satisfaction &
helps the management to achieve higher customer satisfaction & requirements. The following
aspects should be carefully looked upon to understand the process:

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● A culture of quantitative analysis needs to be set up and then firmly adhere to it: Six
Sigma highlights the data and mathematical analysis and strictly splits the duties of
management following statistical evaluation of the data set. To implement Six Sigma
successfully, Quantitative tools and data are used to test the hypothesis to analyze the
root cause of the traffic & waiting time at banks and for understanding the current state of
affairs of the six banks. A thorough measurement system and strong data support are
necessary for Six Sigma to be successfully implemented.
● Creating an efficient infrastructure backed by Six Sigma and then establishing an
incentive framework. Lean Six sigma served as an effective framework in the whole
project for decreasing the waiting time and increasing customer satisfaction. Six Sigma
creates an organizational structure which clearly states the roles and responsibilities of
the commercial banks and from our project, we recommend having a group of well-
qualified staff to grasp the business processes, for vanishing the ways by which
customers get defects and then dissatisfaction, via prioritizing the action taken and
finding solutions. We also recommend having a proper feedback process to understand
the pinpoints of the customers accurately.
● The DMAIC process has critical links where Six Sigma serves as a system for process
improvement. Activities and operations follow the DMAIC process. The definition phase
is the first step. In this phase, we identified how financial institutions work and what
customers want from them, and accordingly, we set our goal for the project.
Measurement is the second phase. Here, data acts as a bridge between the current state of
affairs and customer needs, hence employees should be trained in stats and probability
theory to reduce the waiting time of the customers via speedy processes. Phase three
involves analysis. It identifies the potential variables influencing the outcome as well as
analyzes the factors contributing to the difference between the status quo and demand
using many statistical tools. In this phase, we ran a hypothesis test by taking a sample of
six banks. The framing improvement plan is the fourth stage. The statistical tools can be
used in this phase by properly analyzing the system and estimating the probable gap
between the established goals and outcomes. For determining the improvements to be
made, we devised certain strategies. The fifth phase is the control phase. In this phase

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 various system-related processes are monitored and regularly improved and optimized.
The center of attention lies in service process effectiveness.
● Under six-sigma, DMAIC acts as a cyclical process where problems are being identified,
then these are solved, and further new problems are being discovered. The methodology
of continuous improvement seeks to improve every single process. Six Sigma should not
be seen as a single-blew quality movement, continuous improvement concepts must be
established, and ultimately a corporate culture must be formed.

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https://doi.org/10.1108/bpmj-03-2014-0019

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