PROCESSES AND QUALITY IN
FINANCIAL SERVICES
Ing. Kateřina Matušínská, Ph.D.
MARKETING OF FINANCIAL SERVICES/PEMNAMAF
OUTLINE OF THE LECTURE
1. Processes in FS
2. Quality in FS
PROCESSES AND QUALITY IN FINANCIAL SERVICES
1. PROCESSES IN FINANCIAL SERVICES
• Processes are a sequence or a sequence of activities, logically
arranged and their output is a benefit for the customer.
• Processes are a set of procedures and activities the employees are
identified with and they respect and observe them all the time.
• The process can be characterized by the following features:
• a clear objective must be the benefit for the customer,
• logical classification and arrangement to process only those activities
that are necessary to achieve the desired output - the process must
be economical,
• all activities must be eligible and stabilized - the process must be of
high quality, complied with deadlines and reproducibly reliable.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
PROCESSES IN FINANCIAL SERVICES
• Wrong processes are when:
• You do the same thing differently each time.
• Competition can do it faster and cheaper.
• You do not use modern technology to save time and
money.
• You do not have clear metrics for quality and
efficiency control.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
PROCESSES ACCORDING TO DIVERSITY AND
COMPLEXITY
1. Mass services - low interaction, high standardization and
automation.
2. Custom services - middle interaction rate, high adaptation,
they can be unrepeatable.
3. Professional services - a high level of interaction, the high
qualifications of the service provider.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
CLIENT INVOLVEMENT IN THE PROCESS
• Self-service zone
• ATMs
• Electronic banking
• Other forms of remote banking, …
• Seller comes to customer
• Traditional and non-traditional forms of branches
PROCESSES AND QUALITY IN FINANCIAL SERVICES
CONSUMER DEMAND MANAGEMENT
• Irrational demand
• Declining demand
• Latent demand
• Excessive demand
• Negative demand
• Irregular demand
• Full demand
• No demand
PROCESSES AND QUALITY IN FINANCIAL SERVICES
PROCESSES IN FINANCIAL SERVICES
• Demand management  influencing the demand with
marketing tools.
• Capacity management  flexible use of facilities and staff,
the change in organization of demand, ...
PROCESSES AND QUALITY IN FINANCIAL SERVICES
BUSINESS PROCESS REENGINEERING
• Business process re-engineering is a business
management strategy, originally pioneered in the early 1990s,
focusing on the analysis and design of workflows and
business processes within an organization. BPR aimed to
help organizations fundamentally rethink how they do their
work in order to dramatically improve customer service, cut
operational costs, and become world-class competitors.
• Business Process Reengineering is also known as business
process redesign, business transformation, or business
process change management.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
2. QUALITY OF FINANCIAL SERVICES
• Quality of service is a tool to maximize revenues through
increasing in clients satisfaction.
• Quality is capability for use. (Juran)
• Quality is compliance with the requirements. (Crosby)
• Quality is what is considered by a customer. (Feigenbaum)
• The resulting quality = quality of financial services + quality
of processes + quality of financial Institution.
CUSTOMER!!!
PROCESSES AND QUALITY IN FINANCIAL SERVICES
QUALITY OF FINANCIAL SERVICES
• Support personnel may measure quality in the degree that a
product is reliable, maintainable, or sustainable.
• A quality item (an item that has quality) has the ability to
perform satisfactorily in service and is suitable for its
intended purpose.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
QUALITY OF FINANCIAL SERVICES
• QUALITY FINANCIAL SERVICE produces more loyal
customers and they will buy again next time. It means the
increase in sales volume and profitability of financial
institutions.
• POOR FINANCIAL SERVICE can mean the loss of customers,
which is expensive not only because of the cost of
compensation, but also because of their negative opinion.
• MOTIVATION OF THE STAFF is increased when the service is
good. Then it brings increased productivity and contributes to
greater customer satisfaction and so on.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
QUALITY IN FINANCIAL SERVICES
• A key to providing service quality is the understanding and
meeting of customer expectations. To do so requires a clear
picture of the criteria used to from these expectations,
recognizing that consumers of services value not only the
outcome of the service encounter but also the experience of
taking part in it.
• Meeting and exceeding customers´ expectations is even more
important as good and bad experiences can easily be shared
via blogs, social networking sites and websites. Ten criteria
may be used when evaluating the outcome and experience
of a service encounter (see next slide).
PROCESSES AND QUALITY IN FINANCIAL SERVICES
QUALITY IN FINANCIAL SERVICES
Access Is the service provided at convenient locations and times with
little waiting?
Reliability Is the service consistent and dependable?
Credibility Can customers trust the service company and its staff?
Security Can the service be used without risk?
Understanding
the customer
Does it appear that the service provider understands customer
expectations?
Responsiveness How quickly do service staff respond to customer problems,
requests and questions?
Courtesy Do service staff act in a friendly and polite manner?
Competence Do service staff have the required skills and knowledge?
Communication Is the service described clearly and accurately?
Tangibles How well managed is the tangible evidence of the service (e.g.
staff appearance, decor, layout)?
EVALUATION CRITERIA OF SERVICES
PROCESSES AND QUALITY IN FINANCIAL SERVICES
BASIC TYPES OF QUALITY IN FINANCIAL SERVICES
• Objective quality - these parameters are quantifiable (time
and locality of service providing, interest, fees, terms etc.).
• Subjective quality – it should be viewed in terms of
satisfying the client's requirements. There are subjective
criteria for measuring subjective quality – attitude surveys,
satisfaction surveys, complaints etc.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
SERVQUAL METHOD
• A scale called SERVQUAL model (GAP model) developed by
Zeithaml, Parasuraman & Berry in the 80s comes as a facilitator to
measure, evaluate and manage quality analysis of services and
has also been named as a method of analysis of the deficiencies
in service from the process to improve the service provided.
• Based on five criteria – reliability, responsiveness, courtesy,
competence and tangibles – it is a multiple-item scale that aims to
measure customer perceptions and expectations so that gaps can
be identified.
• The scale is simple to administer with respondents indicating their
strength of agreement or disagreement with a series of statements
about service quality using a Likert scale.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
SERVQUAL METHOD
• The meaning of the gapes is:
• Gap between what the customer expects and what the
company believes that expected.
• Gap between what the company thinks and what the
service provides.
• Gap between service planned and that really lends.
• Gap between what has been delivered to the customer
and what has been reported.
• Gap between customer expectations and what has been.
PROCESSES AND QUALITY IN FINANCIAL SERVICES
SERVQUAL METHOD – GAP MODEL
Source: http://www.serviceperformance.com/gap-5-roswell/
PROCESSES AND QUALITY IN FINANCIAL SERVICES