The Covid-19 pandemic has imposed previously unseen challenges on firms to maintain operational excellence including those in the financial services industry.
When the coronavirus struck, banks, insurance companies and other financial service providers were immediately confronted with unforeseen operational constraints around business continuity. A new way of working begun that not many in the industry had tested – working from home; culminating in productivity tracking challenges, diminished client responsiveness and the utility of face-to-face human interaction. This, however, quickly stabilized with intentional strategic interventions.
The need to respond to fundamental changes in the business environment and customer behavior made operational excellence a topic of great interest in the financial services industry.
Operational excellence, or Opex, was first developed as a modern concept in the 1970s by Dr Joseph Juran, a leading engineer and management consultant when he was teaching Japanese business executives on how to improve quality.
Dr. Juran envisioned Opex as a way of ensuring excellence, generating customer value and promoting continuous quality improvement. This requires businesses to nurture and entrench a culture of operational excellence in everything they do.
Simply put, Opex is about ‘having a mindset of continuous improvement to achieve excellence but more importantly, focusing on delivering a superior customer experience at all times.
From a financial services perspective, operational excellence entails exceeding customer expectations while reducing operating risks by creating more efficient processes.
With the onset of the pandemic, financial services firms have had to innovate, scale and re-engineer their operations to remain relevant in an environment characterized by rapidly shifting customer preferences and loyalties.
Being a highly regulated industry, financial service providers cannot afford to ignore the role of Opex. Given the need for extreme fidelity to the client, nobody can argue with the need for sustained improvement of processes and the overall customer value proposition.
Opex has, therefore, become the proper tool to drive this execution. With clearly defined objectives of customer experience superiority and cost management optimization, the Opex toolkit of business process design, re-engineering, waste management, root cause analysis, among other factors, is now imperative.
To achieve a positive paradigm shift, there is need for smooth processes and personalized products that speak to or even predict the need at hand.
The writer is head of Operational Excellence and Analytics at UAP Old Mutual