Our work with a high street bank resulted in multi-billion pound benefits for our client’s mortgage business and a dramatically improved customer service provision.

The bank had overreached itself by over-lending to customers in a drive to become one of the biggest mortgage providers. The outcome resulted in lost profits, customers leaving and low morale, which culminated in a high staff turnover and absenteeism.

We looked at the bank’s online broker mortgage process within the Retail Mortgage division and identified two major causes behind the bank’s problems:

Divided system

The division was divided into several functions – staff who took calls, staff who sent out product transfer quotes and staff who processed them. Service between the teams was disjointed and lead to customers being transferred a number of times before their query was resolved. The lack of trust between staff resulted in time being wasted trying to log and track work, combined with information being lost or insufficiently passed between teams.

Mis-directed targets

Efforts had been made to improve Service Level Agreements (SLAs), which were agreed between departments at the bank. This resulted in staff being too focused on hitting targets at the expense of providing the service the customer actually needed.
Customers weren’t getting their mortgage offer – despite the bank’s system showing that targets had been met. The reality was that offers took up to 88 days to receive and, due to similar processes through the mortgage application, mortgage completion and transfer of funds took up to 196 days. The impact on the customers was that only 3 % of customers were able to complete on the day they needed to.

Our analysis

Through the Himsworth 3D Diagnostics model we identified that as a result of the protracted processes, 36 % of the bank’s customers were dropping out of the mortgage application process, complaining that it was too frustrating and slow with potential losses estimated at £3billion.

Our solution

We quickly established that in order to implement the radical changes required to improve the service, reduce associated costs and leverage the £3billion lending opportunity, the whole mortgage application system had to be redesigned. An improvement team was established to carry out a full review of the system starting with a diagnostic of the problem and root causes, understand customer needs and to properly utilise the skill and knowledge of the staff. Using Himsworth methodology, staff were able to understand the problems from a customer’s point of view and see why the system was performing poorly. More importantly, they were in a position to improve it.

The results

Through understanding the bank’s operations as a system, putting the customer first and designing against their needs, the team achieved outstanding results:

• The number of days from an online broker mortgage application to an offer fell from an average of 47 days to five
• Days from application to completion fell from an average of 102 days to 27
• Complaints were eliminated having been consistently 12 per application
• Customers dropping out of the mortgage application process – with a potential annual revenue loss of £4.3billion – were reduced to zero
• The staff were trained in our model and methodology to enable a culture of genuine continuous improvement
• Staff levels reduced from nine teams with 250 FTE to one team of 40 FTE, while still managing 100% of demand

The future

We helped bank streamline its mortgage application service. Staff feedback said it established a new ethos that put customer service ahead of simply hitting targets. They benefitted from having more control over the work they carried out leading to greater job satisfaction and improved motivation. The bank saved a substantial amount of money due to an increase in staff capacity to carry out more valued work, with further cost savings made by removing waste from the processes.