Business Management Articles
/ Banking Service Management


by Rene T. Domingo (email comments to

One sure way of dramatically enhancing banking service is the reduction or elimination of handoffs. Elimination of handoffs is perhaps the most important tool of business process reengineering. A handoff is the passing of work - a document and/or the customer himself - from one work station or process to another. It begins with the front line employee whom the customer (depositor, borrower, inquirer) meets first. The work is then passed on to the support or backroom people in a linear and sequential fashion. The service is usually completed when the processed work returns to the front line station where it originated from. Sometimes, the work ends up somewhere else, and the customer meets a different person at the end of the service.

The alleged reasons for a majority of handoffs in a bank are control and security. Most handoffs are not processes by themselves. Oftentimes the document does not change in handoff processes. The document can be an application form, a passbook, or a check. They are merely checked, cross-checked, counter-checked, rechecked, or validated. These inspection procedures are mostly signing, putting one's initials, re-calculation of amounts, and verifying of amounts, balances and signatures. Actually what is being checked may not be the document itself, but the people who prepared or checked it in the prior stages. Many handoff operations are merely checking people who checked other people who checked other people. What is amazing is that bankers look at these redundant steps as necessary and as conforming to standard industry practices.

Another reason given for handoff is efficiency and specialization. The theory is that if a person is assigned one task, a simple one at that, and asked to repeat it over and over, he would develop speed, confidence, and competence in doing it. While the efficiency of each station may develop because of specialization, its effects are cancelled out by the lost time due to handoffs from one specialized station to another. Oftentimes, the increase in speed is more than offset by the much greater increase in travel time, transport time, and waiting or queuing time due to the handoff. The paradoxical result is an exasperated, exhausted, irritated customer being served by highly skilled and efficient personnel. As individuals these employees are admirable. But as a group or system, they are a service disaster.

What is irritating to bank clients is that handoffs increase his waiting time. He feels that his time is being wasted by this runaround. He becomes uneasy especially if he can see the circuitous and mysterious handoff processing of his document. In most banks, backroom operations are visible from the lobby. He may get traumatized if he sees his document placed on an empty table, with its occupant, the signatory, no where to be found. Perhaps it may be put under a heap of files attended by somebody who seems to be taking his time. If the customer himself is part of the handoff, then he feels insulted and exhausted by having to walk back and forth. He then wonders why the bank makes serving him so complicated when the truth is that he wants the bank to get his business.

Excessive handoffs are symptoms of the bank's lack of people empowerment, poorly trained and unreliable staff, management mistrust of employees, and antiquated procedures. Customers, however, do not know nor care about this mismanagement and other reasons of inefficiencies. He just wants to transact business quickly and get out of the bank as fast as he can. He either walks out as a satisfied customer or as a lost customer.

Paying my credit card was one classic example of bank handoff. I think other bank services with handoffs will be similar in nature. My statement of account did not arrive on time. I called up the credit card company which told me that there could have been a problem with the mail or perhaps it was lost in my office. The staff told me the amount I owe them and pleasantly assured me that I could simply pay it even without the statement in their affiliate bank. I went to a branch of that bank across the street. One queue says "Fast Line, One Transaction Only". It was the longest queue but I only had one transaction to make. It was not that fast. After 15 minutes, I was in front of the teller who told me that she could not accept my check without first getting a provisional statement to replace my missing statement. I asked her if she could do that herself for me, since I did not know any better, and besides, somebody told me I could pay my account without any statement and hassles. That was not her job she said, and she explained that I had to get that statement from a special accounts teller inside the bank, who handles among other things- foreign exchange accounts, new accounts, telegraphic transfers, and other miscellaneous transactions. When I arrived, naturally, there was a queue already building up in front of this second teller. After another 15 minutes, it was my turn. She quickly wrote and issued me the statement; it was actually a provisional receipt. I asked her if she could accept my check payment, since she issued me a receipt anyway. The answer was "no". She instructed me to go back to the first teller and surrender my check and receipt to get my official receipt. I returned to the first teller only to be greeted by a longer queue since I left it. While in the queue, I noticed the next counter was open and without a queue; it says "For Late Deposits Only". I really wanted to leave my check with that idle teller and dart out of the bank. But I was not depositing anything, I thought. It was too risky to be rejected again, and give up by line now. When my turn came again, the teller examined by check, looked at her watch - it was past 2:00 - and told me to pay in the next counter because it was passed clearing time. I protested that I was not depositing anything, but paying my card. There was no use arguing; I thought she was dead serious. As a fitting ending to this customer service tragedy, when I stepped into the next counter, I was number 10 in the line. This last teller said "Thank you" after getting my payment, oblivious of what transpired before.

I believe all the bank personnel in this encounter were pleasant and think they are doing their best. They was no reason for me to argue and protest, though every offended customer has to right to do so. To these employees, service means doing their jobs right, i.e., following the bank's procedures, and not allowing for any deviation. They were true to their job descriptions and assignments. Despite the obvious irritation and protestations of the customer, these employees are confident of their stand and decisions, because they believe that the bank and its management will back them up. Yet they, the management and employees, forgot one thing. The customer, or myself, wanted the obviously simplest service: the first teller, in the first encounter, should have accepted the check right away and issued me a receipt, without any handoff. I could have been out of the bank in two minutes flat. They was no reason for any control procedures. I was paying by check, not cash. Moreover, I was not receiving money from the bank; I was giving the bank money.

How do we eliminate handoffs and dramatically improve customer service? Reexamine and reengineer the whole service delivery process. Trust your employees. As somebody once said, "If you suspect a man, don't employee him; if you employ a man, don't suspect him" Trust will eliminate many unnecessary counter-check handoffs. Empower your employees. Enable them to handle special customer problems and situations by themselves. Enrich their jobs and make them multi-skilled through continuous training. As employees become empowered and capable, push your backroom operations to the front. Finish as many processes in the front line as possible, as fast as possible, while the customer waits. If handoffs are unavoidable, then it should be done after the service is consummated and the customer has left the bank. In other words, make these handoffs invisible and irrelevant to the customer. Do not let them affect the customer's waiting time. Finally, look at and listen to your customers. Your customers are the best source of advice and improvement ideas. Consider their complaints as opportunities to improve service.


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