In a dynamic world, two financial services, especially efficiency, are extremely important, and statistical tools can help. Among these tools are control charts that can help leaders of financial services companies who are looking to monitor performance and navigate the intricate terrain of process excellence.

We will explore two use cases in this blog post that show how control charts can improve team performance and reduce the risk of certain delayed processes.

 CASE USE #1: MONITOR THE EQUIPMENT PERFORMANCE

There are several statistical tools located in Minitab that can help monitor your team's performance and simplify your compliance operations.

Control charts can be used to monitor financial metrics or performance indicators to ensure they are in compliance with the most recent regulatory requirements. For example, control charts can track major financial ratios, such as capital adequacy ratios or liquidity ratios, to ensure they remain within control limits. Additionally, we can provide important information on error rates for compliance purposes. 

The NP Chart of errors nessa financial institution reveals crucial insights about the organization's performance in a period of 31 months. Since sending messages, responding to emails, and moving capital generally require a human touch, it is reasonable to know that some mistakes will inevitably be made. But, for compliance purposes, we want these errors to be the minimum possible.

Since the total number of errors per sample size (or sample size depends on the number of transactions made in each time period, or "events", such as e-mails, money movements or transfers) has shown a promising trend, it is important to address specific failure points in 1, 10 and 16.

These failure points indicate deviations from expected patterns and justify a more in-depth investigation. In this case, more errors were committed than they should be based on the size shown. To ensure compliance and maintain correct error rates, it is essential to perform a complete analysis of these points. This analysis can involve or examine the underlying causes, to identify possible process variations or external factors that contribute to the failures and implementation of appropriate corrective actions. Perhaps you have to work with some equipment, implementing a new process or working out excessively tired. Knowledge of these underlying factors can help in future corrective actions, such as adding additional people or improving training.

By addressing the root causes of testing failures and proactively taking necessary measures, the financial institution can refine its compliance efforts, minimize errors and maintain a consistent trend of improvement over time.

USE CASE #2: RISK MANAGEMENT OF EMPRÉSTIMOS AND PROCESS APPROVAL

Risk mitigation is extremely important in the financial sector. An excellent example involves the response time of loan approval, where control charts offer a powerful solution for risk reduction and process simplification. Slow response times can threaten business opportunities and lead to customer dissatisfaction.

Imagine being the leader of a financial services company focused on optimizing the loan approval process. Its objective is twofold: to ensure timely processing of orders and, more critically, to adhere to regulatory requirements. To achieve this, you take advantage of control graphics to monitor response time.

When you compile the data you start and configure the control graphs, the computer maintains the graph with new data (this can be done automatically with Minitab Connect). During the analysis, the team detects a recurring trend of approval times consistently exceeding the upper control limit.

As mentioned above, this indicates a risk: persistent arrears in the approvals of specific categories of loans can trigger customer dissatisfaction, lost business prospects and possible violations of regulatory deadlines.

Through an open analysis, the manager identifies which specific loan application documents require additional verification steps, causing significant delays. Furthermore, there becomes an unequal distribution of the workload between the processors.

Empowered by this insight, we can choose to implement process adjustments. This includes simplifying document verification, redistributing workload and offering extra training to loan processors.

As you alter the process, your control limits will be altered. After these alterations, the team continually monitors the alterations of the control chart in a new state with updated control limits. As the adjustments take effect, the team will observe a gradual return to loan approval times within two control limits. This demonstrates effective risk management and greater operational efficiency.

CONCLUSION

Through the lens of two striking examples, we test how control charts reinforce the performance of equipment and mitigate the risks. By taking advantage of data-driven insights, as financial institutions we can navigate the complexities of compliance, minimize errors and drive continuous improvements, helping your journey in the direction of efficiency and resilience.

 Content originally published in: Minitab Blog

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