Process improvement of housing loan product in Thailand commercial bank

Abstract

According to digital disruption has become key factor that stimulates changing in business nowadays including banking business. To respond through rapid change in customer behavior and become competitive among rivals, this research is aimed to improve business process of housing loan product in one of commercial banks in Thailand which is mainly operated in manual operation and paper process and believed to be main symptoms of bottleneck in lending process.

The main objective of this research is to reduce lead time of housing loan business by going through the detail of business process to reveal wastes or non-value-added activities using appropriate lean tools and find possible solution to assess for improvement. By approach of lean tool known as Value Stream Mapping that being used as a key tool in research methodology, it revealed that majority of wastes were from long waiting time and long query time causing from unneccesary tasks and noncontinuous of traditional process. Therefore, possible solution from lean concept including method of simplifying and streamling of process and standardization were considered.

In addition, gathering with the concept of digital transformation in banking industry which were also revealed as the final solution in the form of new system implementation that was conducted in the studied bank, it showed improvement in shorter lead time by contribution of key capabilities from the new system implementation including electronic credit bureau check, automated credit decision management. The result revealed 62.3% improvement from reduction of cycle time in pre-screening stage that contributed lead time to reduce from 11 days to 6 days which can imply that by enhancement of transforming the process to be digitalized, it can contribute the process to be more efficient, seamless, and respond to the rapid changing in banking business decently.