TQM IN BANKING SERVICES

TQM in Banking Services

Abstract

This paper presents the results of research carried out at the University of Bradford's European Gentre for Total Quality Management (TQM), investigating the status of TQM within the financial services industry in the UK. The research finds that at the present time the financial services industry is in a state of considerable structural change, and competition is intense. This paper explains that the case for adoption of TQM as a generic strategy is now established and overwhelming. However, it is apparent that financial services are lagging behind other sectors in this regard. The research finds that TQM is not yet well established as an overall management philosophy. The leading group have 2-3 years' experience of implementation, and are assessed as low to medium adopters when measured using the European Quality Award model. There is strong evidence to show that the leading group have achieved marked improvement in performance. The research also shows, however, that some implementations have failed to deliver expected benefits, and in some instances costs have been extremely high and the consequences of failure significant. The reasons for these differences are explored. Summary case studies are presented of five organizations from the leading group, and their approaches to implementation compared and best practices identified.

Table of Contents

Abstract2

Table of Contents3

Chapter 1: Introduction5

Introduction and Background5

The Case for Total Quality Management in Financial Services6

Chapter 2: Literature Review10

Guaranty Trust Bank10

Principles of GTB10

Challenges for GTB of TQM14

Major Issues with GTB and TQM15

The Needs of Organizational Changes18

Assessing TQM in Financial Services24

An assessment of bank total quality services in the UK and Nigeria27

Contemporary Issues in Financial Services and TQM30

Bank Capital36

Governmental Regulation versus Self-Regulation43

Serving the Underserved47

Retail Banking Model52

Advantages of Internet Banking in the Nigeria53

Chapter 3: Methodology58

Methodology58

Chapter 4: Data Presentation, Analysis and Findings61

Findings and Discussion61

Case 161

Strengths63

Weaknesses64

Case 264

Strengths67

Weaknesses67

Case 367

Strengths69

Weaknesses69

Case 470

Strengths70

Weaknesses71

Case 571

Strengths72

Weaknesses72

Chapter 5: Conclusion74

Disadvantages of Internet Banking Services75

Stakeholder Demands77

Stakeholders and the Website78

Summary, Conclusions and Recommendations79

Diagnosis81

Implementation82

Measurement and Review82

References84

Chapter 1: Introduction

Introduction and Background

The financial services industry in the NIGERIA is presently in a period of turmoil and major structural change. A number of factors demonstrate why this is so: progressive deregulation of the building societies in the past 10 years (Wrigglesworth, 1994 a, b; Coles, 1993; McKillop & Ferguson, 1993); the maturing of the residential home loans market (Bootle, 1993; McKillop & Ferguson, 1993); changes in the nature and structure of the traditional markets for personal savings, life assurance, and general insurance (Bootle, 1993; Coles, 1993; Morgan & Sturdy, 1993). Others have argued that financial services are now becoming increasingly open to global competition (Llewellyn, 1995; Morgan, 1992; Nellis, 1994).

As a consequence, the major institutions are seeking to consolidate their positions, with a number of substantial mergers announced in 1995, and other major building societies announcing their plans to seek conversion to limited company status.

Research by Altunbas et al. (1995) supports the notion of consolidation, finding that reasonable scale economies are achievable in particular for bank-building society mergers. McKillop (1994) also finds evidence to support economies of scale and ...