Benchmarking

Benchmark Against the Best: Don’t just look in the mirror. Identify and benchmark your performance against best-in-class competitors. Sure, no one is exactly like you, but don’t use that alone as an excuse to be cost heavy.

enchmarking is a management tool whose time has come in banking. It is the process of learning, emulating, and exceeding the world's best practices to dramatically improve product and service quality. Benchmarking is a competitive strategy to win market shares and a survival strategy for threatened corporations and industries. As the banking industry becomes globalized and liberalized, clients anywhere in the world will soon expect the same world class service from any bank or financial institution offering the same products. A bank which does not benchmark may lull itself into dangerous complacency and deceive itself that it is doing its best or is at its best, while its customers may think otherwise. As customers seek better and better service, those banks which do not do continuous improvement through benchmarking are bound to lose customers and sales rapidly and irreversibly.

What do we benchmark? Ideally, we should benchmark processes and process targets like service times that matter to customers, rather than financial performance like sales, assets and volumes which matter only to management. Benchmarks can be practices or numerical process targets or standards set by your best competitors, whether or not they have been achieved. Quantitative benchmarks are more useful and objective than qualitative ones. They make it easier to assess how far you have gone in closing the gap with the best players.

With whom do we benchmark? Ideally you should first benchmark with your competitors or excellent companies in your industry operating anywhere in the world. Then you can benchmark with your affiliates, sister companies, and subsidiaries which may be doing certain processes much better than you do. Finally, you can also benchmark with...