LANB-PartsA&B - Quality in Banking: Los Alamos...

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Quality in Banking: Los Alamos National Bank i By William M. Lindsay, Ph.D., P.E An earlier version was presented at: 3er. Congreso Internacional de Ingeniería Industrial y de Sistemas ITESM-Morelia Campus Morelia, Mexico September 17-21, 2008
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2 Abstract A case study of the Los Alamos National Bank, a Baldrige Award winner, provides the framework for analysis and discussion of quality in service organizations using the Baldrige Award criteria. Applications to various facets of performance excellence in banking, including leadership, strategic management, market focus, information and analysis, human resources, operations and results will be considered. Other relevant examples of quality in banking services will be cited. The Quality Framework The Malcolm Baldrige National Quality Award The Malcolm Baldrige National Quality Award MBNQA (similar to the Premio Nacional de la Calidad de México) provides a framework for judging the level of quality and performance excellence in an organization. The Los Alamos National Bank won the MBNQA in the year 2000, and is the only bank to have done so. By viewing mission, strategy, operations, and results, as measured by the Criteria for Performance Excellence of the award process, many insights and best practices may be discovered 1 . Quality Profile Los Alamos National Bank 2 Los Alamos National Bank (LANB) is an independent community bank that provides a full range of financial services to the consumer, commercial, and government markets in northern and central New Mexico. With assets in the year 2000 of $650 million, LANB has 167 employees and locations in Los Alamos, White Rock, and Santa Fe. LANB is the primary financial institution for 66 percent of Los Alamos County residents and is the largest Guaranteed Rural Housing lender in New Mexico and the leading originator of Fannie Mae loans in northern New Mexico. Because of streamlined procedures, LANB approves home equity loans in two days or fewer while its competitors take from one to six weeks. LANB has a high level of customer loyalty. One-third of bank customers have five or more banking relationships with the bank, an industry benchmark at more than five times the national average. In a recent survey, 80 percent of the bank’s customers said they were “very satisfied” with the service they received. This is considerably higher than the levels received by its primary competitors (52 percent and 40 percent) and the national average for banks (55 percent). Returns on key financial indicators exceed local competitors and the national average. For example, the bank’s net income has increased by more than 60 percent over the five years between 1995 and 1999; annual return on stock exceeded the S&P 500 by 50 percent; return 1 Download the Criteria from http://www.baldrige.nist.gov/Criteria.htm 2 Source: Malcolm Baldrige National Quality Award 2000 Award Recipients Press Release.
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3 on average assets has exceeded the national average every year since 1995; earnings per share
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LANB-PartsA&B - Quality in Banking: Los Alamos...

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