TD Bank Quality
Improvement and Technology Issues
October 21,
2011
Yadisa Jerez
Smit Chokshi
Ammoura
Moustafa
Shielah Velarde
Junior
Saintilus
Rahul Muddam
Acknowledgements
Team: Yadisa Jerez, Ammoura Moustafa, Smit Chokshi, Shielah
Velarde, Junior Saintilus, Rahul Muddam
Interview: Catherine Cichowski (TD Bank Operations Manager)
Link: http://www.tdbank.com/
Introduction:
TD (Toronto-Dominion) Bank,
America's Most Convenient Bank is one of the 10 largest banks in the United
States, with more than 26,000 employees and deep roots in the community dating
back more than 150 years. TD Bank provides customers with a full range of
financial products and services at more than 1,275 convenient locations and
ATMs from Maine. The purpose of the report is to describe and to analyze some
situations in the quality improvement and technology issues that TD Bank is
facing. How helpful the technology is and what are the different measures TD
Bank should take to improve customer-Service and other different areas within
the company.
TD Bank is a commercial bank,
which generally has good earnings in Canada. In the United States, however, the
earnings are as not commendable due to the current economic conditions and
regulations in place. Due to the financial crisis of 2008, commercial banks
have experienced critical losses. The decline of the housing market caused
adjustable rates mortgages to increase that led several homeowners to default
on their mortgages. This loss significantly affected the banks’ money. Flawed
credits forced banks to constrict their lending conditions. Some banks suffered
some much damage that they were either bought out or opted to merge with
another bank. With the Durbin Amendment in place, the Federal Reserve Board has
set interchange fees, which restricts what a bank can charge for debit card transactions.
TD Bank provides Banking, Insurance, and Investment Services. Under banking and
insurance, TD offers a wide range of products and services for consumers in
need of assistance with personal banking, small businesses, and corporate and
institutional firms. The TD Investments banking consists of Ameritrade, TD
Wealth, and Institutional Trust. TD wealth provides services for clients
interested in concierge banking, trusts and estate planning, and portfolio
management. Institutional Trust provides services for trustees, retirement
planning, and captive insurance. TD Bank's Concept. TD bank's over 150 years of
proud service has been changed intensely. From just starting from one branch,
now over thousand they have really earned our trust. TD bank's profile is set
to seven different categories:
1. Make an impact
2. Build for the future
3. Inspire the will to win
4. Work effectively in teams
5. Live transparency
6. Show excellent judgment
7. Demonstrate unwavering integrity
With these pillars, they have really set their standards
high for all the competitors. Among the services the bank provides beside regular
banking operations, it also provides brokerage services and insurance products.
The bank is also involved in international trade. The bank provides and
facilitates financial transactions by advancing credits and loans to finance
home building and purchasing, also industrial loan to different industries such
as automobile makers, farm equipment, and others. TD bank has excelled in its
marketing techniques by using the most attractive ads, and special colors
pleasant to the human eye. Courtesy in dealing with clientele is paramount in
their consumer relationship. Should a mistake in transactions or any suspected
or fraudulent dealings, management make that the client is contacted and
corrective measures are taken to the satisfaction of customer.
Critical competitive factors and priorities function
TD Bank focuses on the customer and makes improvements by:
* Leaning processes – remove waste, rework, and inefficiencies
* Re-engineering processes – respond to new regulations or new
product offerings
* Design new processes – build quality into new products and
services
Two different process improvements:
Lean is about eliminating waste
(non value added activities) and maximizing flow (reducing cycle time)
by understanding value from the eyes of the customer
Six Sigma is about reducing
variation and defects. Delighting customers by providing high
quality, error free products and services with consistency Lean and Six Sigma
complement each other.
Quality assurance is responsible for all development of team members
and Customer satisfaction, providing leadership and direction to enhance
processes and practice within the call center.
TD Bank new mortgage rules target select few. The real target
real estate investors who will now have to come up with a 20 % down payment to
take their next property or forced to buy mortgage insurance. (By Jamie Muzik ,
mortgage specialist).
TD bank has entered into a purchase and assumption an
agreement with FDIC, covering riverside’s 58 branches in central Florida and
adding to TD Bank already growing network. Also cover first Federal eight
locations and American’s first three locations. In addition TD Bank will gain a
total of 80 Automated Teller Machines (ATMs) as a result of these transactions.
(By Cherry Hill, NJ/Portland, Maine/ Toronto April 16, 2010).
Advance current grows to Globe setting. Add quality to
targets market to insure providing quality services to their globe clientele.
Chang operating hours to fit customers needs by extending service hour to 24/7
@ week. Make their Credit Card services more secure by stamping secret code on
the card so it would be fraud free; also by protecting the consumer from any
fraudulent transaction and limit their responsibility to the first $50.TD bank
carefully choice niche services in its brokerage transaction. Operation manager
is concern about efficient and effectiveness of providing the service at the
minimum cost possible. Also eliminating unnecessary and repetitive operations. Keep
absenteeism at minimum as well as fighting tardiness by employee, insured the
efficient use of equipment and material within the office. Organization chart
should be balance with the lines of responsibility and authority as clear as
Chrystal.www.cou.on.ca/.../innovative-ideas-forum/...forum.../leslie-behnke,-t...
Improvement in Commercial Account Reporting
The merger of the Commerce Bank into the TD Bank, a
subsidiary of Toronto-based TD Financial Group, necessitated the transfer of
commercial accounts from one bank to another. The planner of this transition
took the opportunity to update the services and address customer’s requests
regarding the accounts balance statements that the bank provides to commercial
customers each morning.
Because of time constraints, which prevented an
exhaustive RFP process, and after evaluating other leading vendors TD Bank
turned to a familiar provider "OBS, Baltimore, Md." which offered ASP
solution, Online Messenger, with features and functionality needed. The
company's historical performance was enough to meet the deadline. In the first
week the new visual design was complete. The following two weeks completed the
phase of development, testing of data mapping, and the deployment mechanism.
During these activities the TD Bank communicated to his customers about the
pending change, to keep them informed. The end result was that the sunrise
report was launched on November 1, 2008 without a hitch. All data was extracted
from the accounting system on TD Bank's mainframe and delivered to OBS by
secure file transfer protocol (FTP). After the transfer was complete the online
Messenger engine converted the file into readable XML code for delivery to
appropriate channels. Then the report was populated and sent to customers. The
only challenge to this operation, which OBS could not do, was the automated
profile creation utility, which TD Bank staff had to create manually. The end
results exceeded all expectation. Now customers without online banking services
can receive the report via secure password-protected PDF e-mail attachment
instead via fax. Customer retention has also improved which supports the bank's
growth strategy.
Reference: www.banktech.com/articles/218501611
Automated Transfer Service
Automated Transfer Service (ATS) provides you with an
economical means of automatically transferring funds between accounts. Permits
zero-balancing or fixed amount transfer so that subsidiary accounts in a
hierarchy can have minimum operating balances can be programmed to transfer
daily, weekly, bi-weekly, any day of the month or last business day of the
month an inexpensive transfer service providing same-day transfers between
linked accounts may reduce borrowing and administration costs and maximize
investment potential by consolidating all balances to one central account
provides details of transfers on all account statements
Centralized Money Management (CMM) is an end-of-day transfer
service (CDN$ and US$) used to move funds deposited at branches of other
financial institutions to a concentration account at a TD Canada Trust branch.
This service is provided to clients who either do not have a TD Canada Trust
branch nearby or who wish to maintain the existing arrangements they have
already made with another financial institution.
•
Initiate transfers by contacting
the appropriate toll-free telephone number
•
Automatically credit the
concentration account and automatically debit the originating account
•
View detailed daily or period end
reports, containing previous day’s activity and non-reporting locations,
electronically via Balance
Reporting. (TD Securities – Collections)
What benefits does Centralized Money Management provide?
Consolidates funds to maximize investment opportunities
and minimize borrowing requirements. Detailed daily and period end reports
provide a comprehensive summary of transfer activity, which saves
administration and telephone expenses. The ability to deposit at any bank branch
provides flexibility and access to banking in locations where TD Canada Trust
is not represented. Uniquely identifies each depository location with a
reference number which simplifies reconciliation and deposit tracking for each
location (TD Securities – Collections)
Payment Receiver Service:
Allows your company to receive the non-financial details
of electronic payments made to your TD Canada Trust, without requiring you to
invest in expensive Electronic Data Interchange (EDI) technology. Payments are
deposited to your account and the information is delivered to you as an
easy-to-analyze report by fax, EDI, or as an electronic report sent via Web
Business Banking. (TD Securities – Collections)
Features:
Consolidates all payment information made through TD
Canada Trust in an EDI format, establishing a single communication portal for
the delivery of all EDI payment information. Enables receipt of EDI payment
information by non-EDI companies via their preferred format (fax or web
report). EDI file can be downloaded into accounts receivables application.
Available for both Canadian and U.S. dollar payments (TD Securities –
Collections)
Benefits:
Opportunity to maintain and/or improve relationship with
trading partners. Improved cash flow, payments received through this service
are irrevocable and guaranteed by the payer’s financial institution. Reduced
posting costs for tracking items, information delivered will be in a consistent
format Reports can be easily read and interpreted by front line staff. (TD
Securities – Collections)
Electronic Funds Transfer (EFT) - Debits:
TD’s Electronic Funds Transfer service is an electronic
pre-authorized collection service that reduces the time and cost involved in
collecting and processing your recurring receivables (debits). Payments are
collected from your customer’s account and deposited to your TD business
account on due date.
The service functions as an automated collection facility
for a wide range of organizations, including condominium corporations, insurance,
cable television, health clubs, property managers, rental and leasing
companies, magazine and newspaper subscriptions, utilities, churches and
charities.
Features to a company:
•
A direct file transmission can be
sent to TD via mainframe or PC directly
•
EFT file transfer service is
available through TD’s Web Business Banking providing improved collection
capabilities
•
The system accepts recurring
payments in varied amounts with various due dates
•
An electronic File Processing
report is available with the processing results including any rejected payments
•
Details regarding returned items
(i.e. NSF, account closed) can be sent to your Mainframe or PC and can be
quickly printed or downloaded for further analysis
•
Reports are provided on all items
accepted for payment, as well as on those items, which cannot be processed, to
complement your own internal reporting procedures. Reports can be provided
electronically, via fax, or through your branch (TD Securities – Collections)
How EFT benefits your company:
•
Eliminates the time and cost of
mailing and preparing invoices
•
Eliminates the collecting and
depositing of the received cheques
•
No more cash flow uncertainty; no
more "the cheque is in the mail"
•
Automated efficiency - reduces
clerical work and errors
•
Use Web Business banking or a
mainframe connection to transmit your debit payments (TD Securities –
Collections)
Features to customers:
•
Payments can be directed from any
number of accounts at any financial institution in Canada, per customer
•
Offers certificate of deposits,
checking accounts, saving accounts.
•
ATM deposits
How EFT benefits customers:
•
Enables your customer to enjoy
the convenience of having withdrawals made from any account of their choice
•
Customer convenience, no cheques
to write or mail
•
Eliminates the time and cost
involved in mailing a cheque
•
No chance of missing a payment or
incurring a late payment fee
•
Recurring payments provide a
simple method of payment (TD Securities – Collections)
EFT Solution:
•
Obtain authorization to debit
your customers’ accounts located anywhere in Canada
•
Send TD your payments through Web
Business Banking
•
TD debits your customers’
accounts on due date
•
TD credits your company account
for the total dollar amount on due date
•
Your customers are notified of
the debit on their next bank account statement (TD Securities – Collections)
Reference:
http://www.tdsecurities.com/tds/content/CMgmt_Collections?language=en_CA
Basic tools and equipment used
TD Bank uses a little of everything as their tools and
equipment and that is because there is many sides to the bank, there is the
teller line, CSR (customer service) side, bank office, customer service, etc.
Let’s start with the CSR side, which is more of opening accounts
and dealing with paper work. They do from opening accounts to loans. Here are
some of the main things they do in the CSR side: personal/business checking and
savings account, debit cards, credit cards, money market, CDs, mortgage, home
equity loans, personal loans, gift cards, line of credit, etc. (http://www.tdbank.com/net/banking.aspx)
CSR’s mainly deal with customer and help them get the products that best fits
their needs. And the equipment they mainly use are the fax machine, computer
with a programs, copy machine, printer and telephone because many times they
have to connect and get help from what is called the back office which is a
department that has more information.
Now let’s look at the other side which is the teller
line. The teller is the one that take all customer transactions like deposits,
withdrawals, bank check, money orders, cash advanced, bonds, transfer funds.
The equipment used by the teller are computers with a program, a scanner to
scan all checks and deposit tickets, phone, copy machine, microphone (in the
drive thru), money counter, etc.
Finally we will discuss the last side to the bank, which
is basically everyone’s responsibility. TD Bank is well known for Penny Arcade,
which is a coin-counting machine. Penny Arcade is free for TD customer and
there is a 6% fee for non-customers. Penny is one big responsibility because
many customers go count their coins and the bag get filled up so somebody has
to change them. Another machine that is extremely important in the banking
business is the ATM, especially now that so many people have moved to the
technology side of things. The main system of the bank is something called the server,
which has, is a system that transfers all the information that is on their
computers. And finally other two important responsibilities to everyone in the
branch are the vault and the alarm system. As we learned in process strategy
there are three types of customer-contact there is front office, hybrid office,
and back office. We categorized these three steps as the following: front
office is the teller, hybrid office is customer service and back office is TD's
back office. They are ranked in the way each department contacts with
customers.
Operations, Bottlenecks, and Skills
Recently, my team had a chance to talk to one of the
manager of TD Bank, by the name of Cathy, she stressed out so many important
points. In referring to page 14 of the textbook we have concluded that, the
company has emphasized more on consistent quality, we therefore consider four
basic factors in our research. Such as: TD Bank and the use of Technology, TD
Bank and Credit Cards Users, Customer service, and finally its Competitors.
First of all, let's start with the Technology issues, in
October 2009; millions of TD Bank Customers were affected by computer glitch
involving an information technology system that prevented customers from seeing
bank up-to-date information. Eventually the problem is being solved and they
have a much better and faster system, which allows them
·Review up to 18 months transaction activity on checking
and savings accounts.
·Review up to 6 months transaction activity on TD Visa
accounts (http://www.ehow.com/facts_7482678_td-banks-computer-problems.html)
Second, in terms of credit cards, in our opinion TD Bank
has one of the most generous rewards; it offers 2 miles per $1 spent on all
purchases. Earn unlimited miles each year, which do not expire. Miles may also
be redeemed for travel, merchandise, and gift cards. Benefits include purchase
insurance and emergency roadside assistance. Also earn
•
Easy redemption – No blackout
dates, restrictions or fees
•
No annual fee
(http://www.tdbank.com/personalcreditcard/easyrewardscard.html)
Customer service we break that into three important factors:
A-Security, TD has made a commitment to keeping your
confidential information as safe as possible. They have safeguards to protect
the security and integrity of your information. They have a phone system that
functions 24/7.
B-Freedom, you can do your banking when it’s most
convenient for you. Actually, you don't have to drive a mile before you can get
to a local TD Bank, they are everywhere. If you hold TD Bank credit card you
have so many options to pay, you can either: Mail your payment, pay online, pay
over the phone.
C-Flexibility - access your account from home, work or
anywhere else you can access the Internet. TD Bank is the one of many Banks
that functions on Sunday from11:00 am to 4:00pm Monday through Friday, 7:30
a.m. to 8:00 p.m. Saturday, 7:30 a.m. to 6:00 p.m.(http://www.tdbank.com/)
Competitors
TD Bank is competing by providing great services to
customers, small businesses, stores such as: free checking account for
students, convenient, free ATMs, a good certificate of deposit accumulates
interest daily by rate of 1.4 %, as you put more money you get a higher
interest rate. They charge $35 for over drafting, but you have the choice to
choose overdraft protection. TD Bank has high quality improvement, a much
better and faster systems, time and flexibility. TD bank is one of many banks
that open up on Sunday from 11: 00 am to 4: 00 am.
• In a highly competitive market, TD Bank ranks the top Big Five
in Canada and here in the U.S. ranks the top 10 largest banks with over 1200
branches all across U.S.
• Barron’s Magazine named TD Bank one of the best companies in
North America, ranking 13th out of the top 500.
(companies.http://www.wikinvest.com/stock/Toronto-Dominion_Bank_(TSE:TD))
Recommendations
Special Problems with Quality, Employees and Management
One of the major problems of TD Bank is Customer Service.
Repeatedly from 2009, there has been over thousands of accounts that were not
getting accurate account balances. The problem first started when TD Bank took
over Commerce Bank. Back in 2010, the same problem happened. Customers who
deposited their paychecks could not see the updated balance nor could they see
the pending status of the paychecks. Online banking was a huge mess as well.
They constantly had to close down their website for errors (TD Bank Reviews).
There were a few things that they gave tough time for to
the customers. Back in 2009 and 2010, the employees weren’t trained enough as
people complained. Many times when opening accounts, the employees were putting
wrong information or not checking the work after they put in the information.
They would usually make errors inputting the social security number. This would
cause huge problem. It would take weeks to solve this problem, as this would go
back and forth between their bank and their main office (TD Bank Reviews). In
addition, there were a few problems regarding their management, fees, and
mortgages. One of the instances, person would walk in, and they wouldn’t get
the service. As this country being mainly service economy, it’s a huge
downfall. The management's intention would not be in favor of helping the customer. Also, they had
problems with Non Sufficient Fund fees. Back when the accounts were not updated
in timely manner, the account holder would get charged the NSF fee because
their bills were charged on time, but paychecks were not updated in time. Also,
another example, people had problems with their refinancing and real estate
costs. Their real estate cost came out much more expensive then their expected
cost (TD Bank Reviews).
But in 2011, they had to take a huge step. Because of
losing the customers and getting them angry, they finally got new systems. TD
Bank’s IT team worked really hard and finally got it over. They upgraded their
systems and updated all the flaws. Before you could say, it wasn’t America’s
most convenient bank, but now sure you can! With all the locations they offer
in US and Canada, it’s really easy to walk in any TD Bank to finish up your
work. With over 5400 ATM locations and 1300 branches they are spreading more
and rapidly (Catherine Cichowski).
Recommended Specific Solutions
Total quality management (TQM) is a philosophy that
stresses three principles for achieving high levels of process performance and
quality: customer satisfaction, employee involvement, and continuous
improvement in performance. Customer satisfaction is an evaluation of how the
products and services supplied by a company meets or exceeds customer
expectation. Employee involvement is defined as the regular participation of
employees in deciding how their work is done, making suggestions for
improvement, goal setting, planning, and monitoring of their performance.
Continuous improvement is the philosophy of continually seeking ways to improve
processes based on a Japanese concept called kaizen. As TD Bank’s key issue in
customer service affects its overall performance and quality; the company
should focus on these three essential principles (Krajewski, Ritzman, &
Malhotra, 2010).
To resolve their customer service obstacles, we recommend
implementing the Six Sigma Improvement Model, which is a comprehensive and
flexible system for achieving, sustaining, and maximizing business success by
minimizing defects and variability in processes. The steps of the model are
define, measure, analyze, improve, and control (Krajewski et al., 2010). To fix
the delays in updating customer transaction information, which often resulted
in Non Sufficient Fund fees, we suggest upgrading the IT systems. TD Bank
should correspond with the IT department to discuss the problems and develop a
plan to resolve them. For the employees recording the incorrect information, we
recommend retraining these employees and reviewing their tasks and
responsibilities. If these employees still fail to execute their duties
properly, then they simply have to be dismissed and the company should employ
another worker who is qualified and can accomplish the tasks. With the issue of
management failing to provide the customer with assistance, management must
make further efforts to reach out to customers and attends to their needs.
Management should be confident the customer leaves feeling satisfied with the
service they had just received.
Conclusion
To sum it up, TD Bank is one of the largest banks in the
United States. They have many ways to provide good service to customers with
their convenient locations and timings. With over 5400 ATM and 1300branches
they are spread out almost everywhere. Even though taking over Commerce Bank at
first was a downfall for them, they really pulled it off after 2 years. Back in
2009 and 2010, there were lots of cases where the customers were angry and left
the TD bank because the bank was providing their needs. Many customers
complained, left angrily, and also left the bank. Problems were caused mostly
by their old system and because of the management as well. Their system was
really slow at first. But now with their new and improved upgraded systems,
they have started winning the trust of the people. Their computers are now
enhanced with more functions and are more reliable. Online banking has
completely changed as well. It’s more secure and much easier to use and
navigate. Because of our service economy they are even taking lots of
precautions. For example, they sometimes have secret shoppers as well, to check
whether the employees are correctly behaving and helping the customers. Also
they offer lots of other services. One of their very famous is the Penny
Arcade! The Penny Arcade is great, it’s free for all the customers who have
accounts with them or for 6% of fee if you’re anon-customer. Also they offer
Certificate of Deposit (CD). Their minimum CD is only $250 and it goes up to
$10,000 with daily compounding interest. As we talked about Total Quality
Management in Chapter 5, TD Bank really evolves around the TQM wheel. Their
priority is first, the customer satisfaction following by their continuous
improvements, which is followed by the problem solving tools (Krajewski).
References
http://www.ehow.com/facts_7482678_td-banks-computer-problems.html
www.tdbank.com
http://www.wikinvest.com/stock/Toronto-Dominion_Bank_(TSE:TD)
Krajewski, Lee J., Larry P.Ritzman, and Manoj K. Malhotra.
Operations Management: Processes and Supply Chains. Upper Saddle River, NJ:
Prentice Hall, 2010. Print.
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