After achieving success using the lean-management approach¹ in retail financial services, leading institutions are starting to utilize lean-management principles in their wholesale businesses. Some early adopters we know, recognizing that areas such as securities services and the processing of trades are ripe for change, have already achieved major improvements in accuracy, timeliness, efficiency, and even risk control—for instance, a reduction in the number of “breaks,”² open items, and errors.

Yet some in the industry remain skeptical. First, the wholesale sector’s profitability has historically depended on a constant stream of innovative expert-based, highly tailored, and high-margin products, so leaders may question whether lean’s production-based insights apply to wholesale banking. Moreover, although the processes supporting those products usually start off as intensely manual, the industry has been at the forefront in the use of automation, outsourcing, and offshoring to reduce marginal costs as products mature. An understandable concern is that lean’s process changes would upend vendor relationships or require yet another round of technology investments. Finally, some institutions we’ve seen are pursuing other efficiency initiatives that appear to incorporate similar ideas and fear that lean might interrupt them.