FNA ILO: “The Lean Six Sigma of payments”
By Jeremie Feuillette (Managing Director, Global Head of Liquidity Optimisation Solutions)
The global banking sector leader of one of the world’s largest consulting firms fittingly described FNA ILO as the “Lean Six Sigma of payments”. The analogy captures our payment optimization solution perfectly, with parallels across each of the Lean Six Sigma principles.
Using GraphAI algorithms, FNA’s Intelligent Liquidity Optimization (ILO) solution optimizes intraday liquidity by resequencing payments. FNA ILO also provides real-time insights into LNNCP, liquidity usage, behavioral changes in the bank’s payments network, and driving factors by account, business unit, branch, individual client, or at a portfolio level, benefiting Treasury, bank business units and a bank’s customers.
Lean Six Sigma and FNA ILO:
1. Reduction of waste and improved efficiency
At its core, Lean Six Sigma is about reducing waste and increasing efficiency. FNA ILO, with its ability to significantly reduce liquidity buffers (e.g., over 30% in LNNCP and associated buffers) and improving working capital efficiency an average of 20%, mirrors these objectives. By streamlining payment processes and optimizing liquidity usage, the solution minimizes unnecessary expenditure and maximizes resource utilization.
2. Data-driven decision making
Lean Six Sigma emphasizes making decisions based on data and statistical analysis. Similarly, automated algorithmic decision-making is foundational to FNA ILO’s payment resequencing capability and the real-time monitoring of liquidity usage and inefficiencies. FNA ILO ensures that decisions are not just intuitive but are backed by solid, empirical evidence and scientific methods.
3. Continuous improvement
A key aspect of Lean Six Sigma is the pursuit of continuous improvement. FNA ILO’s capability to stress-test networks in real-time, analyze payment rail usage, and identify inefficiencies demonstrates a commitment to ongoing refinement and enhancement of payment processes.
4. Enhanced quality and customer satisfaction
Lean Six Sigma aims to improve quality and customer satisfaction. By identifying the largest liquidity users and analyzing client behaviors, FNA ILO supports the tailoring of products and services to client needs. This leads to better-suited liquidity products and more efficient fund transfer pricing, thereby improving the quality of service and customer satisfaction.
5. Variability and increasing predictability
Lean Six Sigma focuses on reducing process variability. FNA ILO standardizes and streamlines operations by providing insights into payment timing and distribution patterns. This reduction in variability leads to more predictable and reliable payment operations.
6. Cost reduction
A significant benefit of Lean Six Sigma is cost reduction, which is at the core of FNA ILO’s optimization process. The decrease in the use of liquidity in major currencies, and improvements in capital efficiency, directly translate into cost savings for financial institutions.
FNA ILO offers banks a crucial enhancement without affecting their existing operating models. This represents the next generation in real-time liquidity solutions, delivering both optimization and superior analytics without disrupting the bank’s operational processes, in line with a lean Six Sigma approach.
Designed to be future-proof, FNA ILO is equipped to accommodate the growing adoption of real-time payments (RTP, FedNow), central bank digital currencies (CBDC), increased capital/buffer requirements due to Basel 3, as well as new AI technologies, and to operate effectively in both business-as-usual and stress environments. To become a part of our forward-thinking banking client community, please reach out to us via email:Jeremie Feuillette (jeremie@fna.fi) or Phillip Straley (phillip@fna.fi).
