Redesign of the Cash Reconciliation Process in a Banking Institution through the Application of the SMED Methodology

Abstract

Banking institutions require efficient and reliable operational processes to ensure financial accuracy and strong internal control. Cash reconciliation is a critical daily process that is traditionally performed at the end of the workday, often resulting in long closing times and increased risk of errors. This study presents the redesign of the cash reconciliation process in a banking institution using the Single-Minute Exchange of Die (SMED) methodology [1]. Although originally developed for manufacturing, this approach was adapted to redistribute reconciliation activities throughout the day through partial cash counts and continuous controls. A before-and-after analysis was conducted using time measurements and statistical evaluation. Results show a 27.63 percent reduction in total reconciliation time and improved process stability. Hypothesis testing confirmed that the reduction was statistically significant. The findings demonstrate that SMED can be effectively applied to financial service processes to enhance operational efficiency without weakening internal controls [2] [3]. Keywords: SMED, Lean Manufacturing, Changeover Time Reduction, OEE, Banking operations, Cash reconciliation, Process improvement.