subject: Retail Banking - A New Way For Customer Service [print this page] With the Independent Commission on UK Banking most recently issuing its waitted for report on the state of our present-day banking landscape, the options contained within it to improve retail banking customer service have been seemingly 'lost in the noise'-- by having our government apparently wishing to deflect attention by kicking it into the long grass.
However there is simply no escaping headline problems that emerged from the final report of Sir John Vickers as well as his colleagues, namely how do we cope with banks that are simply too huge to fail and how do we eliminate the risk of speculative investment banking toxifying retail accounts?
Retail UK banking, in contrast to investment banking, should be simply a simple business in which the bank takes our savings, marks them up and then lends them to others, or vice versa. But this basic technique has turned into an unwieldy beast with just about everyone you chat to possessing a retail bank atrocity story.
TripleIC recently conducted a study of 1,000 nationally representative retail bank consumers, with just about 70 % believing that banks don't care very much about what the public think of them, over 75 % rating the public image and reputation of the banks' retail operations as mediocre to dreadful, as well as an eye-watering 86 % thinking that the image and reputation of the banks will certainly not really improve or will literally decline over the next six months.
2 influences, linked however in no way identical, seem to be at work. The first aspect is the momentum towards on the internet banking and the spotlight that shines on the sluggish and ponderous 'old way' of accomplishing things. Ask yourself which is preferable - accessing a bank account from the train, your own home or an office, or trudging round to the bank in the rain and following a queue? Older customers feel less habituated to the online globe but the young consumers 'voting with their feet' adds considerable impetus to this inevitable online momentum.
Thirty years ago a surprisingly senior UK bank official remarked in an unguarded moment that High Street banking was hopelessly as well as irredeemably uneconomic-- as well as nothing that has come about in the intervening years has made that judgment less prescient.
The cost of maintaining a regional branch network has actually developed into a dead mass hung from the necks of banks. If bearing this burden produced contented customers there might just be simply something to be simply expressed for it, but it just fails to do so. Branch managers have largely been deprived of the power to make decisions on loans, thus further lessening the rationales to bother visiting the branch. When did you last do so? First Direct has actually responded to this economic reality with the intelligent stratagem of not owning any branches. Yet how have other banks responded?
The second element is simply the approach retail bank brands are simply made, maintained and generated. Various studies showcase that advertising slogans, for instance, have pretty low recognition amongst the public and the only one that had any genuine customer awareness was HSBC's 'the World's Local Bank.' This slogan was simply launched in March 2002, showing that it takes a lengthy time as well as costs a great deal of money to get any sort of traction and make an influence.
The consumers now pay more attention to the accounts of other clients than they do to promotional campaigns, with enthusiastic customers and 'brand ambassadors' being the market builders of the future.
A new company model is simply required for retail UK banking. The old company model was bank-centric where the bank saw itself as a central resource as well as which the customer could possibly approach the bank and humbly inquire whether any of its supplier-defined services fulfilled the customer's demands. Motivated by way of incentives, bank personnel tried to satisfy clients that items like Payment Protection Insurance met genuine requirements. So much for 'Customer Service'.
There is simply a clear requirement for a customer-centric business model, but few banks seem to be simply working safely and effectively to meet this requirement. When used properly, ' current media' can easily develop veritable talks with their customers as well as, as that famous book 'The Cluetrain Manifesto' puts it, "the market becomes a conversation".
Instead of their services being simply defined by what the bank wishes to furnish, they can easily be characterised by way of what the consumers need. The 'bank to customer' polarity is reversed and the customer becomes the market-maker of the future.
It all gets down to the culture of the banks themselves. In today's globalised and commoditised world there is simply constantly 'choice' but retail banks have sidestepped this evolution because of customer inertia. The typical perception is that it is merely too much hassle to change your bank account-- and if you do then the next bank you move to will definitely be simply no better.
This has actually resulted in a culture of complacency amongst UK banks. They 've been too big and too powerful for too long to fret too much what the customer REALLY suspects. Yet this will definitely switch around.
There are current rivals like Metro Bank, devoted to a customer-centric model, that are simply changing the game as well as there is little doubt that the tipping point will definitely come soon.
The bank that will certainly win this battle is going to be the one that changes its culture towards the agile, customer service centric ethos that is winning out in diverse sectors and industries across the globe.
Of course this conversion is not really going to be easy for the large banks to attain. At board level the banks are often conscious of what's happening and what's required. Yet layers of die-hard middle management are satisfied that the old bank-centric model possesses enough life left to see out their careers. One principal UK bank informed us that they currently have a team working on customer discussions, and that our investigation was simply a day late and a dollar short. However one look over the comprehensive reports from their customers shows their efforts might be expensive but are simply not working. Bank consumers are keen-- likely even desperate-- to enunciate their real demands, provided the banks are ready to pay attention as well as respond.
Now that the Independent Commission on UK Banking has issued its final report there is simply a window of possibility in bank customer service for those senior managers in retail banking that are savvy enough to see it. The question that needs to be responded to is will it encourage the banks to hold meaningful conversations with that 86 percent of customers who think the track record of the banks will fail to strengthen any time soon? Let's hope so.
