Retail Banking – A New Way For Customer Service
With the Independent Commission on UK Banking recently issuing its waitted for report on the state of our current banking landscape, the opportunities incorporated within it to strengthen retail banking customer service have actually been simply seemingly ‘lost in the noise’– by having our government apparently desiring to deflect recognition by kicking it into the long grass.
Yet there is no escaping headline concerns 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 danger 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. However this simple process has turned into an unwieldy beast by having almost everybody you gossip to owning a retail bank atrocity story.
TripleIC recently conducted a study of 1,000 nationally representative retail bank customers, with almost 70 % believing that banks don’t care very much about what the public think of them, over 75 % rating the public image and track record 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 not really improve or will really decline over the following six months.
2 influences, linked but not really identical, seem to be simply at work. The first element is the momentum towards internet banking and the spotlight that shines on the sluggish and ponderous ‘old method’ of executing things. Ask yourself which is simply preferable – accessing a bank account from the train, your own home or an office, or trudging round to the bank in the rain as well as 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 not a single thing that has taken place in the intervening years has made that judgment less telling.
The cost of sustaining a regional branch network has become a dead mass hung from the necks of banks. If bearing this burden produced contented customers there might be simply something to be stated for it, yet it just fails to do so. Branch managers have largely been simply deprived of the power to make choices on loans, thereby further reducing the reasons to bother visiting the branch. When did you last do so? First Direct has reacted to this monetary reality by having the intelligent stratagem of not really owning any branches. Yet how need other banks taken action?
The second issue is the way retail bank brands are made, maintained and generated. Various studies show that advertising slogans, for example, have very low recognition amongst the public and the only one that had any veritable customer awareness was HSBC’s ‘the World’s Local Bank.’ This slogan was launched in March 2002, demonstrating that it takes a lengthy time as well as costs a great deal of hard earned cash to acquire any sort of traction and make an impact.
The clients now pay more attention to the testimony of other clients than they do to promotional crusades, with enthusiastic consumers and ‘brand ambassadors’ being simply the market builders of the future.
A new business model is required for retail UK banking. The old company model was simply 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 satisfied the customer’s needs. Motivated by way of incentives, bank personnel tried to satisfy consumers that items like Payment Protection Insurance met true requirements. So much for ‘Customer Service’.
There is a clear requirement for a customer-centric business model, however few banks seem to be working safely and effectively to meet this requirement. When used correctly, ‘ current media’ can certainly develop veritable chats with their customers and, as that renowned book ‘The Cluetrain Manifesto’ puts it, “the market becomes a conversation”.
In lieu of their services being characterised by way of what the bank needs to provide, they can easily be simply characterised by way of what the clients need. The ‘bank to customer’ polarity is reversed as well as the customer develops into 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 ‘ alternative’ yet retail banks have sidestepped this evolution because of customer inertia. The general perception is that it is merely too much hassle to change your bank account– as well as if you execute 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 simply too big and too powerful for too long to worry too much what the customer LITERALLY presumes. However this will change.
There are recent competitors like Metro Bank, devoted to a customer-centric model, that are transforming the game and there is little hesitation that the tipping point is going to come in the near future.
The bank that is going to win this battle will certainly be simply the one that adjusts its culture towards the agile, customer service centric ethos that is simply winning out in diverse sectors and industries across the world.
Of course this conversion is not really going to be easy for the big banks to attain. At board level the banks are frequently mindful of what’s happening and what’s required. However layers of die-hard middle management are quite persuaded that the old bank-centric model possesses ample life left to see out their jobs. One principal UK bank told us that they already have a team working on customer discussions, and that our investigation was simply a day late and a dollar short. Yet one look at the detailed reports from their customers shows their efforts may be expensive yet are simply not working. Bank clients are keen– oftentimes even desperate– to enunciate their legitimate needs, provided the banks are ready to pay attention and respond.
Now that the Independent Commission on UK Banking has actually issued its final report there is a window of opportunity in bank customer service for those senior managers in retail banking that are simply ingenious enough to see it. The question that requires to be answered is will it encourage the banks to hold purposeful chats with that 86 percent of consumers that reckon the track record of the banks will fail to improve any time soon? Let’s hope so.
Tony Lord & David Butler are directors of TripleIC, specialists in the measurement of Customer Engagement. David Butler is a former member of the investment committee of the United Bank of Kuwait. Luke Manning is a TripleIC Associate and from communications and branding company Rolling Thunder ( http://www.rollingthundergroup.co.uk ). http://www.tripleic.com