Changing customer comms at retail banks: The end of the banking autocracy?

6 January 2014

Banks in the past told us, the customer, when we could bank with them via the branch opening hours. This was revolutionised in the 1980s by the advent of call centres and latterly online banking with the internet revolution, and in this decade by the advent of mobile banking. Customer communication tools and technology often are not harnessed cross-channel to the optimum degree, however, and the art of the ‘human factor’ can be lost, warns Mike Davies of GMC Software, in this blog examining the latest consumer opinion of retail banks and what can be done to turn around the generally negative impression.

GMC Software recently carried out a survey questioning 4,032 consumers across the UK, Germany, France and the US to gauge how retail banks are viewed by their customers. Entitled ‘The End of the Banking Autocracy’, the subsequent report advised retail banks to harness technology better to deliver a cross-channel 24x7 service but also to remember the human factor and to make agents and real people available to customers to enhance customer service satisfaction levels, which were generally revealed to be very low.

Let’s face it, global banks have taken a beating in terms of adverse publicity in recent years following the 2008 financial crisis. Frequently criticised for their shortcomings by politicians and papers, retail banks are constantly reminded that they are unpopular and untrusted by the general public. Let’s step away from the headlines, however, and investigate the claims made against them a little more thoroughly.

With new technologies that enable always-on connectivity to the online world, consumer expectations have rightly expanded with businesses expected to respond to this challenge. Banks and financial services are no exception - if anything, the burden placed upon the retail banking sector is higher than that of other services, given the large-scale public outcry at even the most minor online or mobile banking outage, even if such an outage is scheduled. When it is an unscheduled outage, as in the case of RBS, all hell breaks loose.

Survey Findings
When asked if their retail bank values them as a customer by the Ipsos Mori pollsters for GMC Software’s ‘The End of the Banking Autocracy’ research carried out this quarter, the figures only just barely got into double figures. The data, gathered from 4,032 consumers across the UK, Germany, France and the US show just 6% of respondents in France strongly agree that their bank values them as a customer. This compares with 10% in the UK, 20% in Germany and 27% in the US.

The first reaction to such grim news about how negatively consumers view customer service levels at retail banks is usually to put forward a variation of ‘how did this happen’? Let’s be honest though, and admit that a lot of the reputational damage has come from factors far outside the customer communications team’s control: The 2008 financial crisis and resulting headlines of greed in the investment banking sector are the elephants in the room here and have had knock-on negative effects on banks’ general reputation.

Consequentially the question ‘what have we got wrong to make customers dislike us so much?’ is a little redundant. Banks must admit there is a problem and now focus on what can be done to regain trust and once more try to impress their customers.

Using Technology to Support Customer Service
The online and mobile world will be the arena of the future and retail banks simply have to have good service in this area and increasingly in the social media space. Banks need to be viewed as technological pioneers that are at the centre of all financial transactions, and be able to deliver a personalised seamless service to each and every customer no matter what end point they are using. This is not easy with siloed systems but it is a challenge banks must overcome.

Customers want to make their own choices when it comes to how and when they decide to communicate or transact with their bank. Overall, 72% of consumers according to the Ipsos Mori/GMC poll would like to receive information from their bank in a format that they have requested, and 74% felt this data should be available whenever they want it 24x7. Banks must therefore remove many of the delays and inconsistencies in communications with their customers in order to start building back the trust lost over the last five years. Furthermore, they must recognise that with the advent of an always-on connected customer base, they must be able to allow the customer to dictate the service they wish to receive and customise it to meet their demands.

I believe the solution to the retail banking sector’s customer problem isn’t entirely a technological affair though. Friendly, knowledgeable staff remains one of the most important factors contributing towards the public’s assessment of a good service or otherwise, and its impact cannot be underestimated. The human factor matters.

There’s plenty of food for thought here for the traditional ‘western’ retail banking sector - generally, more modern banks in emerging markets can skip over the legacy concerns and silos that hinder more established banks. My advice is that retail banks in developed markets should not be pushing certain kinds of communications through certain channels - for example, customer service via twitter should not be prioritised to the detriment of other areas such as telephone support.

Customers demand a malleable, personalised service and sometimes this means out of office hours online or mobile banking support, but the option of speaking to a customer agent should always be there at reasonable hours of the day.

The banking autocracy, where customers were told when and how they would receive information on their finances, is coming to an end. It is now up to the banks to decide if they wish to adapt to the changing landscape or leave the future to the more flexible rival newcomer banks that are already rushing to open the customer experience gap or respond appropriately.