Sophie Guibaud, Vice President of European Expansion, Fidor
If you are British and of a certain age, you will likely remember the Midland Bank and its iconic slogan, “The listening bank”.
Repeated in TV commercials through the 1980s, that phrase came to define Midland as the most customer-friendly amongst what were then the Big Four of UK banking.
Midland was well-loved - at least, until HSBC acquired the bank in 1992 and scrapped the brand seven years later.
What has happened since that time in banking has been less than friendly - big banks are now best known for under-performing on customer service and, worse, for breaking customer and industry rules of trust.
It has been two decades since the UK truly had a “listening bank”, one that heard customers’ views and acted on them, one that helped people in their financial ambitions. Instead, banks so often seem to run in their own interests, not those of consumers.
It’s no wonder complaints about banks have grown to a five-year high, according to the Financial Services Ombudsman, and customers’ average satisfaction with UK banks is just 62%, according to Which?
But a return to the old way of banking past is possible, thanks in part to the new technology of the future. Doing so will require a change of mindset by today’s big banks. Here is how they can start:
1. Open a direct feedback channel
Nevermind “too big to fail”, some banks are simply “too big to hear”. When you don’t build the mechanisms to be habitually aware of what your customers feel, how can you hope to understand the services they want to receive?
One Barclays customer recently told me how he called to offer his views on certain service features, but was told there was no process to handle comments, only to deal with complaints. To be in tune with what customers want, banks should normalise channels for customer input that aren’t just formal customer service projects but which link directly to product teams who can quickly change or build things.
2. Make input public
If a tree falls in a forest but no-one is there to hear it, has it really made a sound? A similar aphorism can be applied to bank customers - when you can see other customers are communicating with a company, you are much more likely to feed back yourself. After all, why would someone be motivated to take action if they cannot see their comments being received and acted upon, or if they believe they are a lone proactive customer?
At Fidor, we operate a community feature request messaging system - not only can customers see and endorse each other’s ideas, they can also see when our staff act on them. That generates a real feedback loop in which ideas and concerns are expressed and also resolved.
3. Act in customers’ interests
Modern banks place far too much emphasis on selling customers new and unnecessary financial products. Some banks’ online platforms even show ads for loans in between customer bank transactions - that borders on the offensive.
But judging staff by product sales targets is non-sensical, and anti-consumer. A far better yardstick would be to judge employees by customer satisfaction and loyalty. It is important to be by customers' side, not at their doorstep. As a bank, your only interest should be ensuring customers can make the best of their financial position, not you of yours. If you achieve that, rest assured, your own future will be a bright one.
4. Let them shape you
These days, consumers want to feel they are really part of the service they buy. That means asking their views to help mould your business - not just cosmetic or marketing exercises, but the real underbelly of your company.
This philosophy is intrinsic to our business - we involve customers in everything we do. We have tapped our community of clients to name our new MasterCard offering and to design our new instant transfer service.
But we don’t just stop at the surface - even our account interest rates have been developed in close cooperation with our customers. Weeks before we propose a change, we ensure customers are informed and can feed in to influence our decisions. Don’t customers always want the lowest loan rate? Not necessarily - if you keep them informed as part of a conversation, they will always understand that a fair-minded bank has to cover its costs.
5. Listen from top to bottom
To be able to implement the feedback of clients, the organisation needs to be able to follow. That means the bank needs to communicate its vision to both clients and employees, integrate customer feedback, install customer-centric core functions while aligning their governance and incentive systems to happiness, as well as growth.
The UK can have a listening bank again. But doing so will not be as simple as HSBC resurrecting the Midland Bank brand on the high street, as it recently said it was contemplating. Instead, banks will have to fundamentally rethink their approach to customer relations, by treating their members as co-managers and not simply customers.
By Sophie Guibaud, Vice President of European Expansion, Fidor