Customer-centricity has long been a buzzword but money-saving innovations such as call centresand online banking can alienate customers and damage your brand. Dan Barnes reports on the measures banks are taken to reassure their customers and reinforce trust.
There are growing signs that automation and associated cost cutting could be undermining customers’ trust in your bank. Improving the customer experience is an ideal that all retail banks claim to strive for.
In reality, the top priority for any publicly traded bank is giving a return to the shareholders, and any customer service initiatives are primarily about keeping or growing the customer base, or cutting costs.
Third-party warning
Banks that claim to aspire to ‘customer centricity’ while outsourcing telephone banking to generic call centres could do well to heed the adage “two’s company, three’s a crowd”. The third party they are using could be doing more harm than good – and if anyone is going to leave this current ménage-a-trois, it had better not be the customer.
Customer service is becoming commoditised and, according to Ralph Silva, senior analyst at TowerGroup, this is partly a reflection of the IT department failing to understand the importance of brand. Research carried out by TowerGroup among financial services professionals in 2005 indicated that while 87% of senior management and 40% of line of business (LOB) heads believed that emotional perception of a product was important, only 15% of IT leaders believed this to be true (see graph p84).
Kari Opdal, head of customer relationship management (CRM) at DNB Nor, says that brand focus must run all the way through an organisation and that includes IT. “There is a danger if you isolate IT; they develop systems and infrastructure while your marketing department work on branding separately. That doesn’t work. [The business] has a requirement for IT as part of its customer strategy so you can’t separate the two,” she says.
Another trend that the research highlighted relates to customer sourcing of financial products. Asked where they would get financial services products from, 50% of European consumers cited non-bank organisations among their preferences, whereas 15 years ago, this figure was only 1%.
The march of retailers into the financial arena grows apace, with products offered ranging from insurance and credit services to current accounts. This blurring of industry lines holds challenges for the future.
Historically, customers have associated banks with trust but the online experience can change this perception, warns Mr Silva. “You’re equating the customer experience with a bank to that of a consumer experience – for example, of buying books. So for the customer, their interaction with a bank is becoming similar to their interaction with other brands.”
More pressure on banks
As he points out – referring to one major retailer that provides financial services – if anything, the public’s expectations of banks creates pressures for their online service that other organisations don’t face.
“If [the retailer’s] website goes down from time to time, I as a consumer almost expect that, I don’t expect them to keep it going all of the time. For a bank it is not acceptable,” he says. “Banks are realising that there are financial services providers that have that flexibility and they must be more reliable themselves to differentiate.”
Trust is proving difficult to ensure, even away from the internet. Customer records have been exposed – through error, malice or both – to the risk of misuse. Incidents of staff (bank-employed or third party) selling records, exposing them online or simply misplacing them seems to be on the rise as information is increasingly easy to transfer electronically. People’s Bank in the US has become the latest to report a tape containing customer data to go missing while in transit and US subsidiaries of ABN Amro and Citigroup reported similar cases last year.
Such incidents are damaging but security can always be improved, albeit at a loss to convenience. In customer facing situations, however, removing convenience can risk losing the customer.
In an effort to improve relations, some banks are beginning to remove structured, mechanical communications with their customers. In the UK, Lloyds TSB has announced it is no longer using scripts in its telephone banking operations. Sally Jones-Evans, director of telephony at Lloyds TSB, explains that by trusting its staff, the bank believes it will also increase trust among its customer base. “We spoke to our customers and to our front-line staff. In a customer survey around 90% said that they found scripts annoying and 80% said they would like to see scripts banned from call centres,” she says.
“Historically for staff, scripts were like stabilisers on a bike. They might help less experienced staff and build confidence. Now, when a piece of text is mandatory and has to be said according to legislation, then of course we apply a script. But for customer service, we have a normal conversation,” she adds.
Retraining not necessary
The bank has not found the move required any additional staff training, only a period of transition to allow them to regain the confidence to ‘ride unaided’.
At DNB Nor, the bank makes efforts to ensure customers are receiving customised services, because of, rather than in spite of, technology. “We are developing more one-to-one relationships electronically,” says Ms Opdal. “The degree to which your communications are commoditised depends on your strategy. You can relate this effectively to IT and by enabling this across different channels it gives you much greater flexibility in reaching your customer.”
The bank is using technology to increase its service levels, for example, implementing a continuous survey for customers who have taken advisory products and checking that the theoretical principles by which the bank sells particular products are creating positive results for its customers.
Making IT work for the customer requires both system and data connectivity, says Tony Catalfano, worldwide president of technology provider Fiserv CBS. “What drives customers crazy is entering all of their data via a telephone keypad to get to access to their account over the phone and then being asked to provide the exact same information to the call centre. CRM is not an island.”
Silo system pitfall
He warns that where an offshore customer contact facility uses one system and the onshore uses another creating silos of information, “you are starting from a failed place”.
TowerGroup’s Mr Silva says that to mitigate the risk of weakening the brand, not only should marketing and IT be “in tune”, but the IT department must begin to focus on the purpose of the systems that they build, buy or implement and make decisions themselves. “In many cases, IT personnel should be the ones who say ‘no, we’re not going to implement this type of technology because it will affect the brand in this way’.”
