There is no point in asking your customers about the add-ons if the basics are missing, writes Brian Caplen.

Banks are constantly touting their efforts to deliver on customer service. In order to 'self certify' they ask customers to do return endless surveys, designed, it seems, to confirm that they are doing a great job. 

But the strategy of many banks these days consists of adding frills and gimmicks and failing in the basics. The starting point for customer service for banks should be to reduce payment and account errors to as close to zero as possible. Then ensure that when errors do occur the recovery mechanism is proactive, smooth and friendly. On top of that base a bank can successfully offer new products and services but not without it.

Very importantly bad service must not be built in because the IT cannot run the volume of payments being processed, for example. New mortgage customers should not be offered a better introductory deal than the one existing customers have. Savings accounts should not default to an uncompetitive rate without the customer being made properly aware and reminded. 

If these are features of your bank's business model then it needs rethinking in ways that many CEOs would prefer not to contemplate. It implies big investments in IT and the discarding of legacy systems. It requires exchanging immediate profits on some current products in return for earning customer loyalty in the longer term.

This is not an attractive proposition for a listed bank with impatient shareholders. But it is the only way to put the business on a stable footing and to stop annoying customers with surveys that do not address the fundamental service questions. 

Brian Caplen is the editor of The Banker. Follow him on Twitter @BrianCaplen

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