How the banking sector can rethink customer service

The centuries-old banking sector needs to uphaul its customer service approach before it is too late.

 

In the 1860s, bankers would meet and discuss matters with their “clients” behind closed doors.
Today, the millennial generation of customers don’t even remember the last time they visited their banks. Thanks to online banking and mobile apps, they can open a new bank account, buy financial products and transact every banking operation remotely without undergoing the hassle of visiting a bank in person.

Must say that the ground is shifting in the banking sector. Despite the infusion of technology, providing good customer service in banking still remains a stressor. There are two challenges that banks have to face.

  1. Stealth entry of retail giants
  2. The reeling effect of the recession

1. Stealth entry of retail giants

Retail players are making stealth entries into the banking sector that is upping competition for traditional banks. The eCommerce behemoth Alibaba holds $96 billion of loans through its banking arm Ant capital, which is considered to be as big as the ninth-largest bank in the US.

Rakuten, the eCommerce giant of Japan controls the country’s largest internet bank and third-largest credit card company by transaction value. Amazon, Google, why even Facebook is planning entry into the banking sector in their own ways. It is quite evident that the banking sector is under attack from tech firms.

2. The reeling effect of the recession

Exactly a decade ago, as the present-day millennial generation was just entering adulthood, the recession hit the world big and bad. The sheer experience of recession that was triggered by questionable financial strategies has made millennial customers distrustful of banks. They are extremely diligent about whom they entrust their money with, how the bank uses that money, what kind of services they offer and much more.

With banks facing tough competition from retail players and with customer loyalty on the fence, it is high time for banks to raise their bar of customer service.

To raise the bar of customer service in any industry, a rough understanding of what customers want the most is necessary.

What do customers want out of customer service in banking?

Across the globe, every customer who uses banking services has more or less similar wants. Those wants include:

  • Quality of service
  • Convenience
  • Simplified processes
  • Safety & security of assets
  • Personalized services

The banks of today do have the digital expertise, sufficient funds and a growing necessity to provide customer service that matches all the elements of value. Here is how they can meet each of the value expectations of customers.

Quality of service: Set higher service target levels

Goldman Sachs entered the consumer loan segment recently with its Marcus platform. Apart from the impressive interest rates, which makes the Marcus platform unique is its commitment to customer service.

The platform which helps customers refinance credit card debt is literally waiting by the phone to attend calls. Marcus has an internal service level target to answer all incoming calls with 10 seconds. The platform also gives voice-automated machine and hold music a miss and instead connect callers to a Goldman employee almost immediately.

Service level target helps banks and every other business that has a call center to measure whether the service standards on a real-time basis. Service level calculation is a combination of two numbers that show whether the call center performance is extraordinary, satisfactory or bordering on lines where it needs improvement.

Convenience: Make self-service a culture

When it comes to offering self-service options to customers, the banking sector is ahead of the curve than the rest of the world. The ATM machine, which made its entry in the early 90s, is perhaps the first of all kinds of self-service that enables customers to perform several complex banking transactions with a single plastic card.

Two decades later, the smartphone has risen to a position where it is almost obliterating the very existence of plastic cards. Digital wallets and Near-field communication (NFC) payments have made self-service a way of life for customers.

Self-service is popular with customers for one prime reason — it is convenient. From sparing a time-consuming visit to the bank branch to getting things done on the go, these self-service offerings can offer several benefits to customers. Also, introducing self-service offerings will also make customers less dependent on their banks. This, in turn, will yield significant savings in resources for banks.

What kind of self-service offerings can help a bank maximize customer satisfaction? Some of the popular services include:

  • Fetching real-time account information

Not every account holder keeps a tab on their account balances on a day-to-day basis. A mobile app or an IVR system that can fetch updated account information with a few taps can put a smile on customers’ face.

  • PIN activation/replacement

An automated process designed with two-factor authentication can help customers activate new PIN numbers or replace their existing numbers right from their smartphones.

  • Wire transfers

Transferring money from one account to another, sending payments to registered beneficiaries, sending one-time/impromptu payments to other accounts, etc.

  • Value-added services

Self-service can enable customers to avail value-added services like getting deposit certificates, certified account statements, loan balance certificates, etc. without having to visit the branch or write a physical application.

  • Utility payments

Integrating third-party utility payment facilities within the bank’s online service ambit can make it easier for customers to carry out utility payments.

A classic example of this is the Bank of America’s mobile app. From deposit checks to securely sending money, the app lets users perform several banking activities, all at no extra cost.

Reduce anxiety: Deliver transparency in product features/transaction fees

One of the key factors that make customers wary about banking is the lack of transparency. Not all banks offer complete transparency in how customer funds are handled. Also, most often, they do not, make it easy for their customers to know the schedule of charges, the prevailing interest rates and the annual cost of owning an account.

A lack of transparency can detrimentally influence customer experience and even challenge the ongoing customer relationships. It also undermines customers’ ability to invest in the products and schemes that banks suggest.

For banking, or even the BFSI industry as a whole, trust is hard to earn. Loyalty is even harder to sustain.

How can this situation be mitigated? Setting up a transparent culture where banks provide accurate and updated information on charges, how their funds are used, annual maintenance charges and how their data is used can instill trust in customer minds.

If you think deeply about it, banks play a huge role in helping customers achieve their life goals. They are custodians of the most precious, liquid and hard to procure asset – cash. So, for any bank, it is essential to provide explicit information about how they use customer funds and on what basis they levy charges. It is those banks which serves its customers and not just it’s own that ends up labeled as a good-willed and transparent bank.

Simplify processes: Offer a quick way to reaching out to customer support

Until now, when customers confront mishaps like lost credit/debit cards, unusual account activity, wrong debits, etc. they dial up the customer service number and navigate through the IVR to register a complaint.

While an IVR system is effective for customer service, for emergency situations that require swift actions, a direct connection to the customer service agent is recommended. A toll-free number with a strategic voicemail greeting is the ideal option in such instances.

A toll-free number for the bank’s customer care makes it easy for customers to seek help without losing much time. Also, since the call costs are borne by the bank and not by the caller, it also makes them relieved, especially when the calls are made from international locations. The easier a bank makes it for customers to reach out, the more likely they are to remain a customer for long.

Personalization: Offers tied to spending behavior

From accessing the microphone to contacts stored in the device, users are prepared to share data with mobile apps without batting an eyelid. A study by Accenture found that 87% of customers are willing to share such data with banks also in return for faster, easier and personalized offers and services.

For example, a personalized loan interest that is tied to spending habits, average minimum balance, repayment history, etc.

Such personalization goes beyond calling the customer by name, wishing them on their birthdays and such shallow customer service practices. Banking customer service that addresses the true financial needs of customers on a personal level is what will maximize customer satisfaction.

Final thoughts: Transformation begins from within

The banking sector as a whole is undergoing a sea change. Digitally-savvy customers are forcing banking institutions to rethink how they deliver and interact with their customers. To sustain customer loyalty banks have to look within and fine-tune front-line processes. Processes, which customers use on a regular basis and those which can be simplified or made better.