RETAIL BANKING: ADDRESSING THE ISSUE OF CUSTOMER PROMISCUITY

By Kieran Arigho, Industry Consultant – UK Financial Services, Lexmark UK & Ireland

It’s no surprise that trust in the banking system is at a low point. In fact, according to the 2013 Capgemini world banking report, between 2006 and 2013 there has been a 50 per cent increase in the number of people changing banks.

More than 10 per cent of customers now change banks every year, and 40 per cent say they are willing to change banks in the next six months. It has never been easier and customers have woken up to that fact.

As a result of this, banking management need to rethink the role of their branch network and how they engage with customers, but it’s not the only issue. More and more transactions are taking place online, and most customers are heavy users of web or mobile portals. This means visits to the branch have become rare occasions for bank managers to engage with the customers. Inevitably, relationships are not what they once were.

Kieran Arigho

To combat this, a number of banks have launched ‘New Branch’ or ‘Next Generation Branch’ projects. The objective is simple: improve customer retention with better customer experience and fewer branches. Contradictory as it seems, question is: how can they make this a success?

The key to customer loyalty is to give people the service and support that they can’t get elsewhere. The most common customer complaint is that banking processes are slow and error-prone. The challenge here is that majority of services, like new account opening or mortgage application, are paper-based and handled manually. The whole process can take days or even weeks, and is often cumbersome and frustrating for everyone involved.

Customers want immediacy and they expect banking services to keep in sync. They expect services to be personalised according to their preference; they demand real time responses from bank managers; and they want to interact with their bank managers in a way that fits in with their lifestyle.

2015 will see the rise of omni-channel retail banks. Services and products will be customised and delivered to customers across multiple channels depending on the communications method of their choice – whether it’s online, mobile, call centre or in a local branch. This will take customer experience to a whole new level.

Some banks are already experimenting with this new way of working using the ‘new branch’ concept. Customer data is automatically extracted from the electronic or scanned application forms. The information is then cross-referenced with the existing database to validate the applicant’s ID and the system flags any potential errors for human verification. Not only does this simplify the process, it also eliminates the risk of fraud with the extra layer of security checks.

The information provides a more complete customer profile that enables the bank manager to create bespoke service packages that matches with the customers’ current financial and lifestyle needs. By providing more concierge style services, customers feel empowered and increase their loyalty to the bank.

In other words, if you as a customer get a fast, efficient and reliable service from your bank, why would you go elsewhere?