Dealing with the Todays Banking Customers or How to Get Some Sleep
By Roy W. Urrico
Not too long ago financial institutions dictated when to perform financial transactions through their 9-3 branch hours. Of course, the branch environment has changed dramatically in the past decade and will continue to change in the years ahead. With the adoption of the Internet, mobile technologies, e-payments and social media, accountholders are shifting quickly from the brick and mortar world to the digital world. Credit unions, as usual, eagerly accepted the challenge of multichannel delivery by diligently developing robust channels.
The fear is that as branches have become less important to numerous consumers who are more frequently choosing these alternate channels to do their regular transactions there is now a major disconnect with members. In addition, with all the channels now in play to satisfy member convenience demands, are branches still relevant? The answer is yes; branches are still the face of financial institutions for many significant financial life events. Branches remain the method consumers prefer for opening new accounts, mortgages, refinances, personal loans, insurance and investments. Research also suggests that the branch remains the primary driver of account satisfaction and brand identity.
This does not make the job of running a branch any easier. The challenges for branch managers have never been greater. What keeps branch supervisors up at night? For Donna Fain of Pioneer FCU her concerns center on meeting financial goals, training and keeping up with technology. The reason for those sleepless nights are items inherent with new technology such as investments in new systems, training and coming to grips with ROI. Plus branches are now more expensive to operate on a per transaction basis.
For many others branch supervisors the challenges involve meeting staffing needs and satisfying member service concerns.
Still Comes Down To Service
What has not changed at all it that everything on any channel still revolves around the accountholder and fortunately credit unions understand that better than most financial institutions.
There is much not to like about banks according to recent surveys. No doubt financial institutions worldwide have taken a thumping in terms of undesirable publicity in recent years following the 2008 financial crisis. Frequently disparaged for their shortcomings, retail banks receive constant reminders that they are unliked and untrusted. However some recent surveys indicate that the news might be worse than anticipated, as service at banks is deficient. In fact, the financial service industry as a whole needs the most assistance of any industry in customer service according to the surveys.
For instance, GMC Software, gauged customer opinion of retail banks with a survey questioning 4,032 consumers across the UK, Germany, France and the U.S. The report,
�The End of the Banking Autocracy, advised retail financial institutions to utilize technology better to offer a 24x7 cross-channel service. Nevertheless, even with better technology fulfilling service satisfaction needs must come with more human contact.
Another survey by ForeSee revealed that as a group, the financial services industry earned ominous service marks, with an average score of 75 out of 100 points ? the worst scores of any industry measured, including automotive, retail and apparel, and technology and electronics.
ForeSee?s survey factored in not just accountholders? overall experiences with a business, such as a financial institution. The survey quantified customer experience by calculating satisfaction scores for each of the 100 brands on a 100-point scale, as well as three key measurements that are predictive of future behavior ? retention, upsell and recommend. Customer opinions, across seven industries, came from 75,000 surveys during Q1-Q3 of 2013 and analyzed using the ForeSee methodology. The report features data that is predictive of future consumer behaviors for American Express, Apple, Amazon, Coca-Cola, Cisco, Facebook, Gillette, Honda, Google, Microsoft, Morgan Stanley, Oracle and more. The best-performing company out of the 100 surveyed was Amazon.com, with a satisfaction score of 87; while one new financial institution scored 65 to put it dead last.
While Amazon dominates the retail industry at the brand level (87), Nordstrom (86), Coach (85), Costco (84) and Tiffany (84) are statistically within reach of the leader. For financial services, American Express (82) leads MasterCard (76) by six points.
Industry comparison shows highest customer satisfaction in Automotive and Consumer Package Goods (CPG). Looking closer, ForeSee found that the Automotive and CPG (Consumer Packaged Goods) industries score highest (tied at 82) followed by Retail & Apparel (81) and Technology & Electronics (80). The Financial Services category registers at the bottom of the scale with an average score of 75. Financial Services also displayed the largest gap between the highest and lowest scoring brands within a category.
Add to that the reality, per the Foresee report, that with new technologies that facilitate connectivity, consumer expectations increased for all businesses. Retail financial institutions must perform some heavy lifting, given the high expectations from consumers used to exceptional service at other retail outlets. Like it or not, in today?s totally connected world service is measured against companies like Amazon.
However credit unions are not banks ? credit union branches offer members a better experience. That is at least, according to the 2013 Credit Union Satisfaction Index from technology and analytic firm CFI Group, credit unions scored more than 80 points on a 100-point scale in several areas based on responses from 400 members from across the U.S. Branch convenience, branch staff, online banking and communication were key reasons why members said they were satisfied with their credit unions.
What Consumers Really Want?Contact
The solution to the retail banking customer service issue is not entirely technological. A Diebold report strongly suggested that a friendly, knowledgeable staff, which falls right in most credit unions? sweet spot, remains one of the most important factors contributing towards the public?s assessment of a good service or otherwise, and its impact cannot be underestimated: the human factor matters. Today?s accountholders want more from their financial institutions. They anticipate a professional, skilled branch staff enabled with technology that delivers a personalized, secure and convenient experience. Most financial institutions recognize that they need to make changes to meet these consumer expectations. This is particularly true in their branches.
Consumers want a more personalized banking experience from the teller line to self-service channels, including mobile, online and ATM channels. The Diebold study reveals customers want financial institutions to remember their individual preferences, regardless of which channel they use to conduct banking. And they want their experiences catered specifically to those preferences. For example, if a consumer declines a specific marketing offer at one channel, the accountholder does not want that same offer at another channel. Many times, accountholders walk into a branch, call or login online only to receive the same cross-sale pitch each time. To achieve this level of personalized service, financial institutions are looking to ?big data,? collecting and analyzing a wide variety of consumer information through interconnected systems that update across channels in real time.
BankThink launched a new series in which consumers from dissimilar demographics expressed what they are looking for from their financial services providers. Responses varied widely, as you might expect. One respondent wanted faster person-to-person payments, while another wanted a return to old-school banking. A Baby Boomer accepted the appeal of mobile banking, but still wanted exceptional transactions to start and end with a handshake. Three students requested good customer service, voluntary overdraft notifications and community outreach, respectively.
Obviously financial institutions sense a mounting pressure to deliver a superior experience nowadays. It is up to the financial institutions to decide if they wish to adapt to the changing landscape or leave the future to the more flexible rival newcomers that are already rushing to engage customers and respond appropriately. Banks, and to a lesser extent, credit unions, must admit there is a problem and center on salvaging trust and become the trusted advisor once again. Delivering superior service becomes valuable to the financial institution when it generates more income for the financial institution or builds a more devoted accountholder relationship.
The desire to implement innovative technology is not a replacement for face-to-face interaction with competent staff. Accountholder demands reflect the world we live in today. This translates to nontraditional interaction; personalized service and 24x7 reach. Yet, the option of speaking to a real member-service representative should always be there at realistic (and maybe unlikely) hours of the day. The fact of the matter is that although consumers are in general comfortable using technology for the majority of their banking transactions they still crave handholding and access to knowledgeable representatives when it comes to more strategic transactions.
That is why it is not surprising that not only did credit unions score consistently higher than banks across the board in six areas that drive consumer satisfaction, according to the CUSI study, but the survey in looking at penetration of products and services among members, found checking and savings products each accounting for 94 percent penetration, and debit cards, 73 percent.� Other products have 30 percent or less penetration.
Fostering service excellence is one of the credit unions? foundations. Even more important, anywhere members choose to interact with your organization matters. Therefore it is more important that every interaction with members is rewarding for both parties. Especially since all locations take on more responsibility in today?s selling atmosphere.
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