Banking on the future
Do you remember opening your first bank account? Like me, you were likely still a teenager and depositing your grant or your first pay cheque. I recall feeling a bit intimidated because everything was so formal, from the building to the atmosphere, the counter staff in collars and ties and the bank manager in a frosted glass box.
This week I visited Clydesdale bank, part of National Australia Group (NAG) and realised I was standing in the same hallowed marble banking hall in which I had first stood more years ago than I care to remember as a nervous first-time customer. The magnificent marble pillars were one of the few things that looked familiar, the interior is fresh, funky and welcoming, more like an airport lounge or cool coffee shop and instead of speaking in hushed polite tones, staff and customers were laughing and chatting.
It is indicative of significant change underway in the banking sector. We heard at Convention about ‘truth in transition’ and it is clear that banks are in the midst of a major transition aimed at delivering better customer service.
The physical evidence is undeniable and there are also encouraging signs of cultural change (far harder and slower to enact), with an emphasis on inculcating strong adherence to core corporate values. We are seeing this in a number of major banks, led at the highest echelons.
Modernisation of systems is part of the transition process, entailing significant investment in next generation banking platforms capable of delivering omni-channel service which meets the needs of digital and mobile consumers who demand more from their banks. Mobile banking apps are becoming the norm, responding to consumers’ desires to automate simple transactions and use apps to ‘self-serve’ where they can, leaving the more complex issues to be dealt with face-to-face in the new-look branches.
Technological advances are transforming the service landscape - examples of recent innovations include Remote Deposit Capture which enables customers to use their smartphone camera to deposit cheques without physically visiting a branch. There is also evidence of greater deployment of proactive SMS messaging to communicate simple account information which helps customers stay on top of their finances.
A critical factor is that for the most part these change programmes are values-driven and centred on a commitment to rebuild trust with the public in the wake of financial scandals that have rocked the sector and fractured consumer confidence in financial institutions.
During our work on ‘The Future of Customer Service’, retail finance was one of four sectors we examined and we deduced that to an extent, the future customer service model is different than for other sectors, with distinct challenges to overcome including not only trust issues but also complex regulatory ones.
For instance, while the retail sector in general has embraced social media enthusiastically, banks have been slower off the mark, held back by legitimate concerns about the implications of engaging with customers via social media, particularly from a regulatory standpoint. Yet, customers are coming at them thick and fast over the Twittersphere and via Facebook and they have no option but to formulate a strategic response.
A report last year by Ernst & Young ‘The Customer Takes Control’ found that customers want to shape their relationship with their bank to suit them and that banks are changing their offerings in a number of ways, with some choosing to compete on low-cost and others on ‘high touch’ service.
CCA identifed three pillars which will form the foundation of future customer service in retail finance:
- personalisation - getting core self-serve right and delivering effortless service;
- proactivity - getting smarter about anticipating customer needs and wants; and
- personality - creating a powerful service offering with a distinctive personality
In 2014 we will continue our work with industry partners in detailing how to achieve this, drawing on our ability to benchmark progress not just within the retail finance sector but against other sectors, enabling a valuable cross-fertilisation of ideas. At one of the busiest periods of the year for retail and retail finance alike, don’t forget that CCA is here to help with some of the toughest issues facing customer service leaders not just next year but in the years to come.