Banks don’t fare well in the Temkin Group’s recent UK customer experience survey. None are placed in the top 10 and only one makes it into the top 20. In fact, banks haven’t fared well for a while with anyone, being blamed for the last 4+ years crisis around the world and are the kicking boys for every aspect of corporate and personal greed. The media loves having such an easy target to point the public’s attention to.
I attended last week’s London TowerGroup conference (February 8 & 9). This was my first exposure to a banking event. I noticed conflict.
On the one hand, banking is, by breeding, a very conservative sector with structures and processes that remain largely unchanged for decades – perhaps even hundreds of years. Banks, card issuers, and the like, handle your money on your behalf. They bear little or no risk and you pay for their services either through fees (whether you realise it or not) or by allowing them to use your money but not pass on to you the full benefit. It’s quite simple really.
On the other hand, the world is moving much faster than they are. Technology enables instant, long distance, wireless, secure communication and transaction. Bank customers are pretty savvy and aspire to do lots of cool stuff using their mobile phone, mobile internet etc. But few banks are ready yet. Some are progressive, relatively speaking, but trail behind retailers and grocers (who, incidentally, dominate the Temkin rankings table).
Let’s briefly compare the banking and retail/grocery sectors
- Banking: slow, steady, careful (?), big salaries/bonuses, not trusted/liked by customers, big profits, rarely go out of business (and when they head that way are often bailed out by government)
- Retail: quick, dynamic, progressive, average salaries/bonuses, lots of loyal customers, low margins, go out of business or are taken over by competitors when they get it wrong
Why is this? What do banks need to do to be loved? Clearly, they need to change. TowerGroup analysts gave superb presentations about trends and the like in the industry but I wonder if focus within the sector is entirely healthy. Comparison with the outside world comes in two flavours:
- What are other businesses doing?
- What do customers want?
The best banks are showing a more retail/grocer-like face to the customer, and are making better progress as a result. Take a look at the efforts of Co-Operative Bank (#15 in the UK Temkin rankings) and First Direct (a very well regarded UK internet bank). Customers favour them. They clearly didn’t do what the others are doing but have made a difference that customers like.
“We listened to you and…” is quoted a lot by institutions. I say, thanks for the apps, and Saturday opening hours, and clear English T & Cs. But what took you so long? Customers have enjoyed internet shopping and communities, 24×7 opening hours and simple, honest words from retailers for years. Are banks catching up quickly or doing this grudgingly?
My closing comment – I joined one session that looked at Retail Banking in 2020. This was largely a focus on technology-enabled possibilities. Technology is exciting because of what it enables. I know because I provide insight and comment on the sector for my colleagues at SYKES. But I heard no prediction of changing attitudes and practices in the banking sector. This is troubling because without this banks will continue to be trundling behemoths, unloved and untrusted, and playing catchup at the customer’s expense.
PS – I met some really nice, super people and acknowledge their conversations and thoughts
PPS – what do you think?