Member Article

Customer Service: The New Focus of Financial Institutions

A study conducted by consumer group, Which?, discovered that in the past year, a quarter of UK bank customers have incurred problems with their accounts, the majority being poor customer service. For most financial institutions, customer satisfaction doesn’t always come before profits.

However, the launch of the Payments Council’s “Current Account Switch Service” has urged financial institutions to reevaluate how they treat customers. This service allows customers to efficiently switch between banks at no additional cost and is available for consumers, small charities, small businesses and small trusts. By analyzing the metrics made available through a Customer Experience Management (CEM) solution, financial institutions can identify areas of improvement, increasing customer satisfaction and reducing customer churn.

Explaining The Current Account Switch Service

The “Current Account Switch Service” provides customers with a method to combat lopsided relationships and aims to increase competition, support the entry of new banks and give customers a broader range of options. It improves the previous 18-30 day account turnover rate to a hassle-free seven days. The account transfer is streamlined through the new bank, so customers do not have to talk to various groups.

In the past, bank customers were notoriously reluctant to switch accounts due to the perceived difficulties involved, and they felt like the competition was no different. Thus, banks had no incentive to improve their customer experience.

What This Means For Customers

With customer retention now on the rocks, banks must shift the focus of their business towards customer needs, placing an emphasis on CEM. Financial institutions should continuously monitor their customers – once a month is no longer sufficient. If customers are switching banks, then service is a critical area of concern. Banks need to focus on keeping their existing customers by improving customer service rather than driving new marketing campaigns to attract new business. In fact, research by YouGov, suggests that consumer switching between retail banks will reach record highs, increasing by two to three percent.

The introduction of the “Current Account Switch Service” is an opportunity for financial institutions to assess their customer retention and take on a more customer-centric approach to their business, which can be accomplished through a CEM program.

What Financial Institutions Can Do

It is imperative that banks reconsider their approach to customer service, starting with their employees. Therefore, it is in every financial institution’s best interest to invest in a quality CEM program. Without one, these institutions will not be able to accurately gauge their customers’ satisfaction levels and face the possibility of losing customers to other banks with better reputations. Financial institutions will now, more than ever, need to differentiate their offerings from the competition and give themselves the competitive advantage of an improved customer experience.

This was posted in Bdaily's Members' News section by Syed Hasan .