Stock - Bank / Banking
There is still a long way to go for the banks to catch up with other service industries. Image Credit: Shutterstock

When was the last time you received exceptional service from your bank? Something that made you go ‘Wow!’.

Last week? Last month? Last year? If you can’t remember, don’t try.

The banking industry, either in UAE or globally, is not exactly known for exceptional service levels. The Net Promoter Score or NPS, the barometer of the customer’s willingness to recommend a provider, ranges from as high as 97 for Tesla and 77 for Starbucks to as low as 27 for Santander and 18 for Bank of America. The average NPS for banks globally is in the 30’s.

The good news is that banks in the UAE fare slightly better - hitting the 40’s. The bad news is that there is still a long way to go to catch up with other service industries like hospitality and healthcare.

Challenges for banks

Why are banks traditionally poor in service quality? The reasons are many. The first is legacy technology that hobbles most banks. Second is siloed data – despite all the KYC forms banks make you fill, the data is hardly used effectively where it matters.

Stock - Bank / Banking
Third is lack of empowerment at the frontline. A typical branch manager today, unlike in yesteryears, cannot approve a personal loan or refund a service charge since all authorities are typically centralised.

Fourth is misalignment of incentives – most bank staff are incentivised for sales, not good service. And finally cost pressures have made banks reduce staff at branches and call centres, forcing customers to navigate automated voice-based systems that can often be frustratingly unintelligent.

The pressure of compliance to increasingly complex local and international regulations has added to the pressure on banks who have to ask you many more questions today on your transactions than a decade ago. This slows down turnaround times, and makes life more difficult for customers.

Re-imagining service

What is the way forward? Banks have to reimagine all customer journeys end-to-end, from an outside-in perspective. They have to make more effective use of the tomes of data they already possess on each of their customers, obviating the need to ask repetitive questions at every stage of a journey.

In the digital age, it is a shame that many banks ask customers to sign and initial a dozen times on paper forms. Or put you on hold for 30 minutes when you contact the call centre with a query. Or take weeks to resolve a complaint.

Banks need to provide service guarantees, the same way Ritz-Carlton does. For example, if a loan doesn’t get approved in 24 hours, the processing fees should be waived. Complex products must mandatorily have free look-in periods.

Zappos allows unworn shoes to be returned within 365 days, whereas most banks won’t allow you to change your mind on a loan even 7 days after signing up.

The most significant transition banks have to make is from reactive to proactive servicing of customers. Why is it that Starbucks, via their app, manages to prepare your favourite coffee even before you arrive at their store whereas your bank treats you like a new customer every time you visit a new branch?

If your debit card is swallowed at an ATM at your neighbourhood mall, your bank should know about it before you call to report it, and should proactively send you a replacement card. Given the extensive use of big data by banks today, most servicing should be done via proactive outbound calling as opposed to customers calling banks to report issues.

Day of the customer

With commoditisation of financial products and the increasing competition from nimble fintechs providing faster service, banks have no choice but to invest in service quality, the only sustainable differentiator to retain customers. Banks in the UAE are rising to the challenge: investing in staff training, process transformation, new-age CRM systems and incentive programs that balance sales and service.

The regulator is playing its part too : the UAE Central Bank recently introduced consumer protection regulations that aim to improve customer service and complaints management. There will even be an independent ombudsman to report unresolved banking complaints.

The day of the customer is finally here. Maybe, just maybe, you will encounter exceptional service from your bank this coming week…