By Linna Zheng, 3B CFM
The needs of banking customers are evolving dynamically, and banks are doing their best to catch up and put those customer needs at the centre of their business. In this article, I will walk you through some of the major research and learnings in bank customer satisfaction so you can start to understand the banks’ priorities, whether you are inspired by the challenges of running a bank, what kind of customer you would like to serve if you work for a bank, and how you would like to serve them.
In 2014, Ernst & Young surveyed banking customers and broke them down into 8 segments based on their behavior, beliefs and economic status. They also have an interactive demographics/segments tool that you can use to break down customers globally and by country.
The 2016 Canadian Retail Banking Satisfaction Study done by J. D. Powers measures customer satisfaction in
3. Personal service
6. Financial advisor, and
7. Problem resolution
They found that
- Proactively reaching out to customers to notify them of product and service benefits and provide guidance on financial goals boosts overall customer satisfaction.
- Preventing problems is critical to customer satisfaction. Problems happen more frequently with customers who have >$10k.
- Problem resolution can salvage satisfaction. Solving a problem increases satisfaction by 89 points, but resolving a problem on the first contact, on the same day and without transferring the customer improves satisfaction by 190 points.
The study ranks the customer satisfaction of the big 5 banks and midsized banks on a 1000-point scale as follows:
Banks need to build trust with their customers so they are ‘not just another bank’. EY recommends that each bank transforms their front line’s ability to provide unbiased, high-quality advice, eliminate errors and shorten timelines in their operations, and be completely transparent about their product pricing and features.
Banks are also unable to deliver the services customers expect because they are disconnected from what their customers prefer and how they behave. EY recommends that banks segment their customers into smaller groups and personalize their services with more focus.
Banks need to rethink how they distribute their services and engage their customers, and start innovating their customer experience. EY recommends that banks rethink their branch closure plans and the future role of their branches, align all channel decisions with deep data analysis, simplify their product portfolios, features and pricing, and design future end-to-end customer journeys across multiple channels.
Accenture’s research adds more insights on engaging customers in year 2020. Here are some of their more eye-opening calls-to-action:
- 80% of customers would not have switched their providers had issues been resolved firsthand.
- Digital channels have increased overall interactions with banks. 10/17 of customers’ monthly bank interactions are through their mobile device.
- Most customers who participate in loyalty programs do it to gain access to the “best deals” and do not necessarily stay for the long run.
- Compelling offers can win back customers: customers generally have little hassle with switching.
- Almost half of customers would likely bank with a non-traditional bank competitor that they are currently doing business with, if that competitor were to offer the service.
As Accenture mentions on the last page of their report, simply being more digital will not give banks the differentiation they need to capture the
attention of, retain and best serve today’s digital customers, like an ‘Everyday Bank’ would. The following graphic shows how multidimensional an ‘Everyday Bank’ would be, and around 1/3 of banks are considering this new service model:
What do all of these learnings tell you about yourself? Personally, I would like to work for a bank that is good at satisfying its customers since that would affect the amount of impact in the work I do. I am curious to find out how RBC and Tangerine satisfy their customers, and I am excited to be heading to TD IT risk management in my next co-op term as TD is #2 in customer satisfaction out of the big 5 banks. As a CFM student headed into the IT world of banks, my role would be to 1) increase the speed of a bank’s services and/or 2) prevent the customer and other employees from experiencing any problems or downtimes and as a result, improve the reliability and trustworthiness of the bank so it can keep its customers coming back. Since I am interested in personal finance as well, and the banks are considering keeping their branches, I might give the front-end financial advisor role a try too.
Want to share what you think about banking and what your next steps are? Leave a comment below!