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Banking Industry Gets a Wake-Up Call
A week after I heard about local bank IndyMac's abrupt closing, a few more regional banks in the southwest were shuttered by the FDIC for "shady" practices. And even with the big banks the stress of mergers, a weak dollar, and the subprime meltdown are causing lots of strain. What happened to financial services industry? It's quite obvious actually. Banks and other financial services, in many cases, lost site of what is truly important -- customers.
Most of the problems are the result of decisions that have a short-term, quick scheme focus, and goes against the idea of building long-term customer value. Iin today's issue of 1to1 Weekly, we spotlight a new report from Forrester Research shows that customers feel their banks do not act in their best interests. In fact, levels of "customer advocacy" rankings fell to their lowest levels since Forrester began the survey five years ago.
There are some financial elements that cannot be controlled by individual banks, that's true. But, customer centricity and a culture of customer trust are in a financial institution's complete control. This leads to stronger customer advocacy.
In her editor's note today, 1to1 Media Editor-in-Chief Ginger Conlon relays a story about how she recently visited Citibank to inquire about making a change to one of her accounts:
It became a hugely complicated experience. At a time when every company should be using customer centricity as the valuable retention and growth tool that it is, all-too-many financial services firm still operate on an internally focused basis.
It seems like a simple fix. But I'm sure there's more to it than that. Does anyone who works for a financial services company care to share their point of view? Are we consumers stuck with the "lesser of evils," instead of positive relationship and experience?
Or, who out there is an optimist? Do you have a great financial services experience to share? What can other companies learn from the ones doing it right?
I've spent my entire career in financial services, 7 years in a small community bank, 13 years with Mellon, 4 with PNC Bank and 7 with Federated Investors. I've never seen such a mess.
The culmination of inflated CEO salaries, incapable boards, greedy shareholders, and unbridled mergers & acquisitions activity has destroyed what was once a respected stable industry.
And you're correct, the firms still standing are missing their chance at some great marketing!
Mary,
This is a great story!
I had a similar experience with Price Pfister. I called to order a replacement part for the sprayer nozzle on my kitchen sink. Without any questions as to how or when it broke, they took my address and put one in the mail--no charge for the part or the shipping. I'm still in awe when I think about it.
My "bank" is a local credit union (First Source Credit Union, based in New Hartford, NY) that I LOVE!! Can you believe the manager and a few of the loan officers actually recognize me when I go into my local branch (which really isn't all that often in this day and age).
Let me tell you my previous bank history. I had a savings account with another local bank starting in grade school. At the Elementary school you could bring in loose change and the teacher would "put it" into your savings account. We had our own passbook, which showed the money growing. Great learning experience!! As I got older I naturally gravitated to that bank for my checking account, etc. I even kept that same savings account when I lived out of state for four years and reopened additional accounts when I moved back home. Years go by and I am increasingly getting annoyed with the new policies at the bank. One of the most annoying new policies occurred when I divorced...I had to close my joint checking account. On my joint account we had an overdraft protection that automatically transferred money from my savings to my checking, if by chance, the checking account was short. When I went to open my new checking account, the bank I had been doing business with for close to 40 years, refused to offer me the overdraft protection..."we don't offer that to anyone anymore". After several other annoyances, I finally got fed up and switched to First Source.
Now fast forward to this past week. I was looking at my account on-line and to my surprise I had calculated my transfer wrong by about $4.00. My savings account I use for daily expenses was out of money, therefore the bank paid the check that had cleared and charged my account $25.00 for this service. I dialed up First Source lickity-split and had the gentleman that answered the phone pull up my account. I barely got the explanation out of my mouth, when he said "oh I see what happened...I will take that $25.00 fee off...you will see that credited in about 30 seconds. He asked "Is there any other savings account you would like your checking account connected to so this does hot happen in the future?" I did not even know this was an option, so of course I signed up for that right away. He took care of that immediately, sent me a paper for the formalities in the mail the very next day. I was all set! I hung up the phone that day and said out loud to myself..."I LOVE THAT BANK!" And this is just one example of how they treat their customers.
The actual overdraft protection policy is...as long as you have money in your savings account, you receive 3 overdraft "waivers" per month...the bank will just transfer your money into your checking account and send you a notice in the mail that they have transferred money. Now in my case, my savings account did not have enough money in it...they pay the amount of the check..charge $25.00 (which I know for a fact is lower than what any other bank in this area charges) and send you a notice to put money in your checking account. This policy is much more lenient than other banks in our area...my previous bank obviously wanted to make $35.00 every time you made a mistake in your checking account and they did not care how much money was in your savings account!!
One of the newer policies offered by First Source is the ability to "deposit" checks/money orders/etc on-line. You go to the website, "deposit" the amount of the check into your account. Then sign the check and mail it to the bank. You do have to have a minimum amount in your checking and/or savings to have this offered as a benefit...(I don't qualify, but my son does). How convenient is that?
As a little back ground, I am by no means well off...I have a few savings accounts, a checking account and a home equity loan with this bank, but they have treated me like a millionaire since the very first day I walked in the door! I will say it again..I LOVE THIS BANK!
If you want to take business away from your competitors, build a great, caring customer service department and enable your customers to get an empowered human in less than 10 seconds. It seems that if the “bean counters” can’t measure the value of something, it isn’t worth funding. The only person I know at my suppliers (bank, phone co, credit card co.) is the customer service person, not the med- and upper level executives.
I had a problem with my Verizon internet. I discovered it at 7:30 on a Sunday morning (EDT). I had a 20 minute wait! I chose to leave my number for a callback. In 20 minutes I got a callback and had to wait 10 MORE minutes--on a Sunday morning!
Calling credit card companies is always fun! You have to give them your sixteen digit number 2-3 times and still wait forever.
Customer service is my passion. We had a record year. We distribute HVAC and energy management parts.
It's simple:
1. Answer the phone promptly
2. Find out what the customers' problem is
3. Tell him what will fix it, what it costs and when he'll get it.
4. He says OK. He gets it when you told him, it fixes the problem and the price was what you quoted. That's it! No rocket science. Just do what you promised when you promised.
Why is this concept so hard to grasp?
Steve,
You make several great points--especially about "customer-centric" versus "self-centric."
My visit to Citi was to change an account from joint ownership to one owner. To me it should be as easy as taking the other name/ss# off the account (I'm the primary account owner), but I'm guessing that, due to IT systems or regulations, to Citi it's likely a far more complicated scenario. Still, this is my main account that is the hub of everything I do with Citi. If I have to start from scratch with them, I could just as easy start from scratch with anyone (as could other customers in the same scenario); so it seems in Citi's best interest to find a way to simplify the process--unless regulations restrict it. I should have asked 'why' but didn't, as I've discovered that it doesn't matter why if you can't change "the policy." Perhaps the woman at the information desk might have offered the reason, so I'd be understanding instead of disgruntled. In this case I may be acting self-centric because I'm lacking the information to understand what Citi can and can't do.
I've been a Citi customers for about 20 or so years. It's online banking is excellent. It's systems seems disconnected in some cases, but no more than anyone elses. The staff in my local branch is always courteous and helpful. So will I stay with Citi? Most likely. But I'll be sure to complain to anyone who'll listen about how inconvenient and time consuming it was to create a new "central" account.
Before we tee off on the bankers, let's consider three elements.
1) Federal oversight -- The federal government regulates big banks differently than small banks. Citibank has so many levels of compliance that there is no reason not to expect having to jump through hoops.
2) Legacy computing -- Consider that Citibank is still running proprietary legacy softwae that is not as user friendly as others, but is fantastically sophisticated and accurate. To convert would be a gargantuan expense and require five times the computing power because of GUI. Indeed in is only in the last few months that Travelers insurance (div of Citibank) allowed for online payments. Prior to that they only accepted bank to bank electronic transfers -- a relic of the 60's.
3) A history of acquisitions -- Given the first two reasons, please consider if your bank was a recent acquisition of Citi and has adopted the arcane systems they use.
Even though Citi may want to be Tech savvy and customer frindly on the web, this is not the only was to be customer centric. Remember the good old days when we didn't have to do everything for ourselves. Remember when you had a real person to deal with rather than a keyboard. I suggest that you call Citibank and have a one to one, person to person conversation with their agents. You will find the 'real' experience that you are asking Citi to recreate for your virtual world. It may just be that what has come to be known as 'customer centric' (what they want, when they want it) is really 'self-centric' (what I want when I want it in the way that I want it and if I don't get my way...). And that is not the company's fault.
I had a similar experience [to Ginger's] with Citibank, when I switched from paper to paperless statements. There was always extra money going out of the account. Since switching back to paper the problems have ended.
Roger-
One of our finalists for the Gartner-1to1 Awards is a bank in Spain. I recently spoke to an executive at the company about their customer experience, and offering video chat through their website.
Any customer can use the video chat, and many of their questions are routed directly to the local branch. A non-time sensitive issue such as the ones you were talking to would then be handled by the local banker you were most comfortable with. It seems simple, but banks in the US haven't quite caught on yet.
RegularGuy-
When I opened a savings account recently I thought the same thing...I'd have to go down to a branch and fill out endless forms and wait for approval. I went to my bank's website (Wachovia) to find out what information I'd need to bring with me, and was shocked to find that I could actually sign up for one online.
Within about 5 minutes I had confirmation, and a few minutes later I had an account number. The paperwork and deposit book came in the mail about 2 days later. I've had plenty of bad banking experiences, but that one gave me hope that the industry is improving.
My experience and frustration lately has been the centralizing of phone calls, and smart routing of certain transactions.
This is done with the intention to improve service (faster for routine activities), reduce costs and gets some economies of scale. I understand this, but as I have a relationship with my Personal Banker (and this is why I am so loyal) at my branch, I hate it when the system prevents me from getting to that person. Rarely is something a 'NOW' issue; thus, I prefer to have this individual take care of certain transactions and want that choice.
My firm does our best to always give the client access to their designated rep responsible for the relationship, but then blanace this with the perference of faster service by any available agent when needed.
....and a classic with my bank is that with direct deposit I get free banking, I get laid off and no no direct deposit so at a time when no-fees would help I start to get bank charges!
I've been with my bank for over 28 years and have checking, savings and loans with them, no issues other than miss calculating my balance once and taking a month or so to find the problem even with their help and only bouncing one $20 check before transferring money from my savings!
First of all, retail banking is a sorry mess. I can open an account with a financial services firm in a few minutes over the phone, but to open a bank savings account, I have to sit and sign an endless number of forms. The bank process can take 30-45 minutes, and that assumes the bank has automated their form printing.
And then there comes one of my all-time favorite CRM-related banking complaints.
I insert my debit card into a bank's ATM machine, and the FIRST question they ask is whether I want English or Spanish. Never mind the fact that I pressed 'English' the last 173 times I used their ATM, they must think I suddenly acquired a new language and can't wait to use it for a banking transaction. Imagine their disappointment when I choose English for that 174th transaction. I'll give them a hint that I know they'll ignore, but I plan to ask for English for all of my ATM transactions from now on.
Would it be THAT hard to train these intelligent ATMs about my language preference? My bank prides itself on the fact that it knows its customers, yet it forgets what language I speak every time I insert my card.