CHARLENE STERN
‘Personal attention’ key
While the issue of customer service levels at larger banks has long been a topic of discussion, a recent survey conducted by a national consulting firm suggests big banks are spending more time and money on technology updates at the expense of consumer-focused spending.
According to Charlene Stern, senior vice president of NewGround, a Chicago-based design, build and branding firm for financial institutions and banks, big banks are losing sight of their core focus – the consumer. That a large financial institution might be a bit impersonal or slight the individual customer in favor of large business accounts are longstanding criticisms, but the purported focus on technology over customer service adds a new twist on an old theme and raises the question: Do bank customers prefer personal service or the speed and efficiency that improved technology can provide?
Stern said budgets overall are tight at the nation’s largest banks, while technology upgrades are taking up a greater share of the money that is allocated to operating expenses. It is a trend that Stern, author of the consumer survey, which was conducted in California, said is detrimental to loyal customers, who are “punished” when banks replace customer representatives with unfamiliar and complicated technology.
But larger banks are flourishing in the customer satisfaction department, according to officials of Fleet Bank, a Boston-based institution that is the seventh-largest bank in the country and no stranger to the customer service criticisms that plague nearly any large business. Banks, Fleet officials say, are simply growing and changing with the times – and with the changing needs of consumers.
“There is a fundamental fallacy to this survey – [that] because banks are focusing on technology, we must not be focusing on our consumers,” said Jim Schepker, a spokesman for Fleet Bank’s retail and commercial divisions. “The consumer segment is being extraordinarily well served, and that is mainly because of heightened competition in the industry.”
However, Stern said that while upgrading technology to increase efficiency and cut costs across the board, many banks have lost their “personal touch” approach to customer service.
Stern said consumers perceive their bank only as a “blinking cash machine or a faceless Web site, which is good in the sense of convenience but bad in the sense of personal connection.”
“Technology is great for customers on some levels, but loyalty is not built on convenience alone,” said Stern. “The more profitable customer relationship is one built on personal attention and in-branch service, an approach that takes advantage of every opportunity to extend the brand to the customer.”
No Easy Answers
But some industry watchers question that thesis, saying technology is providing customer service by offering innovative and unlimited access to a client’s accounts.
“A lot of the technology that banks are spending money on improves customer service,” said Wil Sheehan, senior vice president of Clark/Bardes Consulting-Banking Practice in Duxbury, which focuses on banks and financial institutions. “That is valuable.”
According to Schepker, Fleet has experienced a 10 percent growth in core deposit accounts and within the past year, the bank has found that their cross-sell ratio is up from 2.7 products per household in 2000 to 3.6 Fleet products in households at the end if 2002.
But Stern said big banks are only looking at the bottom-line dollar when it comes to customer service.
“It is about growing the meaning of who you are in the lives of financial customers, and that comes through growing the brand and place of interaction and transforming the culture of the people who deliver the product from burger flippers to real customer-centric and effective experience providers,” said Stern. “Something should happen when [a client] walks into a branch bank – it should bring [the client] back for more.”
Today at Fleet, Schepker said the exact opposite is true and employees are being constantly being introduced and educated to the latest products and services.
“As banking becomes more complex, we need more knowledgeable people at the front desk and the skill set of branch staff is increasing dramatically,” said Schepker. “We are training business specialists to train in our branches … we reflect national trends and people are being more sophisticated in their skill sets. The assessment [that large-bank employees are not customer-centric] is exactly the opposite of what the reality of the situation is.”
Sheehan said that, in general, banks are spending “quite a bit more on customer service.” Additional training of staff, the development of a new “service and culture, and the introduction of new technology is very customer-service friendly,” he said.
Additionally, Stern said the recent NewGround survey found a lack of brand loyalty within banks.
Large banks have “reduced the customer to a plastic debit card,” Stern said, adding that she believes such banks have focused more on technology in the belief it would lower overhead costs and eliminate the need for branches.
“There is no easy solution … It is about building the brand experience,” said Stern. “The real business is in bringing back the experience so that the customer wants to come back to the branch.”
While Stern said community banks have not lost their personal touch, “customers today are habitually loyal to the big banks that are excessively overcharging – but it’s emotional. If it were all about price, we would be buying everything at flea markets.”
But to bankers, consumers today have access to a variety of different products based on their needs and satisfaction rates are higher than ever before.
“We look at customer favorably scores and that’s been improving at Fleet. We are looking at world-class standards of 80 percent favorable approval from our customers,” said Schepker. “There are many things to indicate that consumers are very happy.”
Melanie Nayer may be reached at mnayer@thewarrengroup.com.
