A recent J.D. Power study showed that 46 percent of bank customers thought better of their bank after experiencing an instance of fraud. Experts say good customer service helps. iStock illustration
If banks want customers to view them favorably, how instances of fraud are handled is crucial.
A recent J.D. Power study showed that 46 percent of bank customers say they have a more positive impression of their bank after experiencing an instance of fraud. Ninety-two percent of bank customers also say they are likely to reuse their bank after experiencing a fraud issue and having it resolved.
The company’s research shows that even when bad events occur, a good resolution process can result in higher satisfaction ratings than if the event had never occurred, said Jennifer White senior director of banking and payment intelligence at J.D. Power.
Bank customers often blame the fraudster and themselves before blaming their financial institution, she added.
Despite that, banks have a delicate balancing act between providing quality customer service and protecting their bottom line.
‘A Tight Balancing Act’
Financial institutions have to follow regulatory requirements when dealing with instances of fraud, said Scott Kwarta, chief risk and operating officer at The Cooperative Bank of Cape Cod, that bind them to certain timelines and procedures.
Still, there is an opportunity to provide customer service and help customers out during what can be a stressful and impactful financial event.
The Hyannis-based bank helps to relieve some of this stress by offering a provisional credit, Kwarta said. This gives the customer some confidence while the bank researches whether a customer didn’t fully understand the transaction they made or if a case of fraud has occurred.
Marianela Vazquez, chief operating officer at Reading Cooperative Bank, said that when fraud hits, banks have a chance to impact a customer’s outlook on their financial institution – for the better or for the worse.
It is important that employees and customers understand the regulations and that the bank moves as quickly and efficiently as possible to satisfy customer needs and banking regulations, she said.
“It’s a very tight balancing act in terms of, you know, hitting all the deadlines, moving things along correctly, and keeping the customer up-to-date, informed and making sure they’re getting their needs are getting met as well,” she said.
A lot of times, banks can end up taking a loss so it is important to be proactive and educate customers, Kwarta said, before an instance of fraud takes place.
“We really try to manage that by educating our customers,” he said. “We have various processes and systems in place to try and help to identify fraud so we can be proactive with it, and then where we need to take the loss.”
Sam Minton
Digital and Physical Customer Service
Whether it be how an instance of fraud is handled or simply a general conversation with a bank employee, customer service is growing ever more important for financial institutions. As the world in general grows more digital, customers are not just looking for quality customer service in a physical setting or over the phone – live chats on websites and emails matter, too.
“Even as we engage with customers, there’s steps right now when you come and start working with us that we have already started to visibly show you that we’re taking care of your identity,” Cambridge Savings Bank Chief Operating Officer Kevin McGuire said. “We’re actually showing you we want to do business with you. We want you to be able to have the least friction as possible.”
At Reading Co-Op, the bank aims to have knowledgeable staff available over the phone, and not just in branches, can help banks provide quality service across digital and physical channels.
“We are proactively looking, we’ve got a number of different tools in place to help identify, and flag transactions that could be suspicious,” Vazquez said. “We’re proactively reaching out to our customers and making sure that they know that we’re working to protect them.”
