Banking on Feedback


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It is clear there are many forces at play when it comes to the economic problems we face, but most of the blame is being directed at the banks.

Prior to the banking crisis, Ireland had sound finances and a balanced budget, now we have a deficit exceeding 30% of GDP, and face draconian cuts in next week’s budget. These cuts will reduce GDP by more than 10% and impose grave hardships on citizens who neither profited from the bank industry nor were responsible for its behavior.

The damage to banking brands is beyond repair in some circumstances, yesterday for instance, Anglo Irish bank, the “enfant terrible” of Irish banking announced the ‘Anglo Irish’ brand, would cease to exist. The very damage it caused leading to its demise.

What now for the other banks? With a provision agreed for yet more recapitalisation, on the taxpayers’ coin, will they “open for business” again? The banks’ brand image, customer relations, (let’s not mention stock price or cash reserves) have hit at an all time low. Against a backdrop of austerity measures that are going to make life miserable for a large proportion of their customers, one can only guess what the strategy is for the future?

The extraordinary circumstances in which we find ourselves, means that performance metrics such as EPS, P/E ratio can be given less priority. The banks’ key objective is to start functioning as banks once more and begin to lend money again.

The regulator will no doubt now have a much more ‘hands on’ approach, for instance the standard a customer much reach before borrowing money will be higher. The regulator also indicated that banks were due to address the basis for compensation, but has come announced his dissatisfaction at the way some of the banks are handling this.

One area where banks will be have more of a free reign is in how they market themselves. It’s an interesting strategic dilemma that is now faced. To what extent will advertising and sponsorship now be curtailed, or will they be curtailed at all? What message should they send out now?

In addition, banks have a lot of work to do on customer relations. There are many ways that they set about doing this this. One way is to communicate a message through PR and through above the line marketing initiatives, there is no doubt that significant resources will be set aside for such purposes.

Having said that, there is a tremendous opportunity for a new departure in the face of adversity. We all know that listening is the best form of communication. The banks to grab the opportunity to address how they go about listening. Now more than ever before, the Voice of the Customer (VOC) needs to be heard, interpreted, analyzed and acted upon. Every touch-point must engineered to lead to a heightened customer experience.

Banks need to adopt a cohesive, Enterprise Wide approach to the management of customer experience. Listening is the most cost effective and best way reengage customers. There are many different areas where banks have interactions with customers, they need to be on top of each of these interactions.

To illustrate, let’s look to the mortgage application process, a report released last week, studying U.S. banks found that the practices most closely associated with high levels of satisfaction in the mortgage application process are as follows:

  • Proactive updates on the status of the loan
  • Providing a welcome acknowledgment after an application is submitted
  • Avoiding asking for the same information more than once
  • Closing on the promised date
  • Clearly explaining loan options and ensuring that the customer understands
  • Clearly explaining the entire process from application to approval

To reach levels where customers are happy on all touchpoints, the banks need to know what’s important to customers in each area, and for this they need a process where they can continually measure and monitor the customer experience at each touchpoint, to ensure that they are progressing.

I wonder if the banks are now managing customer experience effectively? Customers don’t differentiate a brand by function; they look upon it as a whole, so to have a non holistic approach to managing customer relationships frankly doesn’t make sense.

Customer experience is more important to these institutions than it has ever been. Feedback from customers and employees must the foundation upon which critical business decisions are made.

It is time, therefore, to introduce a fully cohesive customer experience strategy. The motivation for this should not only be that it makes business sense, but also because in a reversal of fortune, the banks now owe it to their customers.

Republished with author's permission from original post.

David Heneghan
David founded CX Index to help businesses leverage feedback to make more profitable decisions. Through our software platfrom we conduct sophisticated data analysis to help businesses drive more porfitable customer centric decisions. @cxindex


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