The launch last month of the UK Current Account Switch Service, has once again brought to the surface the increasing pressure on banks and other financial institutions, to step-up their levels of customer service if they are to retain and attract new customers.
The new legislation, which now allows customers to switch their bank accounts quicker and easier – over a seven-day period – will result in banks having to compete harder for their customers.
With the Payments Council reporting that 35,000 had switched their banks during the first week of this new system – which launched on 16th September, further reports suggest that up to 5 million of the 49 million bank account customers in the UK, will be expected to switch this year.
Historically, many customers have been reluctant to move their bank accounts, with the Independent Commission on Banking, reporting that the average UK bank customer only changes their current accounts once every 26 years. This is despite poor levels of customer service and satisfaction, with recent research from SAS showing that 57% of UK current account holders either agree or strongly agree that the UK’s banks are failing to improve customer service.
However, with the new system removing many barriers and radically reducing the average switch time – from around one month to one week – the era of high consumer inertia levels looks set to change, as the dominant five banking groups, Lloyds TSB Banking Group, RBS Group, Barclays, HSBC and Santander, now face increased competition.
So how can banks and other financial institutions differentiate themselves?
According to a report by Capgemini, the top 5 reasons customers switch banks are:
- 53% – service quality
- 50% – fees
- 49% – interest rates
- 49% – ease of use
- 44% – quality of advice
With financial institutions finding it an increasing challenge to differentiate their products and services from their rivals, providing a seamless, consistent, cross-channel customer service, can be a key differentiator.
When did you last visit your high street bank? The majority of consumers now use online banking to manage their accounts, transfer money and pay bills – using a growing number of channels. Mobile as a channel for banking is growing exponentially, with figures by Juniper Research showing that more than a billion people are expected to use their mobile phones for banking services worldwide by the end of 2017, against just over 590 million in 2013.
Today’s customers don’t just want to be able to bank online, they expect to be able to find answers to their questions – instantly – across whichever channel suits them, and demand is 24/7, not just 9-5pm. Where previously a customer may have tolerated being held in a contact centre queue for minutes at a time, or waited tirelessly for a response to an e-mail enquiry, they now expect a quick, efficient and consistent customer service across multiple touch-points.
As consumers start to question their passive loyalty to their banks, with greater transparency, choice, and ease of switching available – improving the customer experience across all channels, from the web, mobile, e-mail, social platforms and within the contact centre, will be a key driver in helping all financial institutions attract and retain customers.
Find out here how Synthetix are helping leading financial institutions to provide a consistent multi-channel customer service.
