Customer experience on show

Nine years ago, when the editor of this journal worked in a customer service centre for a big four UK bank, it wasn’t uncommon to receive customer calls routed through from colleagues. The catch being that the colleagues were playing ‘extension bingo’ and had randomly dialed four digits to transfer the call on. As you can imagine, the customers on the end of the phone were not always impressed.

It can only be hoped that those days are now gone. Certainly there seems to be a new industry focus on developing a better customer experience. After all, when you are selling what are commodity products to demanding customers, one of the few ways to truly differentiate is through how you make the customer feel.

And part of what is really pushing bank’s forward in this space is the range and dissemination of new ratings on performance – these days it seems like every Tom, Dick and Harry has got something to say on your bank’s service offer. There have always been ratings of bank’s performance – in the UK for example, Which?, the consumer organisation, has for years published customer satisfaction scores to its readers – but the ubiquity of the internet means these ratings are now available to the public in a way that they haven’t been before.

New scrutiny

Of course, the odd disgruntled customer on a blog no one is likely to read might be the least of your worries. However, there is a new generation of professional monitoring services that smart banks (and smart CEOs for that matter) are beginning to sit up and take notice of.

For example Javelin Strategy and Research, based in California, has been rating US banks on a range of metrics such as payments, customer service and risk and fraud. Using quantitative research and statistical methodologies it gives bank’s comparative ratings out of 100 – so it is easy for both your board, and your customers to see how your performance matches up.

For example it recently rated the national US banks for their performance around fraud prevention, detection and resolution. It’s a good guess that executives at Bank of America were pleased with a score of 78, though those who scored below the average score of 53 now know they’ve got serious work to do.

Another interesting US company is Gomez, which provides companies with unbiased monitoring of their website’s performance and monitoring. One of its services is to provide competitor benchmark data, so you can compare whether your site comes up to scratch.

Versions of this benchmarked data are again publicly available – and its easy to establish that Wells Fargo in the States needs to do some work on its website’s availability; its 92.7 percent rating is six percent below the industry average. And these aren’t just abstract statistics – it’s not hard to imagine how customers frustrated about accessing their accounts might wander off to a competitor.

One of the most powerful ratings of a bank’s performance is its efficiency ratio. This comparison of expense versus revenue, with interest expense and revenues removed, gives a very good measurement of the efficiency of people, brick and mortar, and technology expenses.

While bank’s efficiency ratios have always been available in the annual accounts, it’s unlikely that anyone internally would have got hold of your competitors annual reports and calculated out a benchmarked comparison ­– but with the growth of sites like Google and Yahoo Finance, or Motley Fool this information is now just a few mouse clicks away to anyone who cares to look.

Implications

It is unlikely that your customers will be cruising on Motley Fool to check out different bank’s efficiency ratios of course. So what, if anything, does this information mean? The first thing to note is that while customers may not be taking notice, analysts, journalists and bloggers might be. And the more your institution lags in industry comparisons, the more the reputation of your brand will suffer.

And the other audience that might be taking a keen interest in these benchmarks is the C-level executive team and board at your own institution. And it is unlikely to be a comfortable seat when the technology team is asked to explain why key customer metrics are lagging behind competitors.

But there is a more fundamental reason why these ratings matter. If your bank is lagging in the metrics then it is a good guess that your customers aren’t feeling great about banking with you. This doesn’t mean they are about to leave immediately, but when you think about the lost cross-sell opportunities, the lost recommendations to friends, and just the lost goodwill, you can see why it’s essential that your technology and processes are driving the customer experience forward at all times.

This is certainly the view of Mark Bubar, VP Financial Services Sales from CA. “The issue of the day is actually coming back towards the common sense of actually making money,” he argues. “We believe the differentiating factor is something to do with customer experience and your ability to understand the issues of the customer and articulate answers.”

And what does this mean for technologists within the financial services? “As we see it, the big challenge is for banks to simplify, unify and manage their enterprise IT systems in a process that will move them to a customer centric architecture,” he suggests.

“In most cases financial institutions have multiple silos of legacy systems from the past – either they’ve grown through acquisition, or frankly they have just developed that way. And many times, despite what some customers might think, these silos are not connected,” he continues.

To deal with this CA has developed a philosophy of ‘Enterprise IT Management’. It has identified what it sees as the eight dimensions of customer centricity for banks (see sidebar), and offers a wrap around architecture that deals with each point while linking up previous disparate systems. “The essence of this philosophy is that it shows a way to link these silos and manage, secure and govern them at the same time,” Bubar explains. “And that’s what we mean by architecturing for customer-centricity.”