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In 2014, Time Magazine wrote that the banking industry needs a critical customer service makeover. In addition to internet service providers and mobile telephone service providers, banks were rated rock bottom when it comes to service. It’s a surprise that Time never compared these industries to government and other utility services as they might have found some even worse examples, but considering the growth and innovation that has taken place in banking since 2014, should we still rate banks as one of the worst industries for customer experience?
I noticed an article in Forbes from 2016 where CX writer Blake Morgan tried to explore this question, but most of her comments appear to be very US-specific. British customers can easily travel around the country with their bank cards continuing to work, unlike Americans who can travel to a new state and find their cards are blocked by anti-fraud measures.
Similarly, I don’t really know of anyone still using cheques in the UK. Not a single UK supermarket or major department store accepts cheques any longer. Transfers from one bank to another may require charges if they are international, but I don’t believe there are any local charges to transfer cash or make a payment.
The big change in the past three years has really been the development of the fintechs as an alternative to traditional banks. Why would I go to the bank that holds my current account for a loan to buy a car or take a holiday when an app can offer me an immediate decision and immediate transfer of the cash, all because the app can judge risk based on my social network activity?
Similarly, foreign workers in the UK that regularly send money home to their family have found that there are many new providers offering money transfer services and they are all cheaper and easier than asking their bank to help.
Fintechs are picking off these retail services one by one and focusing on how to make the customer experience better and cheaper. By designing new services that are customer-centric from day one, these new financial service operators are threatening the dominance of banks – unless they wake up and buy some of these innovative service providers.
But a very recent story about ATM fraud highlighted to me a deeper problem – security and the protection of customer information. Police in London have issued a warning to customers that many ATMs are fitted with cameras by fraudsters who want to record the PIN used by customer.
The banks should be ensuring that customer privacy is one of their most important priorities, so no customer has to face the inconvenience and embarrassment of finding their account has been emptied illegally. I saw a Twitter discussion about this news story where one person responded with a photo of their local bank ATM in Brazil. Not only does it offer customer authentication by scanning your hand, it offers a two-stage password as an alternative. You remember one PIN and another is sent to your telephone to then enter on the ATM.
The technology is already out there and is being used in other markets. It would seem sensible for the UK banks to start adopting some of these ideas if they want to fight fraud and improve the customer experience in general: show they care before even more customers explore alternative service providers. This whitepaper explores how digital technology will reshape the UK banking customer experience.
What do you think about the approach to CX by major banks? Are they behind the curve or just too big to change quickly? Leave a comment below, or get in touch on LinkedIn and let me know.