Mediocre = failure: Banks must do more to satisfy customers

Recent research indicates that banks have decent customer satisfaction rates when compared with other industries. Banks should be rethinking their approach to customer relationships in order to provide proactive attention instead of reactive care. Brian Moore dives into customer contact methods that could put your organization a step above the rest.
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According to a recent survey of 10,000 consumers, banks have decent rates of customer satisfaction when compared with other industries. Unfortunately, “decent” sounds an awful lot like “descent”, which is the glide path most banks will be on it they don’t take steps to improve how they are perceived by their customers.

Of the 16 banks included in the Temkin Group’s customer service survey of 235 companies, 12 scored at or above 50% — middling benchmark — in customer satisfaction. According to Bruce Temkin, group managing partner:

“Overall, banks were actually among the higher-performing industries in the survey. But most were still in the mediocre range for customer service.”

Many banks are focused on this problem, but may need to alter their thinking in order to solve it. U.S. Bank achieved the second highest satisfaction rate at 62%, and their executive vice president for 24 hour banking Jean Fichtel gives its front-line customer service staff much of the credit for improving first call resolution:

“When a customer makes the decision to call us, we want to make sure we have knowledgeable people ready to resolve the problem quickly. We’ve done a number of things from a process standpoint to empower our front-line folks to do that.”

Taking care of issues immediately will undoubtedly please more customers than giving them the runaround or excuses. The problem with this approach is that once a customer has a problem, their satisfaction has already taken a hit. To avoid this, banks must do more to prevent problems occurring in the first place.

One way to do this is through proactive outreach about an event in the customer’s relationship with the bank before it can cause them concern or harm. For example, notifying a customer that the balance in their checking account has fallen to a level that puts them at risk of an overdraft. Or alerts regarding suspicious credit card transactions and change of address requests that might indicate identity theft or account takeover attempts. A recent survey by Wakefield Research found that such notifications are welcomed and even expected by bank customers.

And if customers are involved in a multi-step process such as obtaining or refinancing a mortgage, proactively informing them of their status will ease anxiety and improve satisfaction. Providing regular updates on the process can also shorten cycle time for approval. If customer action is required, such as providing additional proof of income and assets, customers who have been conditioned to expect regular communication from their bank about the process are more likely to respond to such requests.

The payback on pro-activity is measurable. One top ten mortgage lender saw their satisfaction rates increase by over 10% after they began providing regular updates that kept borrowers informed of the status of their loan application.

And it’s not just customers who are interested in a proactive approach. Regulators also care.

In announcing an increased focus on the transfer of mortgages from one servicer to another, CFPB director Richard Cordray made it clear he expected servicers to be proactive in communicating with borrowers:

“Consumers should not be collateral damage in the mortgage servicing transfer process. CFPB examiners will look for what the new servicer is doing to provide consumers accurate information about their loans, such as the amount they owe, the status of their loss mitigation application or plan, and their delinquency status, if relevant.”

So if proactive communication helps keep customers and regulators satisfied, why aren’t more banks doing it?

Cost may be one factor, but with the availability of cloud-based platforms for automated customer communication, personalized notifications can be delivered to via text, email or interactive voice message for pennies or less.

Another concern is that making outbound attempts to contact customers will increase the number of inbound calls the contact center must handle, as some of the outreach will undoubtedly raise questions in the mind of some customers. That may be true, but a well-designed outreach campaign will also include multiple options for customers to self-serve in response. And while inbound calls may increase, instead of starting the conversation with “I am upset and I expect you to fix it” customers will be saying “Thank you for letting me know”.

That doesn’t sound mediocre to me.

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Brian Moore

About Brian Moore

Brian Moore, senior principal, financial services, at Nuance Outbound brings more than 25 years of experience in financial services, mortgage and collections operations and technology to the company. He is also our resident compliance expert, advising companies on how to comply with TCPA, CFPB, TSR and other customer communications compliance regulations.