Improving Customer Satisfaction in Banks - Book Report/Review Example

Improving customer satisfaction in banks Background Banks are financial institutions that offer a wide range of financial services. The services include saving and lending money. By providing the check and credit cards, the banks enable their clients to pay for goods and services without necessarily having to carry cash around. Modern banks also offer financial advice-advising clients on how to invest their money and business management advices. In addition, with special type of accounts, the clients are able to buy and sell shares in stock markets. Today, banks are under immense pressure to improve the quality of their services while reducing their operational costs in order to remain competitive. This is crucial in the current markets, where products and price of services do not assure banks a competitive advantage (Belasco, 2013). This is the reason why, improving the quality of service is key to their survival. Introduction Traditionally, retail banks have use branches, ATMs, and call center mobiles to interact with their customers. Branches have always played a key role and remain pivotal as banking channel. However, in the last few decades, direct channels such as mobile banking, online banking, and other web-based activities have become more popular (Perkins 120). This is partly because of the evolving tastes and preferences of the customers coupled by the un-ending technological advancements witnessed over the last couple of decades. In addition, the trend is a result of immense promotions by banks to encourage their customers to use this channel to carrying out their transactions. Another important trend to note is that the distribution of banking services is becoming channel- dependent due to the emergency of innovative technologies such as interactive multimedia screen, and multi utility ATMs. These tools help the banks to deliver service to customers through multiple channels and touch points. The distribution channel plays are instrumental in delivering and enhance the customer experiences. This is because the banks customer interaction begins and ends with the channel. The recent data indicate that the number of transactions done on branches have reduced significantly. In fact, in some regions like South America where mobile banking has gained popularity, some of the bank’s branches have been pared down to thin units with scope limited to activities that involve customer interaction. Branch banking is still one of the popular ways of conducting banking transaction in many parts of the world. There are a number of reasons as why branch banking is still a popular channel among the customers. One of the main reasons is that it offers personal interaction with the customers. The second reason is that branches still have wider capabilities of services that can be offered as compared to other channels. In addition, the presence of financial advisors attracts customers who need to carry out complex transactions (Lewis 200). Another factor that explains the trend is, most customer still identify themselves with their branches and employees who work there. As one among many banking channels, branches play key roles in customer service. The quality of service is an integral part of customer satisfaction. Data from research has found that poor customer service is the number one cause of loss of customers. For this reason, banks have no option other than improve branch customer service in order to retain their customers and attract more. Customers are the lifeblood of banks, thus banks must stay focused on delivering the best customer service possible. This means empowering employees at retail banking branches for them to perform their duties efficiently and effectively. According to Lewis (209), the level of service provided at branches and the satisfaction derived is highly dependent on the banks’ employees. Unfortunately, today’s front and back office bank employees spend valuable amount of their time managing and gaining access to the bank systems an application that runs banking business. This limits them from being focused on their core duties- provide service to customers. This paper offers solutions to this problem. The solution provided aims to ensure the right resource are provided to the right people. With this solution, retail banks will be able to improve employee productivity, customer satisfaction and most importantly the revenues. The paper also highlights certain trends in banking and the various options that banks can use to improve customer satisfaction. Improve the quality of service In the modern world, the bank’s customers are increasingly expecting more conveniences, personalization, accessibility, and reliability across the distribution channels. To remain competitive, banks need to deliver these features by leveraging innovative technologies and solutions that will personalize their client- banking experience. In addition, they need to improve the quality of their services by investing more on the channel networks in order to make them more customers centered. At the same time, they need to increase their efficiencies to reduce costs and increase their profitability. Lewis 69 states that for banks to retain their customers and attract more, they should endeavor to offer high quality services that satisfy their customer needs. This can be achieved through the following initiatives: Empowering the employees: As mentioned earlier, the employees play an important part in ensuring customer satisfaction. For this reason, it is important that banks empower them, so that they focus on the banks strategic role- provision of financial service to customers. Banks should make it easier for their employee to perform their tasks of serving the customers. This will foster customer loyalties and increase an opportunity for them to sell additional products and services. The employee requires a robust infrastructure that guarantees that the right people have the right information. This helps to foster employee-productivity as well as safeguard valuable information assert while freeing front office employee to focus on strategic activities that ensure customer satisfaction and higher revenues. Improve the employees’ productivity and reduce operational cost by automation of the system: A number of processes inefficiency such as time-consuming users’ provision, manual data gathering, and reporting for compliance lead to high operational costs. For instance, most bank employees struggle to remember their users’ passwords for various applications they need to execute their job. As a result, they increasingly call the help desk to have their passwords reset. This is not only an inconvenience to the help desk employee but also costly in terms of associated calls. Automating and improving the process and the system will help the desk calls, which in turn help them to focus on serving customers instead of being occupied by issues related to system assess and regulatory compliance. Automation also helps to fasten customer service delivery. It is imperative that the slower customer service reduces revenue. Take for instance, a front desk employee who is selling a product or service to a customer and he/she is having difficulties remembering his/her password. As they take a time-consuming step to have their password reset, the customer may get impatient and leave, that is an opportunity lost. In addition, a situation like this negatively affects the customer perception about the bank. This reduces possibility of conducting any business with them in future. Krane (28) states that solid and secure infrastructures are key to ensuring the bank agility and streamlining processes to enhance competitive advantage. Simplification of bank operation: banks have become overly complicated. Over the years, many banks have rapidly grown through acquisition without properly integrating their new products, processes, and systems. In addition, most of the banks have made substantial investments in alternative channels without increasing the value of branch networks. This has resulted to complicated organization. The complication has led to varying levels of customer service and inefficiencies. The simplification and focusing on those activities that add value can help bank cut costs, improve service and enhance customer relations (Belasco 150). Other initiatives that will help to improve the quality of service include: Creating customer loyalty: When customers are dissatisfied with the bank’s services, they shift to other banks. Losing customer is losing revenue, similarly, when customers are satisfied with services, they stay loyal to the bank. Over time, loyal customers turn to advocates by recommending the banks to other people. It is important to note that, banks can win the customers’ loyalty through providing high-quality services. Alternatively, banks can win customer loyalties through rewarding customers for any referrals they make. Reliability is an integral part of high quality service. Banks should endeavor to provide high quality services to their customers all the time. By doing so, customers will gain confidence with them and are most likely stay. It is also important for banks to treat their customer equally. While it is important for bank to show appreciation to customer with high net worth by providing privileges and offering personalized services, it is important to ensure that this do not occur at the expense of the regular customers. At a minimum, banks should provide high quality service to all customers (Lidstone 135). It is also important for bank to respond to customer complaints. Banks should make a deliberate attempt to collect the customer’s feedback, analyze them, respond, and make necessary improvements. Responding to customer complaints and feedback makes them feel valued and thus the increased likelihood of them to remain royal. To satisfy the customers even more, banks should also address a number of infrastructure constraints. First, banks should ensure there is adequate parking space for their customers, banking hall should spacious to reduce congestion also sitting arrangement in the banking hall should be orderly. In addition, It is also important that banks are equipped with hard ware support systems such generator to ensure that services are not disrupted. When these solutions are applied, banks have a significant opportunity to improve their customer service and efficiency as well as to reduce costs and increase their profitability. Conclusion Today, banks are under immense pressure to improve the quality of their service while reducing their operational cost, for them to remain competitive in highly volatile markets. In a market where customers are increasingly expecting more conveniences, personalization, accessibility, and reliability across the distribution channels, banks need to deliver these features by leveraging innovative technologies and solution that will personalize their client banking experience. However, through solution such as automation of system, simplification of their operation, empowering employee and other mentioned above, they have a significant opportunity to improve their customer service and efficiency as well as to reduce costs and increase their profitability. Works Cited Belasco, Watson. “The Managers Guide to implementing Change. New York, NY: Plume. 2013. Krane, Jim. " Enabling Retail Banks to Improve Customer Service, Security and Compliance." Associated Press: 2008. Lewis, Bernard. " Increased Online Market Presence Using Advanced Technology Platforms Such As Web 2.0 and Social Networks”. Harvard Business Review: 2009. Lidstone Digby. " Emerging Trends in Retail Banking Channels: Improving Client Service and Channel Operating” CostsAssociated Press: March 30, 2005. Perkins John . “iimproving Performance by Reducing Complexity”. New York, NY: Plume. 2013. Read More