Customer Satisfaction in Banking Business

A customer is the most important thing that a business can have. Customers are the ones who determine the destiny of the business as well as the success of the business. A customer-sensitive business makes deliberate measures to ensure that their customers’ needs are met. Best practice model of business management aim at ensuring that business processes surpass the expectations of the customer. The banking sector is one of the most competitive sectors in today’s business sector; it is among the highly regulated businesses in the world. There are various regulations that are set by the laws of a country and those by the international bodies. The success of the financial sector is the success of the entire country; since they are interdependent. They have not been spared by the global financial crisis and are the most hit. But even with the high regulation and its inevitable service, there is the need to uphold high customer satisfaction to effectively survive in the high competition. There are various ways that banks have adopted to ensure that they are competitive, they include.

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Customer Service Desk

The focus on the customer has forced the banks to have a customer centre that works as a call centre. In most cases they are toll free stations; however the need for confidentiality is still upheld before disclosing any information to the caller. This is a place that the customer can call at any one time and raise the queries that he or she has. This has assisted the banking customers to develop reliability on the particular bank’s services. After the query has been received, a solution is looked for in the nearest time possible. Immediately the problem has been solved, the customer is given response in the way that he had chosen during the interaction. These customer services have taken another shape in that the outlets that accept the visa / credit / debit cards, whichever the case have at least someone who is trained on handling some of the quarries that the customer puts across. They have some links to the banks that ensure that the query that is above their ability has been escalated to the bank without the customer being moved from one place to another. At the Automated terror Machines; which are guarded by security officers, the security officers are trained on some basic banking area that they can assist the customers. The policy here is that the customer should be assisted at the point of contact despite the place or the personality concerned. The machines are being made user friendly day by day, this includes the language that they adopt. They are made in such a way that a customer with the least knowledge of banking will interact with the machines easily.

M- Banking

The latest innovation is the mobile banking. This is a way that is aimed to assist those who own mobile phones. The customer can authorize certain transactions using the mobile phone. This has assisted the customers to enjoy the effectiveness that the banks are aiming at giving. The time and the costs spent in the banking halls are reduced. This has a two way benefit whereby the customer enjoys the automated services and saves time and the bank will require less and less human resources. This will reduce the cost of operations of the bank. Internet banking is another way that has been developed to enhance convenience in the sector. The use of websites to give information about the bank has also taken centre stage. This is more so to target the working class customers who have access to the internet and spend most of their time in the internet. One can transact business over the internet (ComScore, Inc.; Customer Experience Takes Centre Stage in Online Banking, pp. 1-4). The technology of M-Pesa that was developed in Kenya and now in the United Kingdom has seen many banks join hands with the mobile providers, Safaricom, to provide the service where by a client can deposit their account using the M-Pesa service. An example of this was Equity Bank, which engaged in a contract with the company on 31/ 06/2010. The mobile banking can even approve for soft loans (overdrafts) to the customer. It is banking at the convenience of the customer.

Packages

To reach all the customers (potential ones and maintain the existing ones), the banks are developing various packages that are aimed at the various categories of customers. The latest package is the group lending packages; they are targeted at reaching low earning people who do not have solid securities. Another name of this package is trust lending policy. This is a strategy that is targeting the unbanked population. The terms of loan payments have been adjusted; some of the loans have been given a longer time to make the payments more flexible and easier to the customer (Mahmood, p.20).

Banking Interaction and Collaborations

In the efforts to reduce costs and ensure that the customers are well served despite the location that they are in, various banks have come together and enable their machines to accept Visa Cards and A.T.M.s of other banks. This has assisted in ensuring that the customer can get access to his or her account in a place where the original bank is not there. This has led to improved customer satisfaction and loyalty.

Banking Hours

To ensure that the bank can handle all the customers, then they have decided to increase the working hours. The traditional 9 AM to 3 PM banking has taken another shape. More banks are operating during the night maybe up to nine in the evening and opening earlier. This is in the efforts of ensuring that they can cater for a more number of customers. Some banks on the other hand has started Sunday banking, one of those bank is Barclays bank where it took the decision to be able to serve those customers who have time on Sunday.

Internet Banking

As technology increases there is the increase in the use of internet. Banks have also aligned themselves in this effect and have enabled customer to transact with the bank using the internet. One can make payments, authorize or cancel orders through the internet. There are other international money transfers that are affected over the net. An example of this is Pay Pal services that they only require one’s email address and money can be transferred, under the consent of both parties. This has enabled an all over the clock banking. The aim here is to enable banking at the convenience of the customer. All these programs are user friendly and the customer can follow the link alone. In some bank, a customer can even apply for a loan over the internet. All the above methods are strategies that are aligned with the need of the customer in the effort of ensure that a certain bank is more competitive than the other. How well a bank understands the environment that it operates in makes the difference of the choice of strategies.

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The Value of ‘Getting It Right’

There are numerous advantages that the banks are likely to get when they give good services to their customers. It is through the good service that they can survive in the high competitive business. The following are the advantages of getting it right:

Customer Satisfaction

The customer always has some expectations that he has when he is engaging in business with the particular bank. The bank should ensure that they meet these expectations. This is through customer service. When the customers are satisfied, then they are likely to trade with the company again. This is how a business retains its customers. To attain this it means that the banks should deploy competent and well trained customer care officers in line with the improved business status. Other than the need for listening and communication skills, these officers should be able to handle the queries that the customers have. There is a management policy that “a satisfied customer tells another but unsatisfied one tells two”. This means that there is a high call for to satisfying all the customers’ needs. In the banking sector, fulfilling of all the customer needs is almost impossible, this is because of the nature of the business and the level of risk that it operates in; for example it is not hard to get a person who has neither a source of income nor security seeking a loan facility from the bank. This person should be declined the loan because the risk associated with the loan is high; but how do the bank officer communicate this to the customer, it should be in a way that he will not feel offended.

Customer Loyalty

One of the resultant of good customer service is customer loyalty; this is where by the customer feels that he has an obligation to trade with the bank and holds strong to the feeling. It ensures that the customer feels part and parcel of the bank. The customer becomes a repetitive customer of the bank. It builds the strong brand name that each business aims to have and is an assurance of a continuous flow of income from the business. The experience that the customer gets when trading with the particular bank will affect whether he will continue doing business with the bank or not, the past defines the future, and today affect tomorrow.

Less Costs Required To Attract Customers

It is more expensive to attract a new customer than to retain the existing one. Customer satisfaction will ensure that the customers are retained in the bank and thus the costs of recruiting new ones are spared. When there is a good customer experience as a result of customer satisfaction, the business becomes a self advertising entity. One customer will tell another about the experience and this will have a reduced marketing and advertising costs. The amount saved can be utilized in other ways to the benefit of the company. In most cases a loyal customer introduces another customer especially in the lending section; the already known customer is trusted by the bank that he can recommend some customers for a loan facility (Gitman, p.23).

Edge the Competitions

The level of customer satisfaction will determine how effective a business is going to be. In the case of a bank, there is a diverse population that the bank can have as others. A bank loses a customer to another and receives from another and from the unbanked; there is thus the need to make the services attractive enough to the outside environment. Competitors can only be out-done by doing something extra in terms of the service that the client get. There is a general misunderstanding that the cost of products is the only thing that determine the customer base of a business, as much as it may determine, customer satisfaction is more stronger, since however cheap one may be, without giving what the customer want is of no good (Johnson, Anders, Tor, Line and Jaesung, pp. 217-245).

Promotion of Customer Employee Relation

This is very important especially in the banking sector where the policy of Know your customer” is adhered to, when the customer and the employee understand each other, it is more easy to make decisions in the bank. Decisions like those of who to give a loan and who not to be better made if the employees understand the customers potential; this cannot be derived out of mere meeting in the office but prolonged relationship. This will reduce the risk in the business. Another advantage from this interaction is feedback and information. When there is a good relationship, the customer will give feedback to the bank and the bank can know the actions to take to remain competitive. The customer will tell the employees on the various feelings that the people have towards the bank. Finally, customers are sources of information about what has been implemented by the competitors; this is so because many of them are multi-bankers or have friends in other banks, the customer disclose this important information to the bank. In cases of loan, and there is a good customer employee relationship, the customer can give crucial information about another, this may be used though confidentially and sensitively to make decisions in the bank.

Increased Profits

The resultant of all the above is increased in the gains of the business. This is as a result of the increased business and the low operating cost that is brought about by the reduced cost of advertising and marketing. The profits are the main goal of the company and the profits will make the business gain further since it will have liquidity to implement other income generating projects (Joby, pp. 45-54).

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Conclusion

The banking sector is one of the major areas that have been negatively affected by the global financial crisis. The need to revive the area requires a lot of innovation. Customer is the most important asset that a business can have. The more satisfied the customer is, the more royal he will become. There are continuous improvement in technology, products and customer service. With royalty it is the business that will benefit.

References

  1. ComScore, Inc.; Customer Experience Takes Centre Stage in Online Banking. Investment Weekly News, 425.  2010. ABI/INFORM Complete. (Document ID: 2036806301).
  2. Gitman, Lawrence J.; Carl D. McDaniel. The Future of Business: The Essentials. Mason, Ohio: South-Western, 2005
  3. Joby, John. Fundamentals of Customer-Focused Management: Competing Through Service. Westport, Conn.: Praeger, 2003
  4. Johnson, Michael D.; Anders Gustafssonb, Tor Wallin Andreassenc, Line Lervikc and Jaesung Cha. “The evolution and future of national customer satisfaction index models”. Journal of Economic Psychology 22 (2): 217–245, 2001
  5. Mahmood, Rafique. Robust regulatory framework to spur growth of SMEs, says top Bahrain banker. McClatchy – Tribune Business News. 2010. ABI/INFORM Complete. (Document ID: 2008011671).
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