Marketing. Service Quality in the Banking Industry

Like most service industries, the banking sector is mainly reliant on the quality of the services rendered for customer maintenance (Wise 2006, pp.21-22). Customers who are not satisfied by the services they are given always shift their patronage to other banks where they believe their needs will be met in a better way. The services that banks offer to their customers include financial advice, direct handling of the customers’ money which entails keeping the customers’ money in terms of savings and giving out the money to customers during withdrawals, currency exchange services as well as money transfer services. This is not an exhaustive list of the services banks offer to their customer but the important point is that these services come with unique characteristics that make them admirable to customers. In this essay, the important service characteristics will be examined followed by a blueprint for the banking sector with tangible cues for fail points and recovery procedures for failed services.

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Service Characteristics

To begin with, speed is a major service characteristic in the banking sector. Most successful banks around the world know how offering services to customers with speed means so much to the customers. For example, a customer will not be happy with a bank that makes him or her stand in a queue for one hour as he or she waits to withdraw his or her money or to deposit. To tackle the problem of slow services, most banks have adopted electronic withdrawal and deposit systems while those that have not adopted such technologies have trained their employees how to serve their customers at reasonably high speeds (Keynes 2009, pp.34-36). The other measure that most banks have taken in the direction of ensuring speedy services is the hiring of a sufficient number of employees as a way of ensuring that there are enough people to serve customers at all times. This is how serious speed is in the services offered by the banking industry.

Leaving the above aside, accuracy is another service characteristic that is very significant in banking. It is required at all stages in the transactions carried out by the bank with the customers or on behalf of the customers. The banking sector is very sensitive because it deals with finances, a subject that means so much to so many people. The presence of mathematics means that a slight error with the figures can cause great damage to either the customer or the bank. Customers are more comfortable when they are confident that the services they are receiving from the bank are accurate. It is definite that if a customer loses millions of dollars as a result of a lack of accuracy in the services offered by a certain bank, that customer will not continue using the services of that bank. He or she will look for another bank to handle his or her financial affairs.

Apart from accuracy, banking services are more valuable to customers when they are reliable. Reliability is simply the surety that the bank will be opened the following day and services will be delivered as usual (Liaw 1999, pp.106-107). It is not surprising to coke across banks that are not able to handle normal challenges well. Therefore a small challenge forces them to interrupt services and close down the premises till days on end as customers wait to get served. These are banks that are not reliable and customers do not get satisfied with this level of service. Reliable banking services usually make customers confident and it is not possible to find them moving to other banks. This is because they are satisfied. The simple illustration for the usefulness of reliability comes in the form of a customer waking up on a Tuesday morning with a headache. He or she plans to go to the hospital where she or he will be required to pay for medical services in cash. This customer passes by the bank to withdraw money at the usual operational time only to find the bank closed. The guard at the bank’s gate informs this customer that lacks a broken automatic teller machine located at the back of the bank has to be repaired before the bank can resume normal operations. This customer will not avoid feeling frustrated. He or she will most likely transfer his or her money to another bank at the slightest available opportunity. Reliable banks will carry out the minor machine repair as they carry out normal operations so as ensure that customers are not inconvenienced.

Besides the above, banking services are more appreciated when they are offered with the highest sense of professionalism. Professionalism is a word that is commonly misused in most fields. But in the banking sector; it refers to the maintenance of discipline and adherence to acceptable procedures and conduct while serving customers. It is not uncommon to come across employees who enforce their own rules such as not serving customers at certain hours or behaving in unacceptable ways while dealing with customers (Rothbard 2002, pp.65-66). This is a major setback to most banks in those customers who experience this wayward behavior from bank employees may never report to the senior managers at the bank but they will surely not come back to the bank for services. But banks where professionalism is upheld and the employees are well behaved the customers are satisfied and happy. They are not likely to transfer their patronage to any other bank since they are respected and treated well in their current banks.

Some of the unacceptable behaviors that constitute a lack of professionalism include repeated requests to customers for lunch or coffee. This is commonly observed in male employees hitting on female customers. Other forms may include requests for tips and commissions for expeditious service or preferential treatment. All these constitute a lack of professionalism and are a great turn-off for most customers.

Also, safety is a major service characteristic that banking services must also have. It is imperative that customers feel safe while being served. It is also necessary that they be assured of the safety of their investments since this is a great source of both confidence and security (McGee 2010, pp.54-55). If customers are not assured of their safety as well as the safety of their money, they may look for other places where they can obtain safe services.

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Affordability is another vital service characteristic that every bank should strive to achieve in its services (Patterson 1917, pp.11-13). The number of customers who can make use of expensive services is very few. The best banking services are those that most customers can be able to afford. Customers are normally proud of banking services that they do not have to struggle so much to get. It is also important to note that affordability does not necessarily mean cheap. It simply means that the quality of the services offered matches the charges on the services (Keynes 2009, pp.91-92). In this manner, the customers who get the services will not complain that they are paying too much for too little. The other way in which banks can try to meet the needs of most customers is to offer a wide variety of services so that each customer can go for what he or she can afford. This service characteristic can be described as variety as well as flexibility.

Lastly, the banking services that are accessible to most customers are of more value to them. Therefore, banking services must be accessible to customers so that they can make use of them. Accessibility can be enhanced through the location. The best place to locate a bank is where everybody can access it with ease yet without feeling insecure or unsafe.

A Blueprint for the Banking Sector with Tangible Cues for Fail Points and Recovery Procedures for Failed Services

The most important quality features that are to be offered to customers by the banking sector are as follows:

  • Reliable service: Customers will be accorded reliable service. This means they should be able to expect uninterrupted service at all agreed times.
  • Accuracy: Services delivered to customers should be accurate. Any unintentional errors should be promptly corrected and apologies offered to the concerned customer. It should however be the policy of the bank to try level best to offer error-free banking services to customers.

Other important quality features that this blueprint promises to deliver to customers include accessible services through convenient locations of banking premises, affordable services to all our customers, a wide variety of services to meet the needs of a wide range of clientele, timely service to all customers and a high degree of professionalism in any dealings between the bank and the customers (William & Alan 2009, pp 67-68). The focus is to maintain and increase customers through acceptable high-quality service that makes use of modern technology and properly trained personnel.

Locations of Fail Points

The failure of the banking sector is simply the failure of the sector to meet the service characteristic discussed elsewhere in this essay. The failed locations include lack of professionalism in the way bank employees deal with customers, reliable services, delays in customer service, lack of a wide variety of services to meet the needs of a wide range of customers, the lack of accessibility to the banking services as a result of inconvenient locations, and unaffordable services (Smith 2009, pp.47-49). There is also a lack of flexibility as well as a lack of accuracy in the services rendered to clients. These are potential failure points for the banking sector. What are the recovery procedures that can be used to remedy these failures?

The service recovery procedures that can be used to remedy the above failures include the training of employees to meet the professional standards when serving customers, disciplining employees who misbehave even after being warned, training employees to increase their efficiency and effectiveness, incorporating modern technology such as the use of automated teller machines to reduce congestion in banking halls and reduce chances of error, and the expansion of the service base so that a wide variety of services is available for a large market or set of customers. Also, the transfer of premises to convenient and easily accessible locations will help as well as the enhancement of both safety and flexibility (Singer & Greenberg 2010, pp.102-103).

In conclusion, accuracy, affordability, flexibility, efficiency or speed, variety and professionalism are some of the important service characteristics in the banking industry. The blueprint in this industry has the above elements and the failure points are all areas of the banking sectors that lack these service characteristics. Recovery designs must include the enhancement of the failed or absent characteristics such as the availing of a variety of services, making the services affordable, and training personnel to enhance professionalism.

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References

Keynes, J., 2009. The General Theory of Employment, Interest, and Money. New York: CreateSpace.

Liaw, T., 1999. The Business of Investment Banking. New York: Wiley.

McGee, S., 2010. Chasing Goldman Sachs: How the Masters of the Universe Melted Wall Street Down And Why They’ll Take Us to the Brink Again (1st ed.).New York: Crown Business.

Patterson, S., 1917. Banking Principles And Practice.New York: Alexander Hamilton Institute.

Rothbard, M., 2002. A History of Money and Banking in the United States: The Colonial Era to World War II.New York: Ludwig Von Mises Institute.

Singer, M & Greenberg, A.,2010.The Rise and Fall of Bear Stearns. New York: Simon & Schuster.

Smith, A., 2009.The Wealth of Nations. New York: Digireads.com.

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William J & Alan B., 2009. Macroeconomics: Principles & Policy.New York: South Western Cengage Learning.

Wise, J., 2006. Investment Banking Insider’s Guide. New York:lulu.com.

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