Bank customer service – ‘click or dial’versus branchThought Banking Solution | Syste...
Bank customer service – ‘click or dial’ versus branch             Thanks to the ever increasing use of technology      of ...
While relationship managers can work towards          Also, the popularity and wide usage of non-creating product awarenes...
customers. The CSRs, who often do not have any        operationally. Over a period of time, reduced             banking ba...
The rural urban divideBanks should also keep in mind that the               that the banked population of India consists o...
Conclusion             Banks need to attract all types of customers        benefits by way of more business which can     ...
About FinacleFinacle from Infosys partners with banks to transform process, productand customer experience, arming them wi...
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Finacle - Bank Customer Service: Click or Dial versus Branch Banking


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Finacle paper on bank customer service analyses important factors that impact the adoption of technology on the banking ecosystem and how the effective balancing of the human factor against technology adoption can contribute to a fuller realization of banks goals.

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Transcript of "Finacle - Bank Customer Service: Click or Dial versus Branch Banking"

  1. 1. Bank customer service – ‘click or dial’versus branchThought Banking Solution | Systems Integration | Consulting | Business Process Outsourcing
  2. 2. Bank customer service – ‘click or dial’ versus branch Thanks to the ever increasing use of technology of banks, especially in a rural-dominated country by Indian banks, the proverbial human touch in like India. This paper analyzes the factors that customer service is being increasingly replaced impact the adoption of technology on the by inanimate touchscreen presses, button clicks banking ecosystem and how the effective and IVRs. But this strategy seems to cut both balancing of the human factor against technology ways as technology adoption sans the personal adoption can contribute to a fuller realization of touch can subtly impact the long-term prospects a bank’s end goals. Introduction of alternate channels A foreign bank operating in India started and phone banking, channel-based banking popularizing alternate channels for banking became the norm. The banks’ premise was that transactions in a big way, going to the extent the time spent in attending to sundry customer of charging customers using the branch for queries could be better utilized attending to transactions and service requests, while offering high net worth customers to create new business discounted charges to customers using non- and cross selling opportunities. Staff strength branch channels. could be lowered and the branch could be run smoothly and the staff can be more organized The new generation Indian private sector and efficient with the aid of technology. banks soon followed suit and with increasing customer awareness about the Internet, mobile Click or dial – pros and cons The advantages that technology offers are international remittances or trade finance obvious. The simpler transactions like obtaining transactions like purchase of foreign bills. account balance, viewing/querying completed Thanks to the Internet, customers are at liberty transactions, creating a fixed deposit, requesting to complete simple transactions at leisure, at any a new cheque book and placing a stop time of the day and without branch assistance. payment request can be done through click (by However, constraints like lack of awareness accessing the website) or dial (by making calls and unavailability of the concerned bank to banks’ customer service numbers). These representative may adversely impact transaction routine transactions usually get concluded numbers. Also, Internet-enabled transactions within the turnaround time defined by the bank. provide very limited opportunity to banks to However, branch visits will be necessary at cross sell and thus attract new business. Further, certain times like when an urgent stop payment reduced number of branch visits by customers request has to be placed and also for complex makes introduction of complex products transactions like availing a home loan, or for like housing loans difficult, if not impossible. specific foreign exchange transactions like02 Thought Paper
  3. 3. While relationship managers can work towards Also, the popularity and wide usage of non-creating product awareness, they mainly service branch channels notwithstanding, manyhigh net worth customers. The mass customer customers still do not find them fully reliablesegment is mostly ignored. due to various reasons. A recent survey shows (figure below) that about 17% and 29% of theTo remedy this situation, banks have attempted customers found Internet and mobile bankingto popularize new schemes or changes in unreliable, respectively.interest rates by using non-branch channels,that is, through messages/marketing calls, butwith limited success. This can be attributed to 100% 17 29bad call timing or inability of the inexperienced 80%callers to clarify customer queries satisfactorily. 60%In addition, while the customer does consider 83 71 40%factors like interest rates while deciding on aloan product, a regular branch visitor is far 20%more likely to approach the same bank for 0%the loan. The bank also will be in a much better Internet Banking Mobile Bankingposition to convince such a customer to do Very Reliable/Reliable Unreliablebusiness with it.Simple versus complex transactions – businessbenefits to the bankWhile simple, technology-enabled transactions Worse, the customer might even shift loyalties.– such as placing a request for a cheque book The customer might move his/her savings bankor a stop payment request – earn income for account to avail of the benefits of a home saverthe bank, the income from the sale of complex loan scheme where the balance in the savingsproducts is much higher and the bank stands account is linked for interest calculation, andto lose much more if it misses out on such also carry out other complex transactions likeopportunities. For instance, it will lose out on overdraft and remittances from there. Cross sell/huge interest as well as allied income like loan upsell of products is essential for increasingprocessing charges, if the customer chooses to business which can be mostly achieved throughavail the housing loan from a different bank. the branch outlet rather than through channels.Customer service SLAIt has been frequently observed that routine CSRs are assigned a minimum number of queriesqueries or transactions when routed through in a day to be resolved, and their effectivenessalternate channels, take a long time because and efficiency is measured on the number ofof the process involved – the customer resolutions. The number of queries attendedraises the service request, which gets routed per CSR per branch is used as a yardstick forthrough a Customer Service Representative performance evaluation. However, on analysis,(CSR) for resolution based on the Service Level it often emerges that many queries were notAgreement (SLA). resolved to the fullest satisfaction of the Thought Paper 03
  4. 4. customers. The CSRs, who often do not have any operationally. Over a period of time, reduced banking background, are minimally trained and satisfaction levels will begin to adversely impact are typically equipped to provide only limited the bank’s customer retention prospects. answers. As a result, queries are not addressed Such issues can be handled at a much faster with a holistic perspective. pace if the customer visits the branch instead, The efficiency of CSR is generally measured by and raises the query there. At the branch too, the number of requests closed without the bank needs to employ efficient and assessing the criticality and complexity of the experienced staff, who can not only resolve requests closed. The SLA statistic, which gets problems but are also knowledgeable about the reported to the bank’s higher management, products on offer, and can engage meaningfully thus ends up presenting an erroneous picture of with visiting customers, paving the way for a ground realities, and the bank fails to improve mutually beneficial long-term relationship. Customer complaints and satisfaction levels An analysis of the customer complaints logged The following diagram depicts the results as per during the last decade throws up a surprising a recent survey on customer satisfaction levels, fact - the number of complaints has increased which revealed that only a small percentage of in spite of the technology advantage and bank customers are highly satisfied with channel- convenience afforded by click or dial transactions. based services. Since customer satisfaction is One reason could be branch proliferation and vital for retention and enhancement of the the consequent rise in the number of bank business relationship, a more customer-friendly accounts, as also the variety of complex products approach and direct interaction to understand on offer, and the heightened awareness of needs and resolve queries are called for. customers about their rights. Customer satisfaction level Customer satisfaction level 82% 75% 15% 10% 11% 7% Internet Low Medium High Mobile Low Medium High Banking Banking04 Thought Paper
  5. 5. The rural urban divideBanks should also keep in mind that the that the banked population of India consists oftransactional and servicing needs of rural and more rural than the urban.urban customers are quite different. While the Banks operating in the rural sector focus primarilymajority of banking offices is still based in rural on credit and low cost deposit products apartareas (RBI data, as at 31/03/2011), the volume from traditional savings and recurring depositof business is far less than that of urban offices. offerings. Also, the bulk of the rural population is not technology savvy and still visits the Population group-wise distribution of number of branch for routine transactions, despite the offices of commercial banks - as on 31-03-2011 availability of technology-enabled services. As a result, customer services through click or dial are more or less restricted to the urban and metropolitan banking population. 33602 23048 19156 17274 Moreover, complex banking products like structured deposits and foreign exchange products like options, futures and derivatives Rural Semi Urban Urban Metropolitan have not had the desired impact amongst the rural population. This has meant that on theStatistics reveal that only about 48% of the one side, the rural Indian has not benefitedentire Indian population has bank accounts. from the technology available, and on the other,Further, studies reveal that out of the rural banks find it unviable to expand their ruralpopulation of India which constitutes 70%, only reach or offer channel products and other40% have bank accounts, and of the remaining complex offerings.30% urban population of India, 60% are havingbank accounts. What this essentially means isThe age factorAge is an important factor that determines attuned to Internet and telephone banking,banking product demand and channel usage, and prefer to transact through click or dial. Inand therefore the kind of customer service to contrast, customers belonging to the 40+be provided. It has been observed that the segment find it challenging to bank throughsavings potential of individuals above the age technology-enabled channels, perceiving themof 40, and their capacity to create assets in the as unfriendly, and prefer to visit the branch. Forform of residential apartments, long term fixed them, using channels for transactions is not adeposits and retirement savings, is slightly natural choice, but one that is forced upon byhigher compared to those who have either just the bank. Even when the Automated Tellerentered into professional life or have less than Machine (ATM) was introduced by the new10 years of work experience, and are frequently generation private sector banks in the earlyjob hopping. The decision on long term 1990s, the usage was restricted to the youthinvestments like housing loans or pension/ for a while, before it caught up with 40+retirement products are taken mostly at the customer segment .age of 40 or over.Having been technology savvy from a youngage, customers below the age of 40 are more Thought Paper 05
  6. 6. Conclusion Banks need to attract all types of customers benefits by way of more business which can – young and old, urban and rural, technology further translate into a lasting relationship savvy and otherwise – to increase business. beneficial to both the customer as well as There is a customer segment that enjoys visiting the Bank. the bank and is also likely to provide references On the other hand, the suggestions/feedback that will help the bank get new business. The requests requested by the Bank through click bank staff has to consciously set aside time to or dial are mostly ignored by the customer service such customers and also use this or feedbacks provided by the customer are opportunity to cross sell. not evaluated properly because of the When it comes to the rural customer, it is incompleteness of the feedback. The inability of imperative to build trust, assist in improving the customer to communicate in a meaningful personal savings/deposits and provide guidance manner may be due to a variety of reasons which in loan selection. Since the rural customer has includes a structured format designed by the limited access to current trends and technology, Bank to capture the just desired information or the quality and timeliness of advice are the usability. The feedbacks thus received by important for providing enhanced customer click or dial will not help the Bank to make experience and building a great relationship. judgment/decisions on customer servicing or Then again, a well presented and user-friendly to make any relevant changes to the processes. website, and an alert, knowledgeable and It is the need of the hour for the Banks to proactive CSR will play a significant role in employ front office staff who are experienced, retaining the urban customer. aware of the products that the Bank is offering, Since the demands of customers from various conversant with the recent regulations which segments are not identical, there has to be a have come into effect and its nuances on judicious mix of technology and the human economy so that the Bank staff can engage element in customer service and banks should with the customer in a meaningful discussion. ensure that the service levels and efficiency is Over time, more such quality help rendered improved in all the facets of banking. builds trust and confidence with the bank staff, and the customer wouldn’t mind visiting the If the customer visits the branch, the Bank staff Bank multiple times for an advice or business can analyze the banking needs of the customer decision rather than raising a query by click or and more cross sell/up sell business opportunity dial even though it is a simple transaction. can be explored. Once the opportunity conversion into a banking account happens, the bank References 1. 3. 2. Reghunathan Sukumara Pillai Industry Principal, Finacle, Infosys Santhy Sreedhar Lead Consultant, Finacle, Infosys06 Thought Paper
  7. 7. About FinacleFinacle from Infosys partners with banks to transform process, productand customer experience, arming them with ‘accelerated innovation’that is key to building tomorrow’s bank.For more information, contact© 2012 Infosys Limited, Bangalore, India, Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosysacknowledges the proprietary rights of the trademarks and product names of other companies mentioned in this document.