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Ahem, Bank Honcho! You’ve Got a SIT-U-A-TION!

Blog: Appian Insight

You know that Clorox commercial where the little boy rushes into the bathroom in the nick of time, but he can’t figure out how to undo his belt?  “Oh no! Oh no! Oh no!” he says. “I hate this belt. I hate this belt… MOM!… We Have a SIT-U-A-TION!”

The boy’s sense of urgency in this TV spot is funny. But in the financial services industry, the urgency of customer frustration is no joke. Nope, poor service is one of the biggest contributors to customer defections. Here’s the math on the situation: 27 percent of unhappy bank customers defect every  year, according to  the experts at Bain & Company. On top of that, frustrated customers represent over $600 billion  in  deposits and revenue at risk, according to a recent brand vulnerability study by the industry experts at cg42.

On a related note, I walked into MEGABANK the other day to make a cash deposit. (I’ve changed the name of the bank to protect the innocent). As usual, there was a single stressed out teller working both the main counter and the drive-thru window as well. The branch itself was low energy. There was no hustle and bustle. And the customer service staff was cut to the bone.

Frustrated with the slow service, the lady behind me complained that it was always like this at MEGABANK. Annoyed, she summoned the honcho in the nearby office. “Why don’t you have  more people behind the counter? She asked. It’s really busy in here.”

“I’ve got two people back there now,” said the honcho.”

“No, you don’t have two people working the counter,” said the lady.  “You only have one.  That other teller is busy doing other things. She hasn’t waited on anyone since I’ve been here. Every time I come to this branch, it’s the same story — long lines, slow service.”

“Sorry Miss,” said the honcho, as he walked back to his office. “We’re doing the best we can.”

“They just don’t care,” said the lady. You’d think they’d schedule more tellers for peak hours, to speed things up. It’s ridiculous. I’m seriously thinking about switching banks.”

Perhaps the bank honcho scheduled fewer tellers to work the counter, because it was cheaper. But the best brands aren’t winning customers by cutting costs alone. Nope, they’re winning customers with digital technology that provides better customer service.

It turns out that service is what bank customers care about most, according to a recent story in the Wall Street Journal (WSJ). Yes, access to mobile banking is important to many bank customers. But so is the quality of branch service. Some 35 percent of WSJ readers said branch service matters to them.

The thing is, when people want to borrow money to purchase a home, a car, a vacation, whatever, they want fast, easy access to the funds via mobile, branch, whatever.

If you’re in the business of taking deposits or issuing securities, making loans, keeping assets in custody or trust, or managing them to generate a return, every customer interaction is an opportunity to eliminate frustration and potential revenue loss as well.

The problem with conventional banking processes, is that they don’t make you feel like your time is valued. You know the drill. You waste time standing in line for routine transactions. You want assistance with your mobile banking app, but to contact customer service, you have to leave the app,  dial a toll-free number, and navigate a complex IVR menu, or repeat information to a contact center agent, who has no idea why you called.

Or, to apply for a business loan, you have to manually fill out a loan application at a branch locations. Then, the application is emailed or faxed to a loan officer, who sends it to an outside Appraisal and Title company. Days or weeks later, the application comes back to the branch for a loan officer to approve.

This is why conventional banks are feeling the heat of digital lenders such as Lending Club and Kabbage. These unconventional lenders have developed faster digital underwriting processes, which can make loans of up to $100,000 in minutes. For traditional banks that chose to stick with legacy processes and systems, this kind of  digital disruption compounds the risk  of losing business to digital  competitors, with faster, more user-friendly, customer-facing interactions.

But what if you could build faster, mobile Loan Origination  applications to accelerate loan approvals? What if you could quickly deploy these apps,  without the hassle and cost of provisioning and maintaining on-premises hardware?  What if you could simplify the complicated processes behind routine, customer-facing transactions, to cut customer frustration to the bone? In the old days, this kind of business process improvement was harder to come by. We didn’t have the benefits of low-code,  Application Platforms as a Service,  or agile cloud application development.

Cue up the boy in the ‘situation’ commercial. Sometimes an image captures urgency better than words.  This Clorox ad does that perfectly.

In an economy where customer interactions matter more than ever, there’s a sense of urgency about embracing  digital transformation. Consider that the number of devices on the Internet of Things (IoT) will more than double to 22 billion by 2018, according to IDC. This digital trend will drive the development of 200,000 new apps and solutions to take advantage of IoT devices. On top of that, IDC also predicts that organizations like yours will have to overhaul legacy customer engagement systems to support up to 10,000 times more customers and customer interactions than you do today. Not to mention, deliver more personalized customer service as well.

Yes, digital transformation will help you keep your back office humming.  But the coolest thing about digital transformation is that it will help you win new customers and  keep more of the ones you already have. As a bank honcho, what could be more important than that?

Roland Alston

The post Ahem, Bank Honcho! You’ve Got a SIT-U-A-TION! appeared first on Appian Insight Blog.

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