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 can’t get 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 frustration and sense of urgency in this TV spot is funny. But in the financial services industry, 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 one really stressed out teller working the main counter, and the drive-thru window as well. The branch was low energy, like it was on life support. 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 man in the suit from 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 man in the suit.”
“No, you don’t have two people back there,” 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 man in the suit, as he turned to walk 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 man in the suit chose to put fewer tellers behind the counter, because it was cheaper. But the best brands aren’t winning the race for customers by cutting costs alone. Nope, they’re winning because they’re also embracing digital technology to provide 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?
Case in point: Bank of the West. This San Francisco-based bank has more than 700 branches across the country, and over $60 billion in assets under management. When bank officials analyzed more than 50 of its Consumer Finance business systems, they discovered the legacy systems weren’t keeping pace with customer demand for faster, more convenient digital services.
Based on the analysis, the officials identified 60 applications across 20 different systems and platforms that needed to be modernized. The project was originally conceived as a three-year digital transformation effort. But, with the help of the Appian digital platform, the work was completed in just 18 months.
This digital upgrade resulted in a 42 percent gain in operational efficiency. It reduced overhead for regulatory compliance, and generated $10 million in annual cost savings across the bank’s National Finance Group.
Prior to Appian, all Wealth Management processes at Bank of the West was paper-based. With Appian, these complex processes were converted to digital in less than 12 months. Which boosted productivity for customer-facing operations by a remarkable 25 percent.
Cue up the boy in the ‘situation’ commercial. Sometimes an image captures the urgency of a situation better than words. This Clorox ad does that perfectly.
In the fiercely competitive, hyper-connected economy, there’s a sense of urgency about embracing digital transformation. Most of all, because it’s the best way to streamline legacy systems and processes that drive customer frustration.
Yes, cutting costs is important too. But in the age of the customer, improving customer service is how you win new customers, and keep more of the ones you already have. What could be more important than that?
Roland Alston
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