Does customer focus matter in banking?

Customer Service in Banking Does it Pay?

Customer Focus in Banking Does it Pay?

A recent article in the New York Times highlighted one bank analyst’s view that “Spending time solving problems with people is not selling products…. Its wasting time”.

As a bank analyst his role is to review the bank’s financials and make buy, sell or hold recommendations to his clients. His statements came after having a poor customer experience at his local Wells Fargo. He lamented, “I’m struck by the fact that the service is so bad, and yet the company is so good.”

This particular analyst has a history of being controversial so what he says has to be taken with a grain a salt, however, does he have a point?

The analyst decided to change banks as a result of the poor experience. Did he expect other customers not to respond in the same way? By letting their feet do the talking?

This incident raises challenges relevant to all leaders trying to improve customer focus.

Would you use a single example of failure to conclude this is the way Wells Fargo does business? Common sense suggests the answer would be “no”.

Was this experience and an anomaly or symptom of greater problems? Was it a one off issue confined to one employee in a single branch or a sign of a broader cultural issue?

In Wells Fargo’s case the evidence suggests the former. Over the past few years the bank has a string of top place finishes in customer satisfaction independently measured by the American Customer Satisfaction Index.

Based on our research we know that companies with high levels of satisfaction are more profitable. The reason Wells Fargo is doing well is because of its customer focus not in spite of it as the analyst suggests.

Another question highlighted by this story is how important is “customer service” to the banking experience?

Customer service is part of a customer’s consideration set but it will vary in importance depending on the customer. Customers have different needs and will use the bank’s services in different ways. A customer looking for a mortgage will be more sensitive to the bank mortgage rate than one that only has a checking account. Some customers may never enter a bank branch. They conduct all their banking online. Customer service from them only becomes an issue when something goes wrong.

As a business leader what is more important to understand is how customer centric is the company’s culture. Am I setting sending the right messages to our team about the importance of customers? Am I role modeling the behavior that I know will make us successful in the customer’s eyes?

What do you think?

Is this a bank analyst just trying to be controversial to get publicity? Is it a one off or an early warning sign?

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