Dual Irony Towards Better Customer Service in Banking Industry

Dual Irony Towards Better Customer Service in Banking Industry

How well an institution delivers its service to the customers differentiates it from other similar institutions in the service industry. Banking industry is the kind of industry where almost all the competitors promise to offer identical products, be it a deposit or credit product or an alternative banking product. What distinguishes a bank from the competitors is solely it's orientation towards providing efficient services to our customers and towards delighting them.

Satisfied and delighted customers are the best yet largely ignored form of marketing strategy. If one fails to satisfy their customers, they are surely going to switch to the competitors. But if one is delighted, they are surely going to bring in more loyal and profitable customers via words of mouth advertising.

In the modern marketing arena, customer retention is equally as important as acquiring new ones. Customer churning is very high, as they have multiple alternatives to switch, and once lost it’s very difficult to gain them again. Therefore, marketing internally inside the organization amongst employees is very important for focused customer orientation. Towards this, not only an individual employee is responsible. The management and their policies should hold that loyal customers are too a vital asset as the organizational brand itself, and should encourage and support customer orientation.

But what is ironical is that the profit motive institutions cannot serve customers at the cost of their fallen profitability. They have to maximize shareholders’ wealth. Better customer service requires investment in terms of increased staffs and physical resources. Although better customer service is profitable in the long term, they appear to be costly in the short term. Therefore, most of the institutions ignore entirely the notion of serving to delight their customers.

But customer service should not be treated as cost but rather as an investment for the long term. Those who have adopted this philosophy have always won the best share of the market and industry profitability.

Another reason why an institution fails to serve customer better in banking industry is its rigid compliance requirement. No institution serves its customers at the cost of unmet compliance. And they should not. By being inflexible to the rules set laid out by itself and its regulatory entities, it is being socially responsible as well. Then there arises the second irony of customer service- being rigid to rules, there’s chance for customer dissatisfaction; being flexible to the rules and regulation, oh it’s just out of the scope! It is very crucial irony these days in banking industry. What banks want- full compliance or happy customers?

Obviously, a bank wants both.

Then how possible?

It’s not just as impossible, but it’s tough. Very tough. The most important and only tool towards tackling this irony is customer awareness. The first thing customers should be made aware is that compliance in banking industry identifies and discourages criminal activities such as corruption, money laundering and terrorist financing. Next thing the customers should be made aware is that all the compliances is for the security of their own fund deposited in the banks, therefore they should not take it as cumbersome rules laid out by banks but rather as their own responsibility towards making the world a better place to live. Having understood the importance of the compliance, a customer is more likely to support the banks’ policies and requirements as to compliance.

Easier said than done, customer awareness for compliance is very difficult. It should not only be the sole responsibility of the employees at the ground end of banking channels. Umbrella organization of banks, the central bank and even the government should invest towards this, and their efforts should be well coordinated.

Customer satisfaction probably is the mostly used marketing jargon these days in banking industry. But focused orientation towards it should from the policy level and from the ground level both. Although it appears to be costly and cumbersome for the short run, it fruits in increased market share and profitability in the long run, considering and tackling the dual irony as mentioned above.