The customers vote for a strong local bank ?

I summarized my reflections on the latest satisfaction survey (Svenskt Kvalitetsindex) on the Insurance Industry in my previous blog entry. Now, it is time for the banking industry.

Contrary to the headlines in media, the retail banking customer has never been more content with their banks. The score is the highest ever, but there is dent in the satisfaction profile on price performance (see chart below) that may indicate that media actually is resonating their readers frustration with the mortgage rates.

Besides the price performance aspect, there are some interesting observations that I hope the industry will take seriously:

  • The fact that 12% of all retail customers have filed complaints during the last year is depressing but it is even more alarming that one third of those complaints have not been resolved. Banks should recognize that complaints in most cases are filed by customers that are loyal and give the bank a chance to improve. The old rule of thumb says that there are seven unfiled complaints for each that is reported.
  • Corporate customers claim that 40% of their complaints have not been resolved. The effect of this poor customer relationship management is evident. They rated their satisfaction level more than 25% lower than peers that have not filed any complaints.
  • Four (4) % of the respondents said that they have mentioned their bank on social media. And these respondents rated their bank lower on satisfaction and loyalty than their peers.
  • 50% of all retail customers are loyal to one single bank. And they are really loyal. The loyalty drops significantly for customers that have more than one bank.

You would expect that getting back with resolutions to customer complaints is common decency but it is evident from this survey that there is room for improvement, and possibly a competitor that understand the importance of Customer Experience Management. Taking the time to file a complaint is a vote of confidence from the customer and one of the most critical moments of truth where you, as a bank, stand the chance to prove that you deserve the customer’s  loyalty and full wallet share.

I hinted in my previous blog entry on the insurance companies that I sensed a pattern when looking at the star performers, i.e. Handelsbanken, Länsförsäkringar and Dina Försäkringar. The notion is reinforced when looking at the best banks, i.e. Länsförsäkringar Bank, ICA Banken, Sparbanken Öresund and Handelsbanken. They are all characterized as companies with a strong local / regional management; a fact that has not evaded Swedbank and SEB that are talking about replicating the governance model of Handelsbanken.

Am I the only one that appreciate the irony that this power shift appears at the same time as only 12 % of the customers say that they have visited a branch during the last 12 months and the majority of all banking transactions are executed by the customers themselves using on-line and/or mobile banking solutions?

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