There is Nothing Personal about Personal Banking

I recently conducted a "straw man" poll into understanding people's frustrations with their personal banks. The population sample was from LinkedIn members from around the world who are computer literate, mainly professional, and have a desire to interect on electronic systems. There weren't any really surprising results. The frustrations can be seen as product, people and technology related. Here is my take on some of the issues highlighted.

The main conclusion is that the customer experience in branches is poor because of long lines and inadequately trained staff. This is an old issue which banks have tried to solve by moving some of the business into call centres.

The frustrations with call centres are relationship churn (never interacting with the same person and the associated lack of continuity and ownership) and lack of ability to make unscripted decisions.

In general people were happy with the products with some minor complaints about lack of flexibility in terms of product delivery, product rules and cost structures.

The on-line experience is better with frustrations related to site performance, browser support and overly complex and fragmented security.

These findings underline the idea that innovation in banking is really about innovation in service and customer experience. Some of the basic products have been around for centuries.

What banks need to take into consideration is that more and more customers are becoming comfortable with conducting business on-line. However, there will always be a handful of interactions that need to be done between people, either over the phone or face-to-face.

At that point the quality of interaction is the key differentiator and a source of competitive advantage.

The on-line experience is an opportunity for further innovation. This is the dangerous zone for many banks with their legacy of multiple complex, poorly, integrated, monolithic applications. The physical-world analogy of the situation is where you are selling steel bars and coal in high fashion clothing stores in popular shopping malls. You need the flexibility to be able to modify, repackage, and tailor relatively commodity products to the whims and fashion dictates of the customer base.

The scariest part of this is that many customers seem loyal only because there is too much pain and suffering in changing from one supplier to another.