Only 1% Of Banks Follow Up With Customers

by Amit Tripathi    Jul 25, 2005

IT’s prowess in enhancing business efficiency is well known, but what is generally not admitted, if not unknown, is that there is a long way to go for the customer-facing side of the enterprise as far as customer retention is concerned.

Revealing a volley of startling findings at a recent IDC meet, Dan Bognar, director, financial services, Asia Pacific & Japan, (AP & J), Siebel Systems Inc., said, “The performance of banks worldwide leaves much to be desired irrespective of the noise they create about their IT savviness, given that 99% of banks do not follow up with a prospective customer after the initial telephonic interaction.”

The recent study which was commissioned by Siebel and IBM, evaluated 300 top banks of the world judging the effectiveness of the retail banking sales process in identifying and profiling the customer, understanding customer needs, recommending solutions, resolving queries, and following up leads. Even credit card and information relating to fixed deposits were studied.

If that has not awakened a CXO from his slumber, consider this, only 32% of banks globally, make an attempt to capture customer details during the initial interaction. The figure for the same in the AP & J region is a bit more positive at 63%.

So where does the malaise lie? Does it point towards front office inefficiency? Well the answer is, yes; to a large extent. Elaborates Bognar, “According to the study only 35% of banks globally (13% in India) make attempts to understand product features which the customer is interested in or that suit him.”

Thus clearly what is lacking is proactiveness on part of the front office. Bognar says, “On a comparative analysis it has been found that the frontline of banks in the AP& J region understands product details but do not care much to understand the specific needs of a customer.” Thus the customer either carries on disgruntled (as happens with the public sector and many so called IT savvy banks in India), or banks with a rival bank.

Although IT might form the backbone of banking operations today, the fact that 31% of top 300 banks never reply to a customer’s e-mail, or that only 3% of banks refer a customer’s e-mail to add value to the customer’s query, would suggest a relook and process reengineering on the part of the bank’s top brass.

Today,IT has enabled banks to go out of the stereotypical mould and thus we see facilities like internet banking, phone banking, banking through point-of-sale terminals (POS) that makes a case for customer convenience as well as an opportunity for banks to provide other products and services that would fit the customer’s need. But here also,the study reveals that only 7% of banks make a proactive attempt to up/cross sell products and services during the customer interaction through those delivery points.

Concludes Bognar, “Although all modern banks provide similar kind of products, what differentiates those products is the level of customer satisfaction.” The remedy thus lies in effective execution.

Tags: Siebel CRM