Customer Experience: the gulf between the talk and the reality in the UK banking industry

Is Customer Experience the latest fad?  Are some organisations, perhaps many organisations, simply paying lip service?  Or is it that clever people who have risen to the top of the corporation simply are confused and have a mistaken view of Customer Experience?  Is it possible that they simply see it as the gift wrapping?  Something that you put on the outside to make the product – which may not be that great – look prettier.

Complaints are a great opportunity to learn, to build an emotional bond and generate advocacy

From a customer perspective, customer complaints are  a key ‘moment-of-truth’.  As a customer I am reaching out to you to let you know that I am not happy with the way that your organisation has treated me.  And if I am making that complaint then I am implying that I think you are the kind of person, the kind of organisation, that it is worth complaining to.  That is to say that you will listen to me, investigate the matter efficiently, and come up with a fair resolution.  If I did not believe this, even if it is at a subconscious level, I would not bother complaining; time is in short supply and there is a lot to do.  As such a complaint is a great opportunity for the organisation to build a stronger bond with the customer.

How well is the UK banking industry handling complaints?

Now lets take the UK high street banks as an example – only because they are in the news.  I am pretty confident that there is at least one person at each bank with a Customer Experience title.  Yet, it appears that these banks do not even deal effectively with customer complaints.

According to Consumer Focus the UK banking industry received over 1.25 million complaints in the first half of 2010 and over 47% of the people who had made a complaint are not happy with the response they have received.

Is it that the UK banks have their house in order and the 47% of customers that are not happy are simply being difficult.  This is what Consumer Focus has to say:

“Consumer Focus is calling for banks to take complaints more seriously and devote more resources to improving customer service. The consumer champion is also urging the Financial Services Authority (FSA) to continue using the prospect of financial sanctions to keep the pressure on poorly performing firms.  The FSA previously concluded that banks’ complaints handling is ‘poor’ with more than a third underperforming in this area.

So why is it that the banks are so poor at handling complaints?  Back to Consumer Focus: “Consumer Focus thinks that poor customer service and complaints handling is a sign of weak competition.”  Frankly, the banks are doing such a poor job because customers are not bothering to switch – partly because of the perceived difficulty of switching and partly because consumers see all the banks as being pretty much the same.

What are the Customer Experience folks working on?

All of which makes me wonder what the Customer Experience folks working in the UK banking industry are working on?  Maybe they are working very hard and the Tops are simply not listening – after all complaints cost money today.   Or maybe they busy working on the sales side of the customer experience?

If you are working on improving the Customer Experience in the UK banking industry then please write and let me know as I am genuinely puzzled.

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.