Today the Competition and Markets Authority (CMA) enforced bank surveys released findings which compare the quality of service from business and retail current account providers. This was the first survey of its type not completed by the banks themselves, and the results are quite staggering. Satisfaction levels in particular were widely ranging, from First Direct and Handlesbanken – a new UK entrant – scoring over 80% on “would you recommend”, to fewer than half of Royal Bank of Scotland (RBS) customers recommending its customer service.
What is the cause? You could say that generic customer service is a challenge, the sheer scale of the bigger banks must work against them. However their Premier propositions are very highly rated. It could be the digital channels, but as an example RBS banking apps are amongst the best in the market. The key factor that distinguishes First Direct and Handlesbanken is relationship-led banking. When you have a query you call a person and they answer without long IVR systems or call filtering. This must be the key differentiator. However that would mean that a lot of users have demands that cannot be serviced from an app or digital channel. That poses some questions: what are the users asking for that gives them such a negative experience? Does their financial situation reduce the experience?
Open Banking and Consumer Control
Changes in banking allow users to now dictate the way consumers interact with their bank digitally. Open Banking will allow any third party with the relevant classification to access their bank accounts from an app they choose, not one dictated by the bank. This generates some benefits that the banks just can’t match. The providers of these services are quicker and faster to react to market needs. The internal change of banks is to say the least slow. It has to be, they are hamstrung with regulation that slows them down as they have governance that would destroy a small fintech.
Risk is a big reason why we use the big banks or perhaps the lack of it. The FSCS Guaranteehas been invaluable in providing the confidence that banks keep our money safe. The new world of having third party technical access whilst keeping our money where we want it is a very attractive model. Accessing our finances knowing they are under the umbrella of a trusted brand is reassuring.
Can failing banks catch up in time?
So how do the banks who are failing match the service levels that the challenger and relationship banks are achieving? The simple answer is more people, that quite obvious. The not so obvious answer is by providing products which address user needs. I don’t believe the banks can do this with the pace required. It’s a shame as there are some wonderful people in the UK banks, I know I have worked with many of them. The governance challenges they face restrain them.
The new wave of Open Banking products should allow our banks to improve their service ratings. Accessing relevant data and the presentation of that data in new ways is one way that the bank user experience can change. Budgeting apps, monitoring spend, cardholder facilities are all available in the first entrants to the market. What no one has done yet is give the user the overall view of not what has happened, but what will happen and thus allow them to plan their spending many weeks and months in advance. This is a cash flow.
The sad fact is that cash flow is in almost every case separate from the bank account and as soon as a transaction is processed that does not match your cashflow it is out of date. However, the future is bright for consumers: entrants into the space in the coming months will deliver technology and functionality that has never been available to a mass market before.
I expect that those banks who fully embrace and adopt this technological change with open arms will sit amongst the top of the CMA’s next league table for satisfaction.