Banks: Fewer Tellers, More Sellers
Sydney Morning Herald
Wednesday August 6, 2003
The banks have done their best to get us out of their branches. Now they want us back again - but not to do our banking. In fact, they've done their darndest to charge the highest transaction fees for customers who want to bank in person. The banks want customers in the branch so they can sell them investment products and loans.
Picking up new customers is relatively expensive; it's cheaper to sell to your existing customer base. Some banks refer to it as mining the client base, or deepening the client relationship, but it all boils down to selling more products.
As a result of this shift from banking transactions to selling products, the new wave of bank branches look nothing like we're used to. The teller counter in many is all but invisible. In some banks customers virtually have to run the gauntlet of customer service personnel, investment booths and ATMs before finding the teller at the back of the branch.
The push is to have bank personnel on sales stations, where customers can interact with a "financial adviser" who can talk about investing your super, directing your savings into a term deposit, selling you a home loan, an investment loan, car loan, home insurance, life insurance.
The banks have been very successful in changing the way we do business with them. Most banking is done on the phone, using ATMs or on the net. We end up doing most of the work with a machine, not people.
Figures produced by Unisys show that Eftpos, credit card e-payments and direct debits and credits are all growing, while cheque use is shrinking. In 1998 cheques accounted for about 3.7 million transactions daily. The figure last year was just under 2.5 million daily.
Over the same period direct debits rose from 600,000 to 1.25 million a day. Direct credits have grown even faster, to almost 3 million transactions a day. Payments by credit card have grown the fastest, from 1.4 million transactions a day to 3.5 million a day, at least partly due to the proliferation of loyalty schemes.
According to Greg Howell, of Unisys, all this is good news for both customers and banks. The channel branch is seen as a valuable asset in terms of increasing the amount of business put through the client base. Research has shown that while most people are reasonably accepting of conducting their banking on their own, they want to sit down and discuss products and talk about various options. Once people sit down to talk to a consultant about a home or a car loan, it is an easy next step to ask them if they need household or life insurance, or need an upgraded policy.
To improve the ambience, lighting in these branches has been softened and the foyer is made more welcoming and less formal. Even cups of good coffee are provided for customer waiting for advice.
All of this is designed to improve the customer experience. The number of clients leaving banks is still considered high, with up to 15 per cent of customers swapping their bank for another or for a credit union or building society every year. That represents 4.5 million accounts a year. To replace them is expensive.
Much of the churning relates to escalating fees, but Howell says dissatisfaction with service levels is also high on the list.
His research has found that what makes people change banks is also a feeling that they are not important to the bank, being given the runaround by Jason, Emma and Skye, rather than having one reference point, such as a branch manager.
Westpac introduced its "ask only once" policy, where customers deal with one person instead of getting pushed around to a number of people. This is in response to accusations of poor service and, says Howell, it is winning over customers.
One aspect about this trend to self-banking is that more responsibility is placed on bank customers to ensure they are not defrauded, or that their PINs are not misused.This aspect will be explored in more detail in another column.
© 2003 Sydney Morning Herald
Share This