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Does customer service in banking matter?

When talking with bankers, they refer to banking as "a utility".

It’s just something that’s there, like gas and electricity. It’s not valuable or differentiated and no-one wakes up wondering how their payment will take place. That’s why it’s not priced or serviced as something of value, but just thrown out there and use it or don’t, we don’t care.

I say this because customers don’t switch banks because they see it as just a utility, and bankers know this so they don't try to compete on customer service as they can make money regardless.

Even though it’s easy to change bank accounts and the European commission is making it even easier, banks know customers can’t be bothered changing because they think they’re all as bad as each other.

For example, Santander took over Abbey and now Abbey get awful customer reviews. If you go by the surveys, Abbey are the worst bank in Britain for customer service. And yet their actual customer numbers, announced last week, show a massive spike in customer growth.

If they’re known to be the worst bank in Britain for service , how come their business is growing?

Because customers don’t care.

Abbey offer better loan and savings rates, and customer flock in their hoards to the bank.

Meanwhile, the Co-operative Bank is a lovely cuddly bank. They’re known to be eco-friendly and nice. If you call them, their customer service and call centre staff are fantastic. Nothing is off-shore and it’s all very personality driven and friendly. Their internet site, Smile, is regularly voted as the best in Britain and their overall bank service comes top of most people’s lists.

But have they gained significant market share?


They haven’t bought customers with good rates and so the customers have not followed.

So banks don’t need to care a jot about good customer service because it makes not a jot of difference. I mean Wachovia were known as the best bank in America for customer satisfaction, according to the American customer satisfaction index, and look what happened to them (bust if you didn't notice).

Added to which good service costs, and banks don’t want that overhead.

So do everything as cheaply as possible, don’t bother giving good service and just ensure your utility works.

Like gas and electricity, just make sure it works and be the lowest cost provider.

Then a little bird starts tweeting in my head: what if we made our bank the best it could possibly be?

What if we broke this utility mould and focused upon being exceptional?

What if we got customers to pay an annual fee, and then told them they would get the best of everything?

What if we bundled all the bells and whistles on the account, and gave them birthday cards and Christmas gifts?

What if we met with them once a year for a chat, called them with reminders of key things happening with their account, alerted them to better interest rates and deals whenever we released a new product ….

What if, what if, what if …

The what if’s are endless but, you know what, all of the above are available, have been tried and, you know what, the customers didn’t care.

They didn’t come, they didn’t pay, they didn’t want it.

Customers just want utility banking and bankers have become meshed in providing just a basic banking service.

Can this mutual apathy ever be broken I wonder?


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About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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