Face Time

If the explosion of social media is anything to go by, the way in which banks, superannuation funds and building societies interact with their customers is going to fundamentally change in the future.

Here at CoreData we are fascinated by how people buy and sell financial services. At the time of writing this blog, we have five mystery shopping programs in train and research live in Australia, the United Kingdom and the United States.

About a month ago we were considering the way in which the value of how financial services companies interact with their customer base might evolve. The reason for this is that we were doing a piece of work for a building society that was looking at the way its brand was behaving, what people thought of it and what the future might look like.

The single most important thing that said building society held its hat on was first rate over the counter service. If you went to see this institution, in any of the offices, and asked for service, the staff were only too happy to help.

The building society management sat in the meeting rooms and cited examples of why exactly the service was top notch: “we know all out customers by name”; “if they call and ask for help we will help them”; “we treat our customers like family, they feel like they belong.”

At CoreData we believed this. The people running the business were, as far as we could tell, perfectly genuine and took their role and their customers dreadfully seriously.

So that weekend we started looking through the data they had given us, such as growth rates (year-on-year) share of wallet, how new products had fared, how recent changes had impacted their members and what emerged was a flat and stagnant business.

We decided to explore this concept of likeability further via two pieces of work. The first was to explore the account opening process at Australia’s banks, credit unions and building societies and to what extent people valued face to face interaction.

Initially we carried out one mystery shop at each business, but the data was horribly choppy. It turns out essentially that opening an account and asking for information is yet to become a streamlined process in the finance industry.

There is, of course, data that supports a smooth, well managed and well understood industry – but this appears to only be true for about half the mystery shopping events we ran. The other half of the data reveals an industry which is still struggling to try to put all the pieces together.

For example when the mystery shoppers asked the staff member which was the best savings account, half the branch staff could not tell them, nor could they tell them the difference between a transaction account and a savings account.

Almost all the bank staff knew what to do when they were asked about home loans, either offering product information or offering to organise a meeting, however they had absolutely no idea what to do when they were asked about superannuation.

Most of the customer-facing staff, according to the mystery shoppers, seemed flummoxed by the question.

Perhaps most frighteningly, one of the businesses we mystery shopped on the Gold Coast referred customers to a competitor for superannuation.

When those first reports came in we thanked the mystery shopper for their report, paid them, sighed and thought, we will have to do this again. So we did – three times. Twice the mystery shoppers were referred to a competitor and once they were told, point blank, we don’t do super.

As for the data we gathered on whether or not people value face-to-face service, we are still pulling that together.

The early data suggests they don’t. In fact, if they can avoid walking into a bank they will, but we will write about that in more detail when data gathering is complete.