The banking industry is different from other retail based industries in terms of customer service. Products and services cannot just be developed and directly offered to consumers. There are numerous legal and financial hurdles that must be overcome in order to offer innovative services. This means that good customer service can only be delivered after consistent application of efforts. Some of the problems that banks are likely to encounter while attempting to deliver solid customer service include privacy laws, fair lending policies and debt securities. There are also problems with interdepartmental coordination as persons who know what needs to be done in order to improve bank services are usually different from those with the capacity to do so. Banks are also wary of risks as they often try to save up on unnecessary costs and customer confusion. (Peacock, 2005)
Despite all these hurdles, a number of financial service providers have been able to overcome them and have placed their consumers first in their service offerings. The key to successful customer service in the baking sector is provision of solutions that are tailor made to meet clients’ needs. No matter how small, an innovation, it can be sufficient to place that firm above its competitors if it meets customers’ needs. In order to become more client oriented, several banks in the international arena have started with their organizational structures. Financial institutions ought to break down barriers between their sales functions as well as their customer service functions by linking them. (Prahalad & Ramaswamy, 2004)
In line with the latter strategy is the process of streamlining company processes such that employees are fully aware of the steps to be followed in seeking approval for innovations. Once these processes are clear, then employees will contribute tremendously towards improvement of customer service by continually generating new ideas. Consumer data analysis can also be another insightful way of enhancing one’s customer service in the banking sector. Although the latter industry has been somewhat reluctant in adopting this new strategy, other non financial institutions have not been as slow. For instance by using conjoint analysis, banks have the advantage of assessing how their consumers respond to various banking products so this gives them an indication of what should be changed and how this can be done.
Customer service needs to dwell on simplifying the banking process. Whenever banks introduce new services or products, they need to do this in a manner that maintains simplicity (Bowen & Hedges, 1993). All the unnecessary parts of that service need to be trimmed off and only the relevant aspects left out. Studies have shown that this greatly enhances customer loyalty. If it happens that the concerned product cannot be made any simpler, then customers need to be informed about all the aspects of that service that they should know in order to meet their needs. This is a key element in sound customer service.
The latter issues are characteristics of good customer service offerings. However, the discussion cannot be complete without referring to how People’s Bank has applied or translated the latter concepts in its day to day activities. First of all, People Bank is a development oriented bank. The bank has realized that financial service provisions are not the only concern that their customers have when they approach the bank. This company has come with an effective plan which examines consumer progress as well. This has helped such clients in the process of running their businesses successfully or dealing with other financially related challenges (Salter, 2007).
People’s bank has over six hundred branches throughout Sri Lanka. Consequently, the institution currently boasts of an eleven million consumer base. The major advantage of such an approach is that consumers now have a wide range of selections from which they can deposit their money. This has made their banking processes much more convenient. Not only has this strategy benefitted the Bank’s clients, but it has also led to continual increases in deposits for the bank. This is the reason why its asset base has grown to such substantial proportions. In fact, the Bank currently prides itself as being the financial institution with the largest savings and deposit bases in the entire nation of Sri Lanka.
The manner in which People’ s bank deals with its consumers also goes a long way in explaining why the company was recognized as the service brand and brand of the year 2009 by Slim Awards. (People’ Bank, 2009) This company places a lot of emphasis on personalised banking. Treating their clients in a manner that makes them feel valued is a key element of their customer service principles. This is often denoted by an increased number of innovations tailored to solve clients’ problems. For instance, many consumers had complained about high loan rates and thanks to the company’s intense customer service program, it was able to find out this pressing problem and reduced its interest rates on loans and overdrafts as well. Consumers were content with this approach and they began applying for more loans. Particular emphasis is usually given to SMEs because the institution has learnt the importance of these types of businesses in the growth and development of the country.
Meeting clients’ needs at their locations is one of the major principles driving this company’s customer service. For instance the eastern and northern parts of the country have been highly insecure especially because of the ongoing conflicts there. People’s bank did not abandon those areas as it sill operates branches in such regions. Therefore its consumers can still enjoy all the benefits associated with such a successful bank.
In close relation to the latter example is the speed with which this firm responds to certain external challenges that may impede upon its ability to offer good client care. For instance, the bank had a vast number of consumers who operate in the country’s military. However, because of their frequent movements, it was going to be difficult for them to access banking services from this organization. Through its sound customer service processes, the bank was able to detect this problem and sought an effective solution towards it as soon as it could. The company launched mobile banking services to military service men in areas such as Manikfarm and Chetticulam.
The company did not win the brand of the year award for nothing. Its positioning is actually based on consumer demands. (Levine, 1999) This is done through its marketing processes where it makes a point of adequately informing its consumers about the kinds of products that it has on offer. The company has also gone out of its way to study how consumers make their decisions so that it can reflect this in its service offerings. The bank has built strong relationships with clients that have gone a long way in making them ‘valued assets’. This latter mission is normally achieved by making most of the bank’s employee’s deal personally with consumers. Restructuring programs are quite common within this institutions and this has shown the importance of placing consumers first.
Information technology is one of the most fundamental aspects within the banking industry and the same goes for Sri Lankan banks. It can therefore be a crucial source of competitive advantage. A series of financial service experts assert that there is a crucial link between IT innovations and financial success. For instance a study carried out by Broderick and Vachirapornpuk (2002) found that technology – especially the internet – can be key tools for improving service quality. The Survey focused on the United Kingdom and found that the internet can bring substantial challenges in delivering effective service quality especially because of the remoteness of this form of technology. After thorough analyses of banks employing internet banking, it was found that the latter institutions have the capacity to turn around such obstacles if they made their consumers more involved in these processes. It was also found that the nature of consumer involvement in those ventures can go a long in assuring high returns for concerned organisations. (Smith & Wright, 2004)
Financial service providers are highly dependent on IT because it has been shown that service or product offerings have the potential to be revolutionised as long as these institutions place innovation first. For instance, diversity of product offerings can be achieved through information technology without necessarily resulting to further expansion. (Harris, 2006) This is the reason why People’s bank has introduced mobile banking services to selected consumers. By doing this, the company was able to bring its services close to the groups that needed them without necessarily building physical facilities. This was cost effective and vey business worthy.
Online banking has been a lifeline within the baking industry. This is because it eliminates the need for carrying out a lot of manual work that takes up company resources (Jayamaha, 2008). People’s Bank has embraced online banking with full force. One only has to visit the latter company’s website to see just how true this is. First of all, the company has summarised all the major aspects of its operations in its web page. For instance, one can find all the issues concerning its job vacancies, its supplies sector, its assets on sale, recent corporate social responsibility activities, its financials, its partners, development banking services as well as treasury services. Consequently, consumers need not line up in the bank’s branches for this information; employees are freed up to handle other aspects of production that cannot be automated (Perry, 2006). Also, online banking has facilitated real time exchanges as consumers can now apply for certain services no matter the time.
The company’s Visa credit facilitates has also gone a long way in making it stand out from amongst its competitors. Consumers can now enjoy services that they could not previously access and this has drastically improved the company’s profit margins. This is especially true for those clients who happen to be highly mobile and may not have the ability to access traditional bank offerings.
One cannot discuss the importance of IT in banking without looking at how this concept assists in mitigating of potential dangers that can arise out of loss of data. Several banks within the international arena cannot operate without this sort of system and the same goes for People’s Bank. The latter financial provider has instituted a series of back up systems that are designed to provide continuity within business. This has contributed towards encouraging consumers to bank with the institution because they are assured of the security of their transactions or their information from any kind of loss. Studies have shown that back up systems raise productivity levels within such institutions although the benefits of such systems may take a while before materialising as costs of acquisition are a serious concern.
The People’s bank has also shown how IT can be critical in boosting financial performance by synchronizing various banking functions. The bank had a vast network of customer delivery outlets. (Perera, 2009) Consequently, it needed to look for strategies that would assist in centralizing and coordinating these systems. The latter problems were prevalent some four years ago. At that time, the company could not just embrace any IT solution because it had to handle the problem of cost. In order to do this, the company had to seek a method that would assure them of a return on their investment especially returns on incorporating some of their rural networks as soon as possible. In order to handle this challenge effectively, the company chose to outsource the process to a renowned IT systems provider known as Silverlake. Sixty percent of the networking process was allocated to the latter group while the rest of the work was done in house. (Kumar, 2005)
Because of choosing to pursue the latter strategy in IT, People’s bank has enjoyed several benefits that have been reflected in its performance. Firstly, the company fully centralized its systems thus allowing workers to access information from various categories of clients so as to make the most of their underlying business functions. This has eventually led to increased consumer satisfaction since consumer transactions carried out in one branch can be easily accessed by other branches. Aside from that, it has also promoted efficiency in service offerings because now consumers no longer have to wait as much as they used to get loan approvals or other similar issues. Also, it has been shown that the bank no longer needs as much personnel to offer certain basic services to its consumers. This has been made possible by the fact that its systems are now well coordinated. Additionally, the bank currently boasts of a more lucrative SWIFT messaging system that has dramatically improved the way the business carries out its underlying changes especially those ones related to the high stakes business performance parameters.
It should also be noted that IT provides a platform for several innovative services from time to time. People’s bank has made use of this aspect by introducing such services. For instance, the company has embraced e-remittance web based products that have assisted consumers who are interested in making remittances to Sri Lankan locations. This has been possible through collaborative services with corresponding banks in key states such as Qatar, Kuwait, Israel, Australia, UAE and Saudi Arabia. This system has worked especially well for individuals within the country as it is not mandatory for them to possess accounts with the bank. Such services would not have been possible without sound IT coordination and this has contributed towards boosting profitability as it is an additional source of revenue. (ECJ, 2009)
IT and customer service provide banks with very solid ways of having a competitive advantage over their clients. This is because of enhanced consumer response, better operational efficiency and elimination of manual work. (Westerfield & Jaffe, 2005) Although the bank is yet to reach international standards, one cannot ignore some of the positive strides that it has made in these two areas thus explaining why the company has been highly profitable in the Sri Lankan banking sector. The latte literature review however lacks some of the real time depictions of IT and customer service. Also comparisons with International banking standards have also not been covered by several writers. This will be covered in subsequent aspects of the research.
References
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