Despite expending significant effort and resources on making branches more like stores, retail banks aren’t seizing every opportunity to win over prospective customers, according to the J.D. Power and Associates 2008 Retail Banking Mystery Shopping Study.
The study found opportunities for improvement in three key aspects of the customer experience of shopping for a new bank: the new account experience, a customer-friendly retail environment and ease of accessibility to branches.
The study is based on responses from more than 475 trained mystery shoppers who audited assigned retail bank branches. The mystery shopping research evaluates bank branches across a variety of performance measures, including facility, tellers and new-account inquiry.
The study found that when prospective customers meet with bank representatives to open an account, one-third of representatives, on average, do not shake hands, and one-half do not smile during the initial introduction. In addition, 14 percent of shoppers report that the new-account representative did not give them their full attention as prospective customers.
“Smiling and shaking hands with a prospective customer are easy things to do that should be delivered 100 percent of the time,” said Rockwell Clancy, executive director of financial services at J.D. Power and Associates. “Overlooking these simple gestures conveys a lack of respect for the customer or disinterest in their business, and can destroy the foundation of a relationship before it’s even started.”
The study also found that while new-account representatives ask only an average of five profiling questions in assessing customer needs, when typically a broader range of inquiry is needed to adequately recommend the appropriate product to fit a customer’s situation.
“Ideally, a new-account representative should assess customer needs and offer several product options before making a recommendation—which occurs at 64 percent of banks,” said Clancy. “However, 20 percent of representatives only offer one option, and 16 percent give options without providing a recommendation.”
The study also found that 21 percent of new-account representatives fail to ask shoppers if they want to open a new account at the time of their visit.
“Not seizing the opportunity to invite shoppers to become customers can cause banks to lose business,” said Clancy. “Ultimately, you have to ask for the business to close the sale.”
Components of a customer-friendly environment—such as receiving a greeting upon entering a branch and complimentary amenities—are also lacking at many retail banks, the study found. Only one-half of shoppers report being greeted upon entering a branch. Additionally, only 42 percent of branches include amenities such as refreshments, televisions, play areas for children and computer access, which are all important in enhancing the overall customer experience and in easing wait times.
The Retail Banking Mystery Shopping Study also found that retail banks have an opportunity to improve customer satisfaction in parking facilities they provide customers. Overall, two-thirds of shoppers indicate that parking was “extremely easy,” while others report more difficulties for the following reasons: the bank was in a downtown metropolis location; the branch was part of a larger building; there was an absence of a parking lot or garage; customers had to use a pay parking lot or garage; or shoppers had to park a long distance from the branch entrance.
Ease of accessing a branch is more important to overall customer satisfaction than both the number of bank branch locations and the branch hours, according to findings in the 2008 Retail Banking Satisfaction Study.
Stillwater National Bank
Deposits Ranking Misplaced
In a story on uninsured deposits at banks with branches in the Tulsa Metropolitan Statistical Area in the Aug. 18, 2008, edition of the Tulsa Business Journal, Stillwater National Bank topped the list of “Banks With Most Uninsured Deposits in Tulsa MSA.”
Actually, SNB is not based in the Tulsa MSA and should more accurately have been listed in the category, “Other Oklahoma-Based Banks with Tulsa MSA Branches,” where the bank would have ranked third.
Uninsured deposits are those that fall outside of the Federal Deposit Insurance Corp.’s normal $100,000 and $250,000 insurance limits. The amount of uninsured deposits has no bearing on the health of a bank, and FDIC data estimates that 39 percent of all deposits in FDIC-insured institutions was uninsured at the end of 2007.
SNB is based in Stillwater in Payne County, which places its headquarters outside of the Tulsa MSA. SNB is also a participant in the Certificate of Deposit Account Registry Service, or CDARS, program, which gives depositors access to FDIC insurance on accounts exceeding the normal limits for coverage.
Offers CU Deposit
Communication Federal Credit Union recently rolled out a new product, CU Deposit, which works in conjunction with its online banking system, CU OnLine, and allows consumers the ability to remotely deposit checks.
“The product is easy,” said Communication eBranch Manager Christina Titterington. “Any Communication member with an internet connection, computer and scanner can now deposit checks directly to his or her Communication account from a home or office. You simply log into your account, select the product and scan both sides of the check. Once you’re done, you shred it.”
CU Deposit works through Communication’s multi-authentication home banking system and is actually much more secure than sending a check through the mail.
Communication Federal/Communication Credit Union has more than 47,000 members and over $500 million in assets. ?