Retail Banks Fail To Make the Most of Sales Opportunities, Says New Global Study

Index reveals the performance levels of 100 banks across 17 countries.

London, 13 June 2007 – A new Booz Allen study “Striving for growth: Best practices in retail banking sales and service channels” has revealed that the majority of banks are failing to fully meet customer needs and maximise sales channel performance. The comprehensive study, which used customer research and mystery shopping to assess 100 banks across 17 countries, looked at what customers want from their banks, how banks are performing and best practices to drive profitable growth. Based on the findings of this research the Booz Allen Revenue Enhancement (BRE) Index was developed, taking into account performance across branches, call centres, online, mobile sales forces and a multi-channel index.

Consumers prefer purchasing in branches, but affluent customers are leading a trend towards online. Despite technological advances, globally customers still prefer banking in branches – 63% choose to use a branch for purchasing current and savings account products and 54% choose their branch to purchase mortgages. However, branch importance is in relative decline. For purchasing less complex products, such as credit cards, over half would now use an alternative channel with 21% purchasing online and 16% by telephone. Online channel usage is rising and is preferred over phone, particularly for simple products and transactions. The trend away from the branch is being lead by affluent consumers, who tend to be time poor and are 30% more likely to prefer using online services.

“The branch is declining in importance, but banks are failing to capitalise on the enormous potential of key growth channels such as online and mobile sales forces, because the performance of these channels does not meet customer needs and expectations,” said Alan Gemes, vice president at Booz Allen Hamilton.

Retail banks are performing best in branches and online, but call centres and mobile sales forces do not meet key requirements. Across all channels there is a significant difference between the performance of the best banks, which show near excellent service, and the rest of the pack. The study found that the need for differentiated offerings for affluent customers was a common theme across all channels.

“The growing mass-affluent market means than banks need to develop their premier service offerings. The best banks are providing dedicated staff and floors in their branches, separate call centre facilities, premier websites and segmented mobile service offerings,” said Gemes.

Banks still need to get the basics right in branches – Privacy, staff knowledgeable about products, query resolution and waiting times are the most important criteria for customers in branches. Whilst these requirements seem basic, banks still need to work on their consistent delivery. The study found that 39% of banks scored low on ensuring that their welcome desk is always available and helpful. Best practice shows banks should focus on:

Investing in the customer first point of contact by consistent use of a manned welcome desk or hotel style concierge, open plan layout with advisers ready for customers in addition to private areas (Bank of America).
Developing appointment processes whereby you can make appointments in advance (Raiffeisen Switzerland), and get confirmation by text message.
Attractive branches designed to suggest stylish hotel lobbies (ABN Amro Hong Kong) with interactive information materials using TV screens and computer terminals (HSBC Hong Kong).
Segmented offerings for the mass affluent with a sense of exclusivity with increased privacy, e.g. dedicated staff and floors (Citibank UAE).

Call centre performance is low – The most important consumer requirement is the opportunity to speak to a person. The study found that 48% of banks scored low on time spent waiting to speak to a specialist adviser and 43% scored low on agents demonstrating a good level of knowledge from the customer information available. Best practice shows banks should focus on:

Minimising hand-offs, with logical menu systems and a quick option to speak to a human being (Raiffeisen Switzerland).
Increasing product knowledge specialists by training all staff to deal with general queries and in one specialist area, with incentives to encourage staff to resolve queries in one call.
Improving access, particularly for the mass affluent, by assigning customers with an adviser they can call direct (Credit Suisse), 24hr access and instant connection (Bank of China plus other Chinese banks).

Improve segmented offerings to take advantage of online growth – Security is the main concern for online customers and globally banks are performing well, but the channel needs to develop to take advantage of the mass affluent market. The survey found that 72% of banks scored low on their segmented online facilities for mass affluent customers. Best practice shows banks should focus on:

Increasing levels of security to keep in line with customer expectations, including virtual keyboards, random number generators and complex password systems (HSBC China).
Providing dedicated websites adapted for mass affluent customers (Citibank Korea).
Tailoring web site layout to individual use (Citibank China), with quick access to regularly used areas and offering tailored product alerts and best rates available (Bankinter, Spain).
Providing live online and technical support to enable customers to submit queries and get confirmation of transactions by text or email (Bankinter, Spain).

Better mobile sales forces to drive forward expanding channel – Globally few banks offer mobile sales force services and those that do have poor service levels. Advisers are often unable to meet the key customer priority to resolve the query in one meeting and 45% scored low on the option to see the same adviser again. Best practice shows banks should focus on:

Providing clear and differentiated offerings for mass affluent customers (HBOS and Citibank, UK), with dedicated account managers who join visits (Bradesco, Brazil).
Developing sophisticated appointment systems with both generalists and product specialists and ability to meet at convenient time (NAB, Australia).
Giving advisers the ability to complete requests–connectivity and empowerment are key. Advisers should have access to customer knowledge prior to meetings (Bradesco, Brazil) and be quick to upload customer data (HBOS, UK).

Multi-channel performance is limited – Consumers choose channels on a holistic basis and, for some products, expect to be able to move across certain channels without having to repeat themselves. Although most banks achieve a consistent look and feel across channels, overall performance in this area is weak with even best in class failing to achieve excellence. Best practice shows banks should focus on:

Providing a broad range of channels, including innovative channels, e.g. web-chats, Skype (ABN Amro, Netherlands).
Offering an integrated service across channels, for example, email confirmation of call centre transactions and customer information available to advisers in all channels (HBOS, UK).

Some banks show best practice, but none are top in all channels – best performers across the 17 countries in the study are HSBC Hong Kong, Raiffeisen in Switzerland and UBS in Switzerland. There is a very wide variation in performance at bank level, but the best retail banks are HSBC in Hong Kong, Switzerland’s Raiffeisen and UBS in Switzerland. HSBC Hong Kong tops the tables for best branches and best mobile sales teams, while Citibank UK provides the best call centres. Two banks in Korea, Woori Bank and Citibank, feature in the top three banks for the online channel, while the UK’s HBOS offers the best multi-channel experience.

Hong Kong is the strongest country overall, followed by Switzerland and the United States. Hong Kong has the best performing retail banks, leading in three out of five channels: branches, call centres and mobile sales force. Hong Kong branches have developed advanced segmented offerings with high availability of specialist advisers and branches designed to suggest stylish hotel lobbies with interactive TV walls. Their call centres have instant connection to a human being and short waiting times, whilst their mobile sales advisers are available to meet anywhere at short notice.

Switzerland came in second place, with strong performance in branches and in call centres, where typically one agent will handle a query from start to end. The United States came third in the rankings and scored as the second highest country in terms of branch performance, largely due to innovative retail strategies focussed on attracting customers into the branch such as convenient opening hours, retail-like promotions and an emphasis on customer service. In other areas, Korea leads the field by a considerable margin in terms of online performance with high security levels and the UK scores well on multi-channel performance.

Going forward retail banks need to:

Provide dedicated channels (website, call centre, mobile sales forces and specialist areas in branches) for affluent customers.
Reduce waiting times in branches through the use of welcome desks (concierge concept) and the option of making appointments in advance.
Efficient call centre menus and staffing that enable customers to quickly reach people who can resolve their queries.
Enable customers to tailor websites, supported by strong security measures (e.g. random number generators).
Offer mobile sales advisers who can complete transactions at the meeting, for selected customer groups.
Enhance the ability to commence a transaction on one channel and complete it on another.