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Notwithstanding the debate over the price (to the taxpayer) and whether anyone seriously considered re-mutualisation, how will Virgin Money nee Northern Rock win over customers?
The Great British Bank customer is notoriously quick to complain, glacially slow on switching accounts even with institutions that so many say they loath and despise, although the banks have not helped by making switching such a difficult process. Richard Branson comes into the retail banking scene with his famous reputation for shaking things up with innovative products and a passion for customer service. Could old customer ties be finally cut?
But pause a minute. Remember the last time Branson was going to transform the financial services market with the Virgin One account? As some papers reminded me today, this venture secured only around 20, 000 customers over several years and was quietly sold off to RBS.
Great customer service is hard to achieve in any organisation and especially those that sell complex products to a wide variety of customers with most of the revenue coming from hidden charges. And as his Virgin Trains operation has suggested, even the Branson Empire isn’t immune from the customer service challenge.
So, the new Virgin Money bank faces an uphill task and any serious commentator should take a shovel or two of salt to the bank’s claims of being a new force on the high street with 70 or so branches.
But, let’s also be clear that 2012 should be a watershed year in retail banking and financial services that offers opportunities for institutions with a customer centricity savvy. If as expected the contents of the Retail Outlook report are realised and pursued rigorously by the new regulatory authorities, financial services are going to have to overhaul internal processes. Products will need to meet a higher standard of design and be subject to more intense scrutiny, and hidden charges will become more transparent.
So perhaps a smaller, more agile organisation is better placed to respond and thrive in such regulatory conditions? Perhaps; but the cost of compliance will weigh heavily on the operations of all banks, forcing greater operational efficiencies while simultaneously raising the quality of customer service in real terms. And this applies to old warhorses and newly minted challengers like Virgin Money.
The solution lies in exceptionally well run businesses that put customer outcomes at the heart of every process every time, always. Sounds like nirvana but it can be achieved if organisations rethink their systems and software using agile business solutions, either in-house or consumed as services, to embed customer centric principles and thus begin to continuously evolve automation of processes and drive customer specific conversations at the point of interaction. This sorts out both mundane tasks and supports the more adaptive decision-making required to deliver superb service and appropriate products.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Eimear Oconnor COO at Form3 Financial Cloud
07 November
Kyrylo Reitor Chief Marketing Officer at International Fintech Business
06 November
Konstantin Rabin Head of Marketing at Kontomatik
Alexander Boehm Chief Executive Officer at PayRate42
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