It’s getting worse. The latest edition of a global consulting and advisory firm’s annual consumer banking survey showed that customers were significantly more likely to switch banks (12% versus 7% in the previous year). The increase in the proportion of customers using three or more banks, and matching reduction in the number of those with only one, clearly indicates that loyalty is on the wane.

The study also found that improvement in online and mobile banking was a big factor in customer satisfaction, second only to pricing. Since the banking industry seems to be acting in consonance with this view by investing in high technology channels, where does the problem lie?

In my view, it’s in the delivery of service at the last mile. For instance, while channel-based customer service saves time for both banks and their customers, does it resolve complaints completely and to the satisfaction of customers? To answer that question, let’s take a look at who’s behind the service desk; there’s a strong chance that we will find a young service representative with limited banking experience, who doesn’t have the knowledge or authority to resolve tricky issues. Now consider the fact that most surveys say that customers turn dissatisfied when their queries aren’t addressed on phone or the Internet. It’s easy to put two and two together.

How long is it before customers start to leave? Although it is hard to put a number on it, it is clear that customers do move in search of banks with superior service and staff; it is equally clear that it is almost impossible to woo them back.

So, what can banks do to keep their customers happy?

Along with investing in technology-enabled channels, banks must strengthen their human channel, by deploying experienced personnel at key positions (within their physical and virtual infrastructure both), and empowering customer service staff with training and tools. They must also closely monitor the pattern and resolution of queries, and repair any weak links in the customer service chain. These investments will more than pay for themselves by way of higher customer loyalty and satisfaction.