Customer experience in Spanish Banking

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There is an interesting movement happening in Spanish retail banking and it involves what on the surface appear to be three contradictory offers; a move to digital operations, the development of offers more aligned with personal service and the adoption of the principles of customer experience.

I say contradictory simply because moving to digital channels would assume less personal contact and personal service, and the idea of personal service is not necessarily aligned with good customer experience.

In respect of the digital operations, this is interesting for two reasons; firstly, Spain’s retail banks have been historically very focused on their branch networks and secondly, alternative channels for retail banking have been around for more than thirty years and an established point of view in terms of bank usage patterns for customers for most of this time.

[/su_column] [su_column size=”1/2″] Personal service has always been a big part of the promise for the Spanish banks but I believe that this manifests itself in individual customers having individual relationships with specific members of a bank, not the bank itself.

The move to the bank being the point of trust in the relationship, rather than a family friend who happens to work there is going to have a huge impact on the culture of most Spanish banks. The sudden emergence of customer experience or CX as one bank likes to call it seems just the latest in a long line of marketing ploys to create some level of superficial differentiation from the competition.

The issue here is all the banks are jumping on the bandwagon, is this just image enhancement or is there real change afoot?

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There could be several reasons for real change about to occur: the size and general inefficiencies that exist and have existed historically in the Spanish retail banking sector is now too much of a burden for the banks particularly when you look at this in conjunction with the general banking crisis that is still in full flow and is not expected to drastically rescind in the near future. Secondly the Spanish authorities responsible for the restructuring of the banking system along with the European Union and the terms of the various bail-out’s is forcing some of the marginal players to reduce the size of their branch networks.

The bigger players might see this as the catalyst to act in line with an industry that is going to generally have smaller networks.

Also, the emergence into the mainstream of a number of foreign operators who have mostly online or alternative channel services with very little physical presence, and who are capturing a large proportion of upper mass market customers, and from an initial simple proposition that encompassed just a single offer, deposits or credit cards, are becoming a better choice for the individuals primary banking relationship.

[/su_column] [su_column size=”1/2″] [su_quote]. . . Spain is seventh from bottom of the global rankings for Customer Experience with just 34.4 % of customers feeling they have a positive customer experience.[/su_quote]

Additionally there are other non-bank financial services providers taking a very large proportion of the market in basic financial products, specifically personal loans and credit cards. This business is mostly online or delivered from existing retail outlets.

It tends to be simpler than with banks, and generally more convenient for customers, and these operators tend to have more trust from their customers which stems from a better understanding of their customers and their buying habits which enable them to offer products that are more relevant to the customer’s day to day needs.

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Finally there is the growing influence of pay day loan companies. Again these are mostly delivered on-line, are simple for customers to understand, and many people would see these as an option even before they would talk to a bank now, particularly as the banks have tightened the strings on credit applications.

As the banks here start to enter this period of transformation, what are the issues for them?

Let’s start from the point of view of the current state of play in the Spanish retail banking market. A recent study by Cap Gemini and EFMA, (The World Banking Report 2013) which focuses on customer experience globally put Spain seventh from bottom of the global rankings with just 34.4 % of customers feeling they have a positive customer experience.

To put this in perspective, Canadian banks had the highest rating with 60.8% positive.

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Generally speaking, the public do not have good experiences with their banks; the country with the best customer experience is still falling short for almost 40% of its customers.

the same report shows that 51% of customers across the survey are considering leaving their bank within the next six months. When the survey measures the absolute ranking of customer experience, Spain is actually third from bottom, and the numbers in respect of positive experience is actually lower than the previous year.

A separate test survey in Spain undertaken by Senteo showed the Spanish customer experience to be significantly worse than the Russian market, where Senteo have undertaken this survey for the last six years.

Although two surveys does not absolutely define the poor state of the banking sector in respect of customer opinions in the country,

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a quick trawl through various other surveys for; customer satisfaction, loyalty and approval ratings all give a similar picture.

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Bearing this in mind if the banks are delivering such poor service when directly faced with customers, how are they going to fare when they move to a contactless point of view?

Relationships are one of the key elements to customer trust and loyalty, and it would seem that banks here in Spain are unable to build relationships when they have face to face contact with customers, but this is not the true picture.

Most Spanish banks have already turned away from direct contact with their customers in most situations, which probably accounts for the poor scores in the various surveys; every Spanish bank has a reasonably effective internet banking service, telephone banking is very common, and there is a very large network of ATM’s almost always located on the branch exteriors.

Also the opening hours for personal service, is still stuck in the dark ages in Spain.
[/su_column] [/su_row] [/su_tab] [su_tab title=”” anchor=”Five”] [su_row] [su_column size=”1/2″] The vast majority of banks close at 2 or 3pm. just at the point where people are going to lunch and possibly have the time to visit a bank, at that point though either the bank is closing or in my own personal experience half the staff have already left for lunch and there is a queue reaching around to, well basically, Portugal.

So if you need anything more than transaction services most people have to take time off work to resolve financial problems, so moving to remote channels for most customers is a no brainer.

Being fair to the banks, some are changing, and generally most service providers close for two or even three hours for lunch. If you want to buy a car, or look for a home, it is highly unlikely that you will be able to do that unless you take time off work because car dealerships and estate agents also rarely open for more than a few hours on Saturday mornings.
[/su_column] [su_column size=”1/2″] All banks offer more or less the same in respect of products and services, they nearly all have the same inconvenient opening hours, and if you actually want to change to another bank they all make it equally as difficult to both firstly leave your current bank, and secondly to arrange everything in the bank you want to move to.

Again I return to the question, if the banks cannot deliver customer service when they are focused on customers being in the branches… what will it be like when they are not and how does this bode for creating positive and memorable customer experience?[…]

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