Is Customer Experience innovation too hard for UK banks?

When you read a definition of Customer Experience you invariably will see two elements – the lifetime experience of the customer, and the total experience of the customer day to day as he engages in transactions with the provider of the goods or services he is utilizing. In meeting continuously with UK banks over the last two weeks I find an almost unhealthy obsession with branch experience as the be all and end all of the customer experience challenge. It is as if a poor customer experience across any other channel can be solved simply by a customer walking into a branch having a great service experience. I just don’t buy that.

Last week when I was interviewed on CNBC the issue of Lord Levene’s “Project NewBank” arose, where his stated goal is to primarily recreate the branch philosophy of the 1960s and 70s where a customer walking into a branch is recognized by the local manager, and given personalize ‘back-to-basics’ service.

“Hopefully we can give them all a proposition this time that is fairly straightforward, where when they go into their local branch they know who they are; if they don’t want to go into their local branch they can go on the internet; if they want to phone up they can speak to someone they know – hopefully not a different person every time they call…” - Lord Levene, Chairman Lloyds of London

Hang on…what is different about this to my bank today? Someone knows me in the branch, or I can get to the same person every time I call?

There seems to be a perception today in the UK that all that is needed to fix the poor perception of banks today, is to offer better service through the branch and telephone. But there are a bunch of other issues.

Convenience and expedience are core drivers

When a distribution team in a commercial bank look at the possible locations of a branch for a bank – what are the parameters? Primarily the key concern is being able to maximize traffic through the branch – so the real estate must be in the most convenient location for customers to get to, to park (if they have to drive to get there) and to visit the branch. The other concern is obviously the key segments the bank wants to attract to that branch – i.e. High-Net Worth customers, Mass Affluent, SMEs, etc. The problems associated with decision on branch location today, however, are complicated by the fact that individuals are increasingly less likely to want to take their lunch hour to visit the branch, and that on the weekend or evenings when they have time the branches are closed. Thus, we see banks like Metro Bank seeing their differentiation in opening hours (7 days a week, open late) and the fact that they know your dog’s name.

Metro Bank says opening hours will be a key differentiator

The problem is people aren’t visiting branches as much as they used to because when you look at their core drivers in getting stuff done, namely expedience and convenience, the branch simply is no longer the best choice. In fact, if we offered decent customer experience through web, mobile and call centre, I believe it’s likely that branches would be under even more pressure today. That’s because as a customer when I think about banking I am task oriented – I’m thinking of the quickest, most expedient way I can get something done. I’m not thinking I’ll go down to a ‘branch’ because someone will know my name, my dog’s name or that they are open at 9pm in the evening. The question always is – how do I get this done the fastest most efficient way.

But isn’t it about a rich face-to-face interaction?

There are times when you need to see a human being. I’m told by bankers repeatedly that this is the epitome of the bank-customer relationship, where you meet your banker and have the opportunity to have all your problems solved. This is the core value of the branch customer experience. Where you get that level of service that you can’t get through an ‘electronic’ or ‘alternative’ channel. This is where bankers want you, I’m told, because when you meet with a relationship manager or a teller, there is a cross-sell and up-sell opportunity, which are critical metrics for banks today.

That’s all well and good but let’s look at the reality.

I’m a “Preferred” customer of three different banks, in three different geographies. I have a relationship manager with each of these banks, either as an SME customer, or as a High-Net Worth individual with a core AuM that makes me theoretically of value to the bank as an ongoing relationship. So do I get a better experience face-to-face? Does my preferred status make my banking experience better?

With at least two of the three major banking relationships I have, my relationship manager has changed at least twice in the last 12 months. For one of these banks I’ve had only two contacts from them in the four years that I’ve had a relationship as a ‘preferred’ customer – the first when I joined and the second when my balance slipped below the minimum level and they sent me a warning letter to ask me to top-up my account!

See the reality is this – as a relationship manager for HNWIs in the Mass Affluent or SME space, I probably have somewhere between 200-400 clients assigned to me on average. That means I don’t have time to give my customers advice, let alone invest time in a relationship where I give them good advice. Clients are simply a possible source of monthly sales revenue – which keeps me employed. Keep in mind this is a dedicated ‘relationship manager’ which is what the banks tell me is a source of differentiation in the customer experience.

Then if we talk about face-to-face interactions for the average customer with a teller at a branch – is this really a positive and pleasant experience? The reality is that today most customers are probably just as informed as tellers about the sort of product they are interested in because they already researched it quite heavily before they’ve walked into a branch. It would be hit and miss as to whether a teller or RM would actually be able to give you ‘advice’ or support that would differentiate the experience at the frontline in my humble opinion.

It’s the total customer

The sooner UK banks get over their fascination with branches as the centre of the customer relationship and start to see all channels as equals when it comes to solving the needs of customers today, the better off they and their customers will be.

To that end, I see banks working to put in place direct channel teams, and I see more of a focus on ‘customer experience’. But what I don’t see, is a way for banks to innovate the customer experience across the bank. P&L support for mobile, social media, internet and other such elements of the customer experience is still woefully inadequate because their real-estate based big brother still takes the absolute lions share of $$$. So what’s wrong is that the P&L has not yet caught up with the customer. That’s not a measure of willingness to support innovation, that’s a reality of entrenched structures within the bank that don’t want to lose the piece of the pie that they already have.

Ask a head of branches how he feels about losing 20% of his annual budget to support ‘direct’ channels and you’ll find out very quickly what I mean…


  1. Hi

    Don’t talk to me about the UK banks – they are driving me up the wall can’t see further than the end of their noses. I have a huge amount of business colleagues who need help from the banks to move forward in these hard times. I am lucky in some respect I have direct access to my Bank Manager however on thinking about changing banks for one of my businesses it took me about two hours to finally find the right person to talk to. If we charged these by the hour for time wasted we wouldnt need to ever work again!!Actually it would be good to measure this on a UK scale.

    I have been trying to raise finance for a new product to help businesses measure sales and help retain profit- banks absolutely love it but when parting with their money – well thats a differrent matter. I have one friend who as over £2million pounds of signed contracts and the banks wont lend him the £200K to get this to market. The banks have had the good times and made us pay for it – if they dont help soon there wont be any money for them to loan – when will they wake up and smell the roses.

    My working background started in banking in 1968 , when you built up a rapport with you customers and got afeel for them as people and their capabilities. The internet banking is good in some respects but when you are dealing with people’s livelyhoods face to face contact is so important. AS THE ADVERTS SAY – COMPUTER SAYS NO!!!!

    Sorry rant over!

  2. Brett King says:


    Fair enough, I agree. In fact, the “Bailout” in the US and the UK was supposedly about creating liquidity for lending to consumers, but that just never happened.

    On your point of face to face, that all works good if you are going to get the service you need. I just don’t think face-to-face guarantees service these days.


  3. Pat Pending says:

    back in the day (rose coloured spectacles?) there were far fewer people using banks branches and there were more branches. Now we have lost many of the great unbanked – thanks to payroll, rather than anyone actually wanting to become banking customers.

    Whilst people have been driven into branches/to ATMs the under 40′s generation has not had this migration and just wonders what branches are all about. Their experience ends after the first visit to an ‘advisor’ that either is selling the banks products as though there is no competition, or the transaction (including getting to and from the branch) takes most of a lunchtime to complete.

    Unless the banks radically change their branch experience (and the wider banking experience) the tumbleweed will be blowing across the banking floor within 10 years.

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