Wednesday, September 3, 2008

Bank customer service

Banks are notoriously bad at customer service. They know they have customer lock. People are less likely to change banks than get divorced according to the oft-cited dictum. [I do not know the original source and can't vouch for the data.]

But today I am having one of those “bank customer service days”. I am a customer of National Australia Bank private bank. Private bank is an area walled off for the "important" customers.

I need something very simple. I need a set of interest statements for my own account and the family trust for the 2006-07 tax year – and I need them in a simple form.

Surprisingly the bank cannot deliver.

This seems odd.

Moreover I am starting a hedge fund. I need to choose banking arrangements – and failure to deliver simple things to a private banking customer would rather mitigate against choosing National Australia as a service provider of any kind to a hedge fund.

So the lack of customer service is a mechanism for shooting yourself in the foot. [Banks have plenty of ways of doing that.]

For the past year all people have talked about is bank balance sheets. When insolvency beckons customer service comes second.

But if anyone notices their bank is improving their customer service let me know. Its always interesting to find a bank which retains its customers by making their life better rather than by offering looser credit terms or higher term deposit rates. Besides such banks are likely to work better for shareholders as well as customers.

John Hempton

3 comments:

Wille said...

I live in the UK, and I changed banks at the end of last year (from the woeful Royal Bank of Scotland).

The reason was not so much poor customer service (as you'd expect from a bank), but the fact that customer service and banking had become a real liability:
The bank would loose paperwork left with them (5 out of the last 7 documents left with them evaporated and never got acted on), they would not pay any interest due to me, and they would make outbound payments without references and sometimes twice (I got a penalty fee from the taxman, because the bank omitted the payment reference when I paid my tax).

I know, not much help for you, but as a comment I think it is telling to the state of banks - when their customer service is so bad it becomes a liability and financial hazard to their clients.

John Hempton said...

Thanks

When you have done as many mergers as Royal Bank of Scotland - then something has to be wrong.

The funny thing though - Sir Fred Goodwin (a man I think has a claim to being the worst bank CEO on the planet) does have a good reputation for one thing - meeting post-merger cost reduction targets.

I am not surprised - but somewhat disheartended to hear your story from the coalface.

The stock is cheap and scary. You tell me that there is plenty of work to do.

J

Quarrel said...

John,

If you find a (local, ie AU) answer, then mention it here on your blog.

I tend to think that Felix is probably right, and the NAB and "Private Banking" will probably never be a good match.


--Q

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