Millions of High Street bank customers would be likely to switch providers if it was easier to do so. That’s the key finding of an investigation into customer service in banking released by SAS, following research and analysis by YouGov, Henley Business School and Ovum.

According to the poll, 38 per cent of High Street bank consumers have never switched their main current account and 65 per cent believe banks are failing to improve customer service. At the same time, however, almost one third said that if the process of moving their primary current account was made easier, they would be very or fairly likely to change their main current account provider. Under new legislation, the switching of customer accounts and redirecting of direct debits will reduce from 31 days to seven, as recommended by the Vickers report.

Banks have been slow to improve their use of data and understand customer behaviour due to other pressures that are being given priority. A separate survey of European banks, conducted by industry analysts from the financial services team at Ovum and commissioned by SAS, reveals that banks are currently focused on meeting regulatory demands as opposed to customer service. This is diverting management attention and project priorities despite a desire to deliver on customer promises. The irony, according to the Ovum study, is that many of the pain-points in addressing compliance are common with those in customer experience, and solutions could be leveraged to meet both objectives. This view is supported by the Henley Business School, which finds that there is a desire to widen the use of customer data. However, very few companies have the core IT systems to tackle the big data challenge that they face, as supporting the post financial crisis business strategy takes precedence.

Both the research from Henley Business School and Ovum find that in order to improve customer service banks need to undergo a culture change, replacing a focus on product-led selling with a focus on providing the services that customers demand. The studies contend that banks can improve their understanding of consumers and service them with relevant products and services by harnessing the data already in their possession.

Barrie Neill, retail banking consultant, SAS UK & Ireland, comments: “Consumer churn rates for retail banks have traditionally been in the range of two to three per cent; this is set to change as new legislation transforms retail banking into a competitive industry, akin to telecoms or retail. Banks are sitting on a rich history of data about customers but continually struggle to harness this data to provide services and products relevant to each customer. The simple solution to this is Big Data analytics, which will integrate their customer database with transactional product systems, providing the banks with a clear view on the most appropriate and timely services for their customers. The YouGov survey found 36 per cent of High Street bank consumers would be very or fairly likely to provide more personal data to banks if they improved the service they received. Only by harnessing this data correctly can banks gain greater insight, improve service levels and cross-sell more effectively.”

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