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The chief Executive of the FCA, Martin Wheatley, may believe that 2013 was the year in which the financial world put aside the sins of the past; but the latest fine handed out to Lloyds Bank shows yet again the scale of the challenge facing the financial services industry. Mis-selling, forcing employees to sell out of greed or out of fear, jumping on the latest bandwagon to add a quick buck to the profit line; all should have no place in business but all were distressingly too familiar in recent times.
So if as Martin Wheatley believes 2014 is to be a year of moving on, of achieving a cultural transition which sets “clear blue water between the past and future” what changes are we going to see? Well it is hoped that the path chosen by the banks and others is not simply that of ‘changing the pay structure’. Speaking to The Financial Times, Alison Brittain, head of retail banking at Lloyds confirmed that “uncapped bonuses, disproportionate payouts, demoting staff who missed targets” have all been swept away in favour of customer service. Other banks too have confirmed that bonus payments are more likely to be based on customer service or satisfaction levels.
But the question has to be asked whether the banks and others have truly changed or whether they have simply exchanged one millstone for another. Does customer service truly mean providing an exceptional experience for customers or will it be a target driven, individually measured, silo’d standard which rewards those who see x number of customers in a set period and who persuades them to take up y products which of course will ‘be good for them’?
The danger is that taking measures such as changing pay structures or measuring customer service is simply scratching at an itch without doing anything to understand the root cause. They are easy changes to achieve, give the PR people something to write about and look good in annual reports. But unless the underlying culture undergoes a fundamental change the same old patterns will simply repeat themselves.
If financial institutions are to change, to move away from “ethics of obedience” and towards “the ethics of care and the ethics of reason” which Martin Wheatley asks of them then something more fundamental is required. We can’t go back to the olden days in which your bank manager was your manager for life, knew everything about you and advised you individually. We shouldn’t even try because the world has moved on and what worked then is not appropriate now. But the principle of taking time to understand customer needs, taking accountability for every aspect of a process and truly making life as easy as possible for the customer is as relevant now as it was then.
Service is one thing, but if you don’t align your process and your organisation with what your customer needs then you may be fooling yourself that you have delivered good service (backed up by your own internal service metrics), when actually all you have done is provided a functional / operational service which often only delivers part of what the customer needs. The danger of rewarding by individual customer service measurement is that whilst staff may be able to deliver a good service for the small bit that they are responsible for, the overall experience falls down. Silos, blockages, staff not able to take accountability for every aspect of a customer query; all are failure points and all will result in an attempted resolution which descends into farce as the customer repeats their query over and over again, provides documents which are lost, tells the n’th operator that they have followed y process only for their query to be mis-routed with incorrect or insufficient information passed on.
What is required is for employees to be given responsibility and accountability, to be trained in dealing with customer issues and complaints and to be allowed the time to truly understand what is required, to devise solutions rather than flog products. But the sad thing is that as banks are proclaiming that they have embraced change we and others of our acquaintance have even in the past few weeks experienced the same old derisory levels of service from a variety of institutions. The fines may have been paid, the PR may be in place but same old, same old is all that customers are seeing.
Culture, standards, ethics, opening up to innovative ways of thinking; all start from the top. Right now the banks are paying the financial price for more than a decade of poor practice; but their customers and the wider society are also the poorer. Only when the words stop and the cultural transformations start will we truly see a change.