The final analysis Recession will force financial firms to take a look at the basics.
Banks must embrace concept of good customer service
Numerous studies have addressed the relationship between service quality and customer satisfaction, and most analysts agree that companies that make customer service a priority generally have happier (and more loyal) customers. Indeed, exceeding customers' expectations is paramount to long-term success, no matter what sector a business is in.
The UAE banking industry is highly competitive, and its customer base is savvy and educated. One would assume, therefore, that the UAE's financial market place is an unforgiving environment; if an institution loses credibility by offering shoddy service, it should, simply put, lose customers to a competitor. But this is not necessarily true. If it was, it wouldn't have taken a recession to shift the focus of UAE banks from customer acquisition to customer retention. Ethos Consultancy's 2009 UAE Bank Benchmarking Study, which was released last month, reported that overall customer satisfaction levels in the UAE have increased by almost 10 per cent over last year.
This is commendable, but you have to ask why banks waited until there was a global economic crisis recession before focusing their attention on the quality of their service. A high level of service should surely be a prerequisite for participating in such a competitive industry? The banking industry has been changed forever by the credit crisis, with issues of trust, brand credibility, customer attrition and the resulting falls in revenue trailing in its wake. While banks are marshalling resources to raise capital and cut costs, they must not overlook their lifeblood: retaining customers by exceeding expectations.
If banks had integrated quality of service into their charters from the minute they opened their doors then perhaps this customer-centric philosophy might have mitigated the damage caused by a collapsing economy. One bank that seems to have embraced quality of service from grassroots to boardroom level is RAKBank. It set its stall out from the start to differentiate its business on customer service. The fact that RAKBank has now won top spot in Ethos Consultancy's customer service four years in a row is a testament to its dedication to customer service.
And while there is no way of directly linking the two, RAKBank reported a net profit of Dh530.66m for the nine months through the end of September, a 10.40 per cent increase compared to the same period last year. Another noteworthy performance in our study came from Dubai Bank. It finished in second place overall, a substantial improvement on its 21st-place ranking last year. This jump to the second spot is a reflection of the institution's commitment during the past 12 months to developing a customer-focused strategy. The bank has invested heavily in training and employee engagement and motivation, and as a result its associates are more productive, resilient and resourceful. Training programmes put into place have led to a higher level of problem solving, and Dubai Bank officials say the stress level of its staff is much lower than it was before the training scheme. One of the biggest influences in this area was the recognition of excellent performance among employees. Recognising and rewarding a particular act leads to that act being repeated on a regular basis.
Another area in which UAE banks have generally failed is their ability to deliver customer service via their websites. Our study's customer satisfaction score for banks' online portals increased to 47.7 per cent this year, from 47.4 per cent in 2008, a miniscule amount. The inability of banks to capitalise on web-based customer service solutions seems to highlight their often slipshod approach to quality control.
We feel strongly that banks in the region need to instill a culture that is the embodiment of good service. Educating, training and engaging employees so that they develop into energetic problem solvers is the first crucial step. Banks that grasp the challenges of these uncertain times by realigning themselves with this new reality, and remember that "the customer is king", will be the ones that prevail in the UAE.
Barry Judge is director of marketing for Ethos Consultancy, a UAE-based customer-service advisory firm