Poor retail service can create bad publicity for banks, but fixing the problem need not be a huge task.
Retail banking may not be the sector that brings in the biggest profits, but it certainly attracts the most attention when things go wrong. Flick through any Middle Eastern newspaper and you are bound to find at least one letter complaining about slow or incompetent service from banks.
One way to see where customer service is lacking is to take an outsider's view. Ethos Consultancy conducts mystery shopper visits on UAE banks, using people that match the profile of the banks' typical customers. They go through exactly the same procedures as real customers: finding a parking space, entering the branch, looking for signs, taking a number and then being served. Ethos also recruits existing bank customers to talk about their experiences, to ensure that it is obtaining a realistic view of the service level.
Banks are product-driven, but the last thing they think about is how this gets delivered.
Robert Keay, managing director of Ethos, says that mystery shoppers can be the eyes and ears of senior executives, who may not have the opportunity to see what is going on at the ground level.
"The mystery shopper's role is to establish facts," says Keay. "How long did it take to get served? When you were served, did they say ‘good morning'?" Bank branches are rated according to several criteria, covering physical appearance and the friendliness, knowledge and helpfulness of its staff.
The observations have even included tellers eating fast food during their shifts or interrupting customers to answer a personal phone call. "Liberties are being taken more in the banking sector than in any other sector," says Keay.
He believes banks can learn a lot from the hospitality sector, and is keen to promote the concept of five-star service. As part of this, Ethos can also carry out an Employee Knowledge Assessment (EKA), in which an employee chosen at random is quizzed about products and procedures. Product knowledge is crucial in the Middle East, where financial products are changing so quickly.
"Banks are product-driven, but the last thing they think about is how this gets delivered," says Keay.
"If employees struggle with product knowledge, they are also going to struggle with customer service."
However, some banks are starting to invest more in training. "One of the UAE banks is in the process of setting up an academy branch," says Keay. "That will be their best practice branch on the high street that they will use as a model for training their employees."
Keay believes that banks are now feeling pressure to improve their customer service. This is due to a number of factors, including reduced income from IPO applications and a changing customer base: more and more expatriates are staying in the GCC for the long term, for example, meaning that they are more likely to change banks if they are unsatisfied with the level of service.
"A change has kicked in during the last 15 months," he says. "The big difference I've seen is that senior people are now taking an interest in customer service, which we've never seen here before.
"Clearly, service is starting to become a differentiator. In our opinion, it will start to become the single differentiator."
Keay believes there is one bank in the UAE that stands out from the others when it comes to customer service - the winner of last year's Ethos banking survey, RAKBANK. "Not only is there a vision, there's the delivery of that at the grassroots level," he explains. "I know for a fact many of the other banks now target RAKBANK's staff for recruitment. It's a compliment to RAKBANK."
Graham Honeybill, general manager, RAKBANK, says that the bank tries to keep its products and processes as simple as possible in order to make life easier for its customers.
It also tries to minimise queues in the branch by finding out what services are in high demand.
Clearly, service is starting to become a differentiator.
"Business is cyclical in the Gulf and there is a period at the end of every month where every bank is very busy," says Honeybill. "We have in every branch an individual whose job title is meeter/greeter and when we have queues it's part of his or her job to walk the line."
The meeter/greeter asks people in the queue what service they require, and if it can be carried out using an ATM the customer is asked if they would prefer to use a machine.
This approach also helps RAKBANK to work out which services are required, and when.
"We get the impression, so then we know if we have to focus more on getting cash out of the ATM machine," says Honeybill. "We've got some of the most modern ATMs in existence, but we're looking at ways of putting services into the customer's hands, giving the customer the option to decide on the kind of service he wants."
The bank also focuses on customer education, in an attempt to avoid possible problems later on. Representatives of RAKBANK often telephone its new customers to explain the features of products like credit cards, so that they understand how to make the most of the features and avoid penalty charges.
Customers may also receive a phone call after they join the bank, in which a representative will ask if there was anything in the enrolment process that could have been improved.
The data from all parts of RAKBANK's operations is collated on a monthly basis and used to see where service levels are dipping. Appropriate action is then taken.
"We are looking at errors that come out of process or that come out of people," says Honeybill. "The statistics are collated and they are circulated, first to the heads of divisions, then to the departmental managers or the branch managers and then to the staff. These are put up on our intranet so everyone can see them, so there's no arguing."
RAKBANK is also working on an online staff suggestion scheme, which will allow its employees to come up with ways to improve processes.
Staff development and encouragement are perhaps the most important factors in the bank's success, says Murray Sims, head of personal banking at RAKBANK.
"Your staff are very important," says Sims. "If your staff are unhappy, they're fed up or demotivated, that gets expressed in the form of poor customer service. One of the things we do is measure our staff satisfaction."
Honeybill admits that other banks often try to poach his staff, but is confident that RAKBANK offers them a better value proposition through its commitment to employee development. Staff are rewarded with on-the-spot cash awards for good customer service, and the bank also holds its own equivalent of the Oscars for employee excellence.
In addition, RAKBANK pays out to its customers when it is in the wrong: AED100 every time it is found to have made a mistake. So far this year, it has paid out less than AED1,000.
It also monitors the local newspapers for complaints. "We respond to any complaint that comes through a newspaper," says Honeybill. "If we're wrong, we say we're wrong. We publish the apology in the newspaper. As a result of that we have credibility because we practice what we preach."
RAKBANK operates a dedicated complaints resolution unit, which handles complaints made through any of the bank's channels and ensures that customers receive a response within 24 hours.
"It may not be the response he wants, the solution to his problem, but it is an acknowledgement and it is a promise that he will get a response," says Honeybill. "Those responses go out in writing. They will go out under Murray's signature or my signature and if we're wrong we pay."
One bank that receives a great deal of negative press for its customer service is Standard Chartered. Despite operating the largest branch network of any foreign bank in the UAE, three-hour queues for the teller are common, and local newspapers frequently carry letters from frustrated customers. Despite this, the bank seems reluctant to engage with the media or publicise any initiatives to improve its customer service.
Standard Chartered said in a statement: "The bank is constantly investing in systems and the development of its teams to deliver improved customer service, which is supported by its dedicated Customer Service department.
"Any complaints received are dealt with on an individual basis and cannot be commented on. However, we do place very high priority on service improvements and constantly aim to meet our customers' needs."
However, some of the other foreign banks have fared better. UK-headquartered bank Lloyds TSB uses independent research to monitor its service delivery, and secured a 92% customer satisfaction rating in a recent survey. Chris Balfour, Lloyds TSB's head of personal banking, says: "There are very few things more important to us than what our customers think about our service.
"Whilst we get a good feel for this from speaking to people every day in our main branch and customer service centres, we find that by carrying out regular, in-depth and independent research we get a better understanding of where we are doing well and also, where we need to improve."
Despite the high rating, the survey also gave the bank a good idea of where it needs to make changes.
"Clerical mistakes and high charges were cited in the few instances of dissatisfaction," says Balfour. "It is also apparent from customers' comments that some of these issues are a result of us operating on a relatively ‘old-fashioned and slow' banking system. But this system is being replaced by a new, flexible, state-of-the-art system early in 2008 and we're confident this will help us improve in a number of key areas."
The survey also found that customers are happy paying slightly higher fees for services at Lloyds TSB because they believe they are getting better service as a result.
"Overall, this feedback has been very instructive and we've already implemented a number of changes as a result," says Balfour. "We've re-issued our tariff of charges to all of our customers, have re-organised the branch layout and reduced our fees on offshore bank accounts. We're even providing call-backs to customers who may not have been able to get through to us by phone if all of our telebanking team were engaged at the busiest times of day."
Another international bank, ABN Amro, which also ranked highly in the Ethos bank ratings, uses its own monitoring system to measure branch performance across Asia.
"We have a dedicated system, Q Matic, to monitor our teller performance and transaction time, and we have plans to replicate this for our service desks as well," says Anindo Bhattacharya, vice president, customer relations and service quality, ABN Amro.
"Our levels of customer service are constantly measured both internally by tracking our service delivery indicators and externally via our customer listening posts, as well as periodic customer feedback surveys. Our service delivery is constantly benchmarked with our customer expectations as well as with our competition to ensure that our standards are always maintained at the highest levels possible."
Following the implementation of its customer service programme, ABN Amro claims to have reduced customer complaints by 60% in 2007 alone.
As many local and international banks step up their efforts in customer service, the others need to make sure that they are not left behind.
Better-trained staff can only improve operational efficiency, and it seems that bank customers in the region are no longer prepared to settle for second-rate service.