Banks changing the way they do business

24 October, 2003

Banking Adjudicator Advocate Neville Melville believes that the annual Banking Adjudicator Award for Excellence in Dispute Management, which this year was won by Standard Bank, is beginning to change the way banks do business.

A year ago, he says, Markinor, which conducts the annual survey on behalf of the Office of the Banking Adjudicator (OBA), reported that one in six people interviewed had cause to complain to their banks.

This year, the figures have improved markedly, with a one in nine ratio now being shown. There were also commendable advances in customer satisfaction levels for complainants. The combined totals for the categories of "somewhat satisfied", "very satisfied" and "extremely satisfied" rose from 63% in 2001 to 91% in 2003 - a 44% improvement.

Some interesting trends emerged from this year's research. As might be expected, a complaint was more likely to be resolved satisfactorily if two or less people dealt with the matter, as opposed to four or more being involved in the process. There appears to be a different correlation between a customer's level of satisfaction with the manner in which a complaint was resolved and that customer's continued loyalty to his or her bank. The likelihood of continuing to use the bank that was rated the best in respect of its complaint process is 72%, as opposed to the 61% who are likely to continue using the bank that scored the lowest in this regard.

"This offers an important lesson for banks and companies across the board," says Melville.

"The research clearly illustrates that where an organisation's complaint resolution process is quick and effective and few people are involved, the loyalty of customers is more likely to be retained. This has huge financial benefits for those businesses that are in tune with their clients' needs and expectations."

What should be of concern to the banks, in spite of their improved showing, is the fact that 30% of customers feel "trapped", as there are barriers that prevent them from leaving their respective banks.