Technology may have given banks apps, slick websites and a host of automated functions, but it hasn’t changed the fact that clients still expect a personalised one-to-one experience.
Given that Westpac only had one staff member to every 500-600 customers, it was physically impossible to deliver this, especially since Kiwis are now active across multiple channels daily.
The lack of connection between the bank with customers meant that account holders made their decisions based entirely on which deals they regarded as the best, irrespective of what their current bank offered. In 2012, research from Roy Morgan showed one in ten people changed banks over a 12-month period, up nearly 100,000 from the previous year.
And the trend didn’t seem to be slowing down, because a Horizon Reasearch poll conducted around the same time found that of the 1165 residential homeowners with mortgages surveyed, 43.5 percent believed they would go shopping for better rates or loan conditions within the next 12 months.
And in a highly competitive environment, typified by clients constantly on the look for good deals, banks aggressively attempted to outdo each other with better deals.
Advertisements offering new credit cards with rock-bottom interest rates, home loans with TVs and term investments promising ever-greater returns flooded onto all media channels as competing banks attempted to win unsettled customers that were looking for something better.
But acquiring new customers in this way tends to be expensive, meaning that maximising the value of existing customers remains the cheapest way for banks increase their profits.
However, a problem faced by banks throughout the world is that it has become difficult to develop deep customer relationships in the online age. As technology has automated many elements of the banking experience this has led to a drop in oneon- one experiences with the bank’s staff.