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Products & Services

Benchmarks for Excellence in Caribbean Retail Financial Services

ID: OP-100


Features:

3 Info Graphics

20 Data Graphics

109 Metrics

48 Narratives

40 Best Practices


Pages: 75


Published: Pre-2013


Delivery Format: Shipped


 

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  • STUDY OVERVIEW
  • BENCHMARK CLASS
  • STUDY SNAPSHOT
  • KEY FINDINGS
  • VIEW TOC AND LIST OF EXHIBITS
The intensely competitive nature of the retail-banking industry prompted members of the Barbadian retail financial services industry to join together to explore common “pain points” experienced by retail banks and credit unions in their search for customer service excellence. This benchmarking report was part of a "pilot" program in the Caribbean to demonstrate the efficacy of benchmarking as a productivity improvement tool. While the information presented in this report is particularly relevant to the Caribbean market, many guiding practices are transferable to the broader financial services industry.



This report offers insights into the critical need for a cohesive interplay among back-office staff and frontline employees for building and supporting customer relationships. Moreover, clear-headed marketing strategies, targeted human resources initiatives, as well as technology consolidation and training emerged as essential aspects of a holistic customer service experience.

Chapters in this report highlight best practices and metrics for marketing and sales excellence; service excellence; human resources and management excellence; and transactional excellence.


Industries Profiled:
Banking; Financial Services; Retail


Companies Profiled:
Royal Bank of Canada; City of Bridgetown Co-Op Credit Union; Butterfield Bank; Barbados Public Workers' Co-operative Credit Union Ltd.; RBTT Bank; Barbados National Bank Inc.; Scotiabank


Study Snapshot

This best practice benchmarking study employed a two-pronged data gathering approach. The field research team designed and conducted a performance benchmark survey that gathered statistical insights from seven participating retail banks and credit unions, representing a cross-section of the industry. The Best Practices research team then conducted in-depth interviews with key industry executives at participating financial services institutions to harvest qualitative insights, process excellence observations and managerial lessons learned.

Benchmarks for Excellence in Caribbean Retail Financial Services (OP-100) evaluates multiple fronts of retail financial services operations that have the greatest impact on customer service excellence. For example, certain marketing programs call for coordinated process interactions between frontline employees and back-office staff to avoid sabotaging customer service expectations. Marketing must take care not to set unrealistic customer expectations, which could eventually lead to poor customer perceptions. Human resources practices that focus on hiring, training, career path development and performance management foster employee retention, which promotes continuity in customer relationships. Moreover, the varied application of technology across the industry reveals an important area of focus for improved efficiency aiding in customer retention.


Key Findings

The following are two sample key findings from the benchmarking report. In total, the study includes more than 200 best practices, data charts, narratives and performance metrics.

Sales and Marketing: Focus marketing efforts on customer relationships and leverage all staff to execute marketing strategies to capture new customers and increase the depth of assets within existing accounts.

Based on the benchmarking survey responses, Barbadian retail financial services companies spend five percent or less of their budgets on marketing. This relatively modest investment shows that this function may be under-funded in light of the increasing levels of competition. Still, benchmark companies have used these marketing dollars in surprisingly innovative ways, demonstrating a clear trend away from product marketing towards customer relationship marketing.

According to one participant, there are several important reasons for this shift from product emphasis to relationships emphasis. First, products are easily copied, but strong relationships are not. Second, by establishing close relationships, companies are better able to leverage their relationships and increase the amount of “wallet-share” from each client. In fact, the benchmarking survey shows companies that have greater numbers of clients also are able to attain greater assets per client. As assets grow, revenue tends to grow in direct proportion. Sales and marketing strategies that take advantage of these trends tend to be the most successful.

Moving in this direction, companies have provided many examples of innovative programs, employing strategies that are both defensive and offensive such as aggressive mortgage “buy-backs,” rapid turnaround loans — within one day — around key times like Christmas, and explicit processes that direct account managers to touch base with clients on key dates like birthdays and anniversaries to develop personal ties that help to cement client relationships.

Furthermore, the traditional model of utilizing branch personnel as the focal point of sales efforts is changing, especially for large ticket purchases like mortgages. Indeed, some of the benchmark companies have instituted roaming mobile sales forces to go out to potential customers' homes and workplaces to increase the effectiveness of sales for mortgages and other loans. Additionally, some of the companies have designed processes and systems that tie referrals and up sells in the branches directly to frontline compensation, incanting front line workers to focus on the relationships and drive additional sales.

Lastly, companies are realizing the impact that the overall customer experience has on long-term retention and adopting strategies for focusing on customer relationships. They are rethinking how the customer experience works in branches and designing processes, procedures, incentives, and staff management programs to drive behaviors aligned with the overall marketing and sales strategy.

Human Resources: Design innovative ways to manage people and provide incentives to ensure behaviors are aligned with strategies, and create HR processes that measure and align capabilities with intended performance standards.

Human Resources is a critical function for ensuring that talented employees are hired, that they remain motivated to achieve appropriate performance levels, and that performance gaps are addressed through effective training. Interviewed companies use a myriad of standard approaches to acquiring key talent — including newspaper advertisements, walk-in applications, college student part-time workers and word-of-mouth.

However, we found stark differences in how companies interview and screen candidates against culture and position requirements. Benchmark companies used a combination of technical and behavioral competencies to identify best candidates. Additionally, they provided extensive training to hiring managers on how to do so. Furthermore, top companies use a standardized screening process and a set of successful competencies.

Once new employees are on-board, companies use different methods to keep them engaged and in value-added roles. Top companies evaluate different career paths and job rotations to retain talent. One company rotates frontline employees through the back office to increase their appreciation for transactions. This well-rounded training results in added value as these frontline employees learn to look for and spot errors. Another top company uses compensation broad banding to equalize salary differences across the organization and develops various career paths in both front and back offices to allow movement and progression, without removing good people from areas where they are strong.

Performance management provides another area where best practice companies showed substantial improvements over other benchmark participants. Best practice benchmark companies in the HR area directly and visibly link performance and compensation. For example, many companies perform annual customer-satisfaction surveys, and many use annual employee-satisfaction surveys as well. World-class companies perform customer-satisfaction surveys and focus groups more than once a year and build specific performance plans around the findings.

If there are any deficiencies in performance in either of these surveyed areas, the impacted managers must create action plans, jointly with the employees when employee satisfaction is an issue. Monthly progress reports are required as well. These action plans are the fundamental basis for improvement; managers unable to meet satisfaction targets are moved to other roles. Similarly, employees are held to strict performance standards, with variable compensation tied to their targets.

The Best Practices team also studied training practices. Findings revealsed that several companies use a shared or centralized approach to delivering training. Many companies are starting to implement Computer Based Training for simple technical or managerial courses. Others allow employees to use university training for skill-set enhancement. For most companies, however, the majority of training is provided on the job and is less than stellar in quality. As such, employee training represents an opportunity for most companies moving forward.

Table of Contents

Table of Contents
Executive Overview
PROJECT BACKGROUND
STUDY METHODOLOGY & BENCHMARK CLASS
REPORT STRUCTURE AND ORGANIZATION
KEY FINDINGS AND INSIGHTS
Sales and Marketing: Focus marketing efforts on customer relationships and leverage all staff to execute marketing strategies to capture not only new customers but also increase the depth of assets within existing accounts.
Customer Service Excellence: Design all processes, both front and back office, to improve the overall customer experience and customer service levels.
Human Resources: Design innovative ways to manage people, provide incentives to ensure behaviors are aligned with strategies, and create HR processes that measure and align capabilities with intended performance standards.
Back Office Processing: Utilize technology and shared services to streamline back office processes, improve speed and accuracy and further enhance the overall customer experience.
PATH FORWARD
Introduction
Marketing and Sales Excellence
OVERVIEW
ADOPT A MARKETING AND SALES STRATEGY WHICH FOCUS ON CUSTOMERS, NOT PRODUCTS
Leverage a depth-based marketing approach, focusing on relationships not products, to increase sales to existing customers.
Focus on the entire customer lifecycle, e.g., cradle to grave, and customize the product line to the lifecycle to maximize product revenue and customer retention.
Build relationships around your most significant products to raise customer-switching costs and make it easier to cross sell to them to increase wallet-share.
Utilize formalized account management processes to build lasting relationships and identify customer needs.
Clearly define market positioning both internally and externally to ensure consistent communication with the market and in-branch customers.
Employ marketing campaigns that are both defensive and offensive in nature to retain existing customers and acquire new ones.
UTILIZE ALL STAFF TO DELIVER PERSONAL SALES OPPORTUNITIES
Train tellers and other frontline staff to identify sales opportunities with existing customers and make referrals to sales.
Foster customer intimacy through personalized marketing campaigns to existing customers.
Leverage mobile sales force to increase loan revenue, build long-term relationships, and improve customer satisfaction.
Take a “clicks not bricks” approach and use online banking and ATMs instead of additional infrastructure investments to grow revenues and assets.
Service Excellence
OVERVIEW
DESIGN CUSTOMER SERVICE PROCESSES AROUND CUSTOMER DELIGHT
Create an intentional and consistent customer experience as part of your branding strategy to retain more customers.
Use specific language among the staff to reinforce the intended brand and convey a positive customer experience with the company’s mission in mind.
Provide a personalized service to create a memorable experience.
Assign an employee or several employees who can assist customers as they wait, encourage them to use the ATM, or otherwise expedite their service.
Organize your teller lines by types of services and level of customers to get people to the appropriate staff person more quickly and enhance the overall customer experience.
Redirect customer calls from the local branches to a central call center to speed up the in-person transaction response times in local branches.
DEVELOP CUSTOMER-ORIENTED EMPLOYEES
Incorporate regular team meetings among the branch office staff to reinforce desired attitudes and motivate the team to deliver excellent service.
Instill a customer service orientation among operational and functional staff to speed up customer transactions.
DESIGN CUSTOMER SERVICE MEASURES TO ENSURE ALIGNMENT WITH CUSTOMER EXCELLENCE GOALS
Develop service standards and disseminate them widely to reinforce employee performance expectations.
Employ frequent customer satisfaction surveys, including surveying satisfaction with the competition, to ensure customer trends are identified quickly and potential opportunities are revealed.
CUSTOMER AND TECHNOLOGY PRACTICES
Motivate customers to use alternative electronic transactions rather than teller transactions.
Encourage customers to use technology at the point of transaction to improve adoption rates.
Human Resources and Management Excellence
OVERVIEW
STAFFING AND DEVELOPMENT PRACTICES
Leverage both technical and behavioral competencies in order to hire the right people.
Employ job rotation programs to allow staff to experience different roles and a means to keep them engaged and retained.
Leverage alternate career paths to reduce costs and maximize employee contributions.
PERFORMANCE MANAGEMENT PRACTICES
Link compensation to individual performance to motivate higher performance.
Tie employee and customer satisfaction directly to manager performance management processes, as part of a balanced scorecard approach.
Require responsible staff members to develop an action plan based on identified improvement areas to ensure that measures are used for continuous improvements.
Engage employees in regular goal setting for themselves with follow-up coaching sessions to keep employees motivated.
Employ motivational approaches with customer-facing employees to inspire world-class customer service.
TRAINING
Leverage Computer-Based Training to improve training effectiveness and reduce training costs
Use shared services and outsourced training models to improve the cost effectiveness of training.
Transactional Excellence
OVERVIEW
BACK OFFICE PROCESSING
Use an integrated, shared services approach and move transactional activities out of the branches to boost productivity and increase the focus of the branches on the customer.
Use concurrent work processing (e.g., workflows) to create technology that will reduce paperwork, shrink timeframes and increase customer satisfaction.
Use OCR and imaging to improve check-processing speed and enhance overall customer service.
LOAN PROCESSING
Exploit the loan process to cross sell to customers who have products at other branches and to learn how to better address their needs.
Use telephone-based screening and pre-qualifying for loan applications and make loan applications appointment-based to reduce customer wait time and decrease loan processing time.
Create an expedited application process for existing loan customers to shorten application cycle time.
Hold loan officers accountable for the on-time payment of their borrowers within the first few months of the loan to reduce delinquency rates.