Business Management Articles
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by Rene T. Domingo (email comments to

A conventional bank may treat its customers as coldly as the cash they deposit or borrow. Many banks have conveniently used control and security as reasons for their remarkably slow and impersonal services. In recent years, other service industries, notably fast-food and airlines, have proven that customer service can be a swift and enjoyable experience for both clients and employees without sacrificing control, costs, and profits. Some banks have finally adopted these new service paradigms and are now benchmarking with non-bank institutions to learn about their best practices.

For instance, BayBanks of Massachusetts, is using the mail-order company L.L. Bean, known for its superb order-taking and service delivery systems, as its model for change. A major result of this functional benchmarking was the establishment of a 24-hour customer service center that can not only respond to queries and complaints but also promote and sell the bank's products and services. The center even allows customers to open a checking account anytime or negotiate an overdraft at 2 am. The ATM was also reconfigured from a mere cash dispenser to a versatile and tireless account executive. The machine can now buy and sell mutual funds. Inspired by L.L. Bean, Bay Banks published a 50-page catalogue to help customers appreciate and select from its more than 160 financial services.

Seafirst Bank in Seattle redefined itself from a "retail bank" to a "retailer" and has benchmarked with retailers known for world class customer service such as fast-food restaurant chains. Inspired by these models, Seafirst instituted a 5-minute guarantee that says "Wait any longer than 5 minutes in line and the bank guarantees $5 to your account." Moreover, if the customer complains of any other inconvenience, he or she gets a $5 "I'm sorry coupon". Its branch offices have official "greeters" to greet and guide customers to the right tellers or desks, much like the guest relations officers (GRO) or receptionists of 5-star hotels. The greeter mans a kiosk at the entrance of the bank. To reinforce this service philosophy, branch managers are rated not only on sales but on service goals. Achieving or even exceeding sales targets without achieving customer satisfaction goals will not entitle a branch manager to receive the bank's prestigious "Gold Club" award. Executives from the CEO down are encouraged and expected to visit branches regularly to monitor service and get a first-hand feel of the action. When Seafirst decided to redesign and re-layout its offices to improve service, it acquired the services of an expert from the Godfather's Pizza chain. One result was making the teller counter waist-high. It is now more open and personal than the traditional counter that is intimidating and creates a barrier between the client and the teller.

Like Seafirst, Citicorp looks as itself as less of a bank and more of a "factory". This factory processes raw materials in the form of documents, application forms, and customer requests and the final product is a satisfied customer. Desks, departments, offices, and other work stations serve as the machines and equipment of this document factory. In reorganizing the bank into a leaner and better service center, the CEO John Reed, who has an engineering background, applied the lessons and practices he learned from his visits to Ford Motor, Cummins Engine, General Electric, Core Industries and Exxon. The first process his reengineered was the back-room operations which consist of many repetitive operations. Back-office of banks are known for snail-pace bureaucracy that hampers front line operations and the ultimate customer service. By applying the concept of "mass production", streamlining, and standardization of tasks, Citicorp aims to remove this critical bottleneck. The bank also benchmarked with Chrysler in getting its functional departments to work effectively as teams.

Others banks, shedding their conservative "finance and control" images, have likewise adopted innovative service strategies and practices. Banco Frances has established an information center or "encyclopaedia" in the waiting lounge. Here customers can browse through various bits and pieces of important service information like the average time to finish a transaction and the company's products and services. Information about the busiest day or days in the branch are displayed so that customers may want to avoid these periods. In the new branches of Garanti Bankasi, phone lines dedicated to customer service were installed. Any customer can pick up this phone and relay his or her a complain, question, or difficulty. The facility is designed to represent the company's commitment to service and also serves as the customer's last resort in case everything else fails. Similarly, ASB Bank Limited has established a phone center to accept , process, and resolve customer complaints. It also has a customer feedback programme whereby whoever the customer complains to, say a staff employee or manager, will be responsible for giving the client feedback on the status and progress his or her complaint. The bank’s customer service center has created two customer flows or lines to deliver services more effectively. One was for loans and similar products that require customized and personalized services. The other lines was for the standard and repetitive services like deposits and withdrawals. By creating two service environments that cater to two different types of needs, service is enhanced and speeded up.

Bank Pertanian Malaysia (BPM) has extended the concept of "mobile banking." To the convenience and delight of customers living in longhouses along the river banks of the Sarawak river, the bank has launched floating branches on boats that provide full branch bank services. To further enhance service, BPM has also reconfigured its automated teller machines to dispense not only cash, but also commodity prices and information about its products and services. The Korean Technology Banking Corporation (KTB) is setting up a Technology Financing Information Center to serve the various needs of its clients, most of which are setting up joint-ventures overseas. The Center will contain a huge database of information analyzed from various data from internal and external sources. By accessing this database, clients will get information about specific technologies, local information, and other data relevant to the ventures they are setting up. To facilitate processing, development financial institutions like the Industrial Development Bank of India, requires borrowers to submit loan application forms in electronic floppy disks.

Some banks and financial institutions have done such a remarkable job in improving and reinventing customer service that they themselves have become the benchmarks of other companies outside the banking sector. For instance, American Express, the credit card company, is the recognized benchmark to emulate when it comes to improving a company's billing process. Amex's billing is reportedly the fastest and most accurate in the world in any industry. Xerox, the benchmark for many quality practices, used the Amex model in enhancing its billing systems. In China, the benchmark for customer service and customer courtesy is surprisingly a bank: The Industrial and Commercial Bank. Hundreds of retail shops and department stores, many of which are known for rude service, visit the bank's branches to learn a few lessons on satisfying and delighting customers. Before sweeping changes were made, the Industrial and Commercial Bank was also known for bad service and discourteous front line employees who even swear at clients. One radical and highly effective policy it instituted was coming about with a list of words and phrases their employees are forbidden to use when dealing with customers. For instance the popular expression "When will you stop complaining?" is included in the banned list. While other banks may refuse to change or accept soiled or old currency notes, the bank will replace these without question.

Even clearing houses have adopted the new service paradigms to support the banks' initiatives. For instance, the Singapore Clearing House Association has cut the clearing of US$ checks deposited in Singapore from two weeks to 3 days. The new system requires participating banks to open US dollar accounts with Citibank to service their respective clients.

Innovative banking in customer service is indeed a welcome and long-awaited development. We hope that other banks and financial institutions will follow suit soon. Satisfied customers are the best guarantee of stability and growth. As in other service sectors, bank customers deserve the very best. In the past, banks have rarely treated customers as people, preferring to treat them as account numbers, passbooks, and loan applications. Customer service, in contrast to customer processing, is a concept whose time has come for the banking industry world wide.


1. "From Service to Product", Strategic Insights into Quality, No. 4, 1994, p. 24
2. "Making Service Look Easy," Training, February 1992, p. 32
3. "Reed's Revamp of Citicorp Stresses the Factory Model," Asian Wall Street Journal, June 28, 1993, p. 8
4. "Customer Focus: the True Measure of Success," Banker's Journal Malaysia, Feb/Mar 1995
5. "ASB Bank Limited," Journal of Development Finance, June 1995, p. 19
6. "Enhancing Competitiveness and Customer Service Through Innovative Banking Technology: Bank Pertanian Malaysia's Experience," Journal of Development Finance, June 1995, p. 41
7. "Competitiveness in Service Excellence: Best Practices in Korea," Journal of Development Finance, June 1995, p. 37
8. "Computerization in Development Financial Institutions (DFIs) IDBI Experience," Journal of Development Finance, June 1995, p. 26
9. "China's Flirtation with Customer Courtesy," Asian Business, Nov. 1995, p. 90


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