by Rene T. Domingo (email comments to rtd@aim.edu)

We can see two tracks or trends banks follow in enhancing customer service. One is to provide speedy and convenient service and the other is to deliver warm and personalized service. While both types are desired by most customers, the difficulty lies in doing them at the same time and managing their conflicting effects or requirements. For instance, fast processing of transaction may mean less time for personal touch and friendly exchanges with the client. Such haste may be taken negatively by sensitive customers. On the other hand, warm service may require slower pace of work, longer queues, and waiting time which may irritate the next client who has a busy day ahead of him. It is said that people in the rural areas are not particular about speed and may tolerate slower service so long as they get to talk at leisure with the service provider or teller about their needs and problems.

Electronic banking, in the form of ATM and internet-based cyber-banking or home-banking, is one popular mode to achieve speedy and convenience service. The principle is to eliminate the human interface or middleman and let the customer into the bank's systems to browse and decide for himself what he wants to do or have. The "moment of truth" or contact between customer and bank shifts from man-to-man to man-to-machine. The phenomenal success of the ATM comes from the fact that only about 25% of clients visit their banks regularly. Electronic banking, while a welcome development, has several problems and limitations. Firstly, it provides limited choices of services or transactions, primarily withdrawals, deposits, and balance inquiries. Secondly, it cannot respond or take care of special problems or needs. Thirdly, it requires customers to look for ATM sites which may be inconveniently located. Fourthly, it requires special hardware and computer literacy in case of home banking.

Several banks have taken initiatives to address these limitations of electronic banking in an effort to make it as warm, responsive, and flexible as the human counterpart it replaced. For instance, the multimedia Open Banking Terminals of the United Overseas Bank (UOB) of Singapore use color, sound, and animation to provide service with fun. They can even show scanned images of customer's checks for his confirmation. The ATM service of Allied Bank of Malaysia, known as PAL Virtual Kiosk, aside from providing regular transaction services, allows users to meet a bank staff "face to face" in head office through its advanced touch-screen terminal. The client feels he is really dealing with a live teller.

Another thrust in making electronic banking more user-friendly is enhancing its accessibility and increasing its range of services. Many banks have extended the uses of the ATM card - like debit cards, credit cards, and identification cars. Holders of Megalink ATM cards in the Philippines can use over 2,000 Paylink terminals located in 500 supermarkets, stores, gasoline stations. The ATM card doubles up as a convenient point-of-sale debit card. The Hong Leong Bank of Malaysia launched an internet-based cyberbanking called BANK@HOME that can provide multi-tiered savings deposits with checking facilities and trust funds. The advanced electronic technology of International Exchange Bank of the Philippines provides for instant inter-branch signature verification and allows clients to encash a check in any branch. This desirable and convenient feature is rare in the local banking industry. The Bank of Philippine Islands (BPI) also extended its ATM services to the rural areas to cater to the banking needs farmers and other countryside clients. Its CountryNet provides 24 hour ATM service and interconnection with other CountryNet member bank. This is a welcome development as only about 2% of the thrift banks in the country are members of the city-based ATM networks, namely ExpressNet of BPI, Megalink, and Bancnet. Banks using the cyber-banking services and software of CheckFree, based in Ohio, can give their clients more than the usual fund transfer services. It can allow for receipt and payment of household bills through e-mail, personal finance planning and management, and investment tracking and advice.

In an effort to make banking service more convenient and friendly, some banks have set up manned kiosks or service centers that can provide banking service outside normal hours and in locations banks are not usually present. Bank Artha Graha of Indonesia has set up 50 such cash offices or kiosks, each staffed by 2-3 account executives, and located in shopping malls and hospitals. They can accept deposits, bills, payment, and can cross sell the bank's other products like cellular phone and travel services.

The latest trend in making banking service fast and friendly is customer data warehousing that allows for analysis of customer backgrounds and transactions for trends. The analysis can be used for product improvement and redesign, cross-selling, and anticipating customer needs. With advanced background information about the customer, paper work and long application forms can be cut, if not eliminated. Thai Farmers Bank is using data warehousing to understand its clients and perhaps discover latent needs and opportunities. According to one bank executive, it should be easy to find out the total transaction of a customer even if he uses several accounts, the customer with the highest deposit or withdrawal for the day, financial status analysis from payroll processing data, and house size analysis from electric bill payments made to the bank.

As banks apply total quality management principles to improve competitiveness and increase customer loyalty, the choice between "speed" or "smiles" remains an issue in service redesign. But the real challenge is how to make banking service fast and friendly at the same time.