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Dear Bank: You Broke My Heart

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Dear Bank: You Broke My Heart

My friend has a transport business, which is flourishing. He has more customers than he can serve and he wanted to buy more trucks...

5 Minutes Read

My friend has a transport business, which is flourishing. He has more customers than he can serve and he wanted to buy more trucks to support the growth. Thus, he applied for a loan at his local bank branch recently. With a long 16+ year relationship and his account in good standing with the bank, he thought it would all be smooth sailing. He’d already put down an initial advance at the dealership, thinking that he would get the loan. After a 40-day wait and a ton of paperwork, he finally received a letter informing him that his loan application had been rejected; the bank didn’t provide any detailed reasons for denying the application. My friend felt rejected – maybe a bit embarrassed and more likely betrayed that he’d trusted this bank for years, and had now discovered that the level of trust was not reciprocated. As you might expect, he closed down his account with that bank. Since then, my friend has shared this experience with all of his friends and family members (in person and through social media), explaining his bad experience and losing his trust with this bank. Online emotions are contagious, as Facebook goes to show.

At a rational level, the bank also failed to capitalize on the opportunity by helping him to grow his business. I am sure that all of us must have gone through some good and some bitter experiences with our banks. However, the bitter experiences leave scars on people’s minds and hearts and they never forget what their bank has done to them. Emotion is a powerful driver for brand interaction and consumer experience, more than any other element of the customer journey, way above fees, rates, and even convenience. I believe that my friend would have built a positive perception of his (former) bank if:

-          The bank could understand the role of emotions in the entire customer decision process to strengthen, trust and guide change in the customer’s behavior;

-          The bank had presented some practical alternatives to achieving the goal. The banks could have alleviated fear, anxiety and concerns with proper guidance throughout the process, rather than giving him a last-minute surprise;

-          The bank had made the experience more personal by delivering the news in person and providing recommendations for the future. Empathy is the key.

In a recent study, Forrester found that emotion has a bigger impact on customer loyalty than effectiveness or ease. The analyst firm expects 2015 to mark the year that companies jump on the “emotional bandwagon” to differentiate their customer experience. In fact, customers who are emotionally engaged represent a 23% premium in terms of wallet share and profitability for firms.

I recently published articles on how banking competition is mushrooming all around as new competitors target different parts of the banks’ value chain, based on their ability to connect with customers and present themselves as an alternative to traditional banks. I believe this trend will further intensify if banks continue to focus only on ‘transactional’ trust and less on ‘emotional’ trust with their customers. In addition to the transactional aspect, people tend to carry a significant emotional weight with their money and banks just can’t ignore this. Here are a few examples of how some of the banks are leading with an emotional quotient and strengthening their brand and trust with customers:

-          NAB, Australia, provides regular updates on the home loan application of waiting customers. The customers are reassured about the progress of their loan application, which has helped the bank to create favorable perceptions about their brand; as a result, it has a better customer retention rate.

-          TD Bank, Canada, decided to thank over 30,000 of its customers by spitting out cash, flower bouquets, and personalized gifts through its ATM machines. One mother even got air tickets so that she could visit her daughter who is suffering from cancer.

-          Metro Bank, in the UK, encourages customers to bring their kids and pets to their branches. Some of the little touches, such as free lollipops for the kids and water bowls for customers’ dogs, have won the hearts and minds of customers (and their families and friends).

The future of banks is about striking a balance between their transactional and emotional relationships with their customers. They must integrate their customer-focused technologies with customer experience management methodologies to deliver a perfect customer experience. We are in an age when everything seems to be digitized and automated, but businesses will start to feel more human and maintain a balance between automation and customers’ emotions.


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