SHOULD TECHNOLOGICAL INNOVATIONS BE ALLOWED TO OVERSHADOW CUSTOMER SERVICE SKILLS?
Product differentiation in banks hinges on quality service delivery

It is interesting to see how dynamic the financial industry has been over the recent past and the way it is evolving coupled with the pace at which bankers have adapted themselves to the changes. Time is ripe for bankers to concentrate on polishing up their skills as marketers who can attract and retain customers through good relationship management practices and anticipating and providing what best suit customers in relation to their individual business requirements. Two major key elements to achieve these are responsiveness and empathy.

In the middle of advanced technological developments and the possibility of banks being able to enter into arrangements to use each others infrastructure, all players will prima facie be seen to be operating on an even ground.

Responsiveness i.e.how staff react and their readiness and willingness as bankers to respond to customer requirements, be it business as usual, queries or enquiries is of paramount importance. Marked differences will be noted between system users who rely on machines to do things for them and simply wait for problems before they can react. For example, leaving an ATM to run out of cash or receipts and relying on the guard to phone responsible officers is a clear sign of lack of responsiveness. The second element is empathy which calls for developing a listening and caring culture. While some customer complaints may be raised because the complainant is not fully conversant with the existing procedures in handling certain transactions, a banker should take time to explain the issues at hand without insinuating or demeaning the lack of knowledge so far displayed in the query.

In the past it was possible for banks to compete with each other basing on their individual technological infrastructure but today the story is different as globally financial institutions have realized that it is more ideal and cost effective to interoperate and use each others infrastructure. This is good for the industry as a whole because it is a way of avoiding duplications in investing in similar technology which end up being underutilized. Now as an industry, banks are coming together and mobilizing resources to invest in single infrastructures which should eventually enable them to offer their products cheaper than would be the case if each bank was to invest single handedly. The Electronic Cheque Clearing House (ECCH) system is one such example in the country. With almost the same products being offered across the board such as loans, overdrafts, letters of credit, etc the real battle between the financial institutions lie in the quality of the service offered to their customers. It is not enough to believe in yourself about the standard of service you offer because according to Dibb Sally in his book on Marketing, Concepts and Strategies, service quality is defined as customers perception of how well the service meet or exceed customer expectations. It goes on to say that service quality is judged by customers and not the organization.

The Financial industry will never stop welcoming encroachers
The common usage of infrastructure therefore leaves the banks to compete on delivery of quality service. A lot more other players are also coming into the banking arena to provide different services just to tap into the business of banking, giving a further demanding reason for banks to brace themselves to continue being preferred as the better option. To take a simple example, before on-line banking, it used to take a few days before funds are transferred from one account to another even if the accounts are maintained in the same city. On-line banking has completely changed the set up and now the process takes a matter of seconds before funds move from an account in Blantyre to an account in Karonga for instance.

New encroachers in the money transfer business who are growing in popularity are the mobile phone companies. At the beginning of 2007, mobile companies operating in more than 100 countries around the globe were using mobile phones to transfer money to their relatives and friends in different parts of the world or to their home villages. African migrant workers and those in the Diaspora are now finding it more convenient to send money home through mobile phones in form of airtime which the recipients i.e. beneficiaries takes to a merchant within their vicinity to get cash. The way the system works is that the mobile phone service providers enter into arrangements with some merchants to provide cash in exchange for units which the remitters will be sending to their relatives. The mobile phone companies guarantee reimbursement to the merchants. Refunds are also made in cases of loss of phones and cards.

On-line banking is also making the system to function better since those leaving far away from banks are able to top up their phones without necessarily having to visit a bank or ATM. It is believed that out of the world population of 6.5 billion at least 50% use mobile phones and this offers such a wide coverage extending to the un banked population. The success of this development is evident in countries like Zimbabwe, South Africa, Nigeria, Uganda, Kenya and DRC Congo. In Congo for instance, MTN has introduced a program called VillagePhone and is being offered in conjunction with microfinance institutions that provide credit to their clients, who then set up as village entrepreneurs to sell airtime for the local use of mobiles.

Banks view non bank institutions as agents into the un banked corners
This trend of events is likely not going to spare Malawi and it should not be long that we start witnessing similar operations. To the banks this is not seen as a threat but rather an opportunity in the sense that the rural un banked masses will be able to channel their funds into the active financial sector through the very mobile companies. Unless mobile phone companies become banks themselves, all their collections will come back and end up in the banks.

Without reaching out to the rural areas, all the money that gets there ends up being stack in the informal sector and reduces the total available funds for savings and investment.

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