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Rosie Murray-West
By
September 21, 2017

Banks, You Are Annoying Your Customers. Stop It!

  gdpr

banks annoying customers.png

Never underestimate the power of low-level irritation. In the coming year, bank customers are going to have to put up with a lot, as banks deal with the requirements placed on them by two new directives; MIFID II and the General Data Protection Regulation (GDPR).


Although these directives are aimed at improving consumer protection, they will require banks to ask for additional information from their customers, including updated marketing permissions, and in some cases identity verification. Customers may even have to go into a branch to give in more details or to show documents, which some will find an onerous and inconvenient task.

 

Consumer Intelligence’s knowledge of bank customers reveals that these checks are already happening, some customers are already getting annoyed. There may be worse to follow, as all the UK banks go through their databases to ensure they are compliant. 

 

And with challenger banks such as Monzo and Starling, built around strong technology platforms and without legacy database issues, coming hard on the heels of the UK’s core banking offerings, banks cannot afford to get this wrong without their customers moving elsewhere.

 

Knowing your weak points is the first step towards solving them, so we asked Britain’s current account holders how they felt about their banks at the moment, and what might persuade them to switch providers.

Customers are already being asked for extra information.

The impact of MIFID II and GDPR are already being felt by the ordinary consumer, with one in ten people saying they had been asked for extra personal details in the last year. A similar number — 11%, had been asked for permission by their bank to send marketing information in recent months.

 

Banks might be required to update their information, but it is the way that it is being done that is causing an issue. With 65% of those who have been asked for personal details having to go into a branch to give them, it’s no wonder that some find the whole thing too much. Consumer Intelligence’s survey shows that most people who had to provide more personal details had to go into a branch to provide them. Just 35% of those who had been asked did not have to travel to a branch. Small wonder then, that 26% — a quarter of customers who had been asked for details — were annoyed that they had to spend time physically handing over documents in bank branches.

Perhaps the big surprise is that many customers were so forbearing, with 63% saying that they were pleased that banks were taking their security seriously.

How did you feel about being asked to provide more personal details?

Pleased that the bank was taking security seriously          

63%

Annoyed that I had to take time giving extra details         

26%

Other   

9%

 

The GDPR requires banks to tighten up their marketing procedures, or stop marketing to customers altogether. All marketing consent must be ‘opt in’, and customers must have taken affirmative action, such as ticking a box, in order for an organisation to send them marketing materials. What’s more, banks must be able to prove that every customer has done this or face a large fine.

 

With W8 Data’s most recent study suggesting that only 25% of the UK’s marketing databases are compliant with this, many banks are having to ask for updated permissions. However, Consumer Intelligence’s research reveals that many customers are finding this intrusive, and it may put them off their bank. We asked customers who had been asked for updated marketing permissions to rank how intrusive they found it, and the results are below.

On a scale of one to five, where one is not intrusive at all and five is very intrusive, how intrusive did you find being asked for this information?

1

18%

2

19%

3

35%

4

17%

5

10%

 

While banks have little choice but to comply with these regulations, it is important to remember that customers see this type of interaction as a burden, particularly if they are being asked to go into a branch. Understanding the other things that annoy them about their banks may help to smooth the way, so that low-level irritation does not explode into fury.

 

We asked consumers what the most annoying things were about their banks, as well as what might prompt them to switch. Many of the top irritations were things that could easily be remedied, improving the customer/bank relationship.

 

The top five irritations for customers are as follows, showing the percentage of people who selected them (each respondent was asked to select three).

The top five irritations for banking customers

The bank doesn’t reward my loyalty

59%

The bank doesn’t pay interest on in-credit balances

45%

It isn’t easy to get into a branch to pay in money

43%

The bank tries to sell me products that I don’t need

32%

I can’t get through security because of complicated passwords and security keys

23%

 

Improving relations with existing customers at a tricky time may be as simple as addressing some of these issues — reserving the best rates for existing customers, paying interest on current accounts and reiterating any networks that are in place for paying in money (for example most high street banks allow you to pay in at the Post Office, but this service is not always widely marketed). 

Ian Hughes, CEO of Consumer Intelligence, says: 

 

"New regulations mean that banks have little choice but to place additional burdens onto their customers, which may mean branch visits as well as sending back extra documentation. Keeping customers on side is relatively easy if you start by putting yourself in their shoes. Try to understand what annoys them most.

 

"Consumer Intelligence's list of the top gripes should help banks to see the world through the eyes of their customer at this crunch time in the customer/institution relationship.

 

 “Almost all gripes can be easily avoided by thinking about this as a better way to serve customers, rather than as a legal or regulatory hurdle. The FCA mandates organisations to treat customers fairly and so doing it this way will help to avoid regulatory pitfalls as well.”

 

Making security authentication as strong as possible without inconveniencing customers will also improve goodwill, suggesting that investment into biometric and voice recognition by high street banks could pay off in terms of good feeling.

 

Perhaps most importantly, given the strength of feeling we have found from consumers, is resisting the temptation to cross sell to customers when they receive literature asking for updated permissions or further documentation. With almost a third of respondents listing banks’ attempts to sell them things they do not need as a real irritation, forcing new offers on them at this time could be counter productive.

 


Delete Day: How GDPR and ePrivacy could be an opportunity or an apocalypse

Data is the lifeblood of the modern insurance industry. It influences everything from pricing to claims, and insurers are constantly searching for the right data on the right customers. Without data, the insurance industry just ceases to operate...

 

Download GDPR Delete Report


 ¹http://www.campaignlive.co.uk/article/gdpr-will-render-75-uk-marketing-data-obsolete/1441738

 

 


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