Durkin, Mark --- "Knock, knock. no-one's there!" [2006] MonashBusRw 6; (2006) 2(1) Monash Business Review 24

Knock, knock… no-one’s there!

Mark Durkin

The focus on new, self-service technologies in financial services is a favourite with banks who argue it’s a mutually beneficial arrangement. However, with holes-in-the-wall replacing bank tellers, robots answering phone calls and online banking proliferating, the question begs, when is enough enough? Mark Durkin reports.

A key issue in banks’ embracing of technological platforms and delivery systems is the impact on the bank-customer relationships. While the importance of technology in bank-customer interactions remains undisputed, remote channels may undermine consumers’ feelings of trust and adversely affect customer loyalty and retention. According to some experts, in pure service situations customer satisfaction and repeat patronage may be determined solely by the quality of the personal encounter. Indeed, retail branch staff will become even more critical as technology becomes more pervasive.

To have a presence in all channels is a very expensive business and so banks need to work out where the service emphasis should be placed, a process that requires a deep understanding of how different customer segments will respond to the new technology.

Who to target?

A literature review indicates technology offers the banks key benefits in terms of both cost efficiencies and relationship management effectiveness. What is less clear however, is which customer groups the banks should target for face-to-face and/or remote interaction platforms and how such targeting would result in new remote channels being used.

Implicit in banks successfully persuading customers (at any level of net worth) that the internet is appropriate for them is the need to convey the ‘relative advantage’ of using it. Given that the internet is a discontinuous innovation with high complexity and low compatibility for most customers, there is a need for customer trials accompanied by a focused education campaign. However, although the form this trial and education might take is unclear, the inhibitors to adoption of new technology, risk/safety of interface, reliability and the desire for human intervention as required, are not.

Convenience and better service

In general the key benefits of e-banking are convenience and improved service. While some customers favour remote interfaces, others want face-to-face and it is unrealistic to expect this division will always reflect the desires of the bank, a mismatch that poses difficulties.

The risk of customer dissatisfaction is also compounded when high net worth customers begin to discriminate purely on price. Conversely, the low net worth customer, who may be dependent on the branch interface, may not be technologically literate or have internet access or even want to use the internet in the first place. Should such a customer be forced to embrace the new remote channels? If so, how? What are the marketing and PR consequences of such a decision?

The point is that while technology can empower customers at the click of a mouse, it can be a risky proposition for banks. Or to put it in the words of Moon and Frei (2000): “The problem is when a company does less, the customer ends up doing more – and most customers don’t want to do more.”

Towards a general conceptual model

Both banks and their customers have varied and complex reasons for using and not using new technological delivery systems: individual levels of self-efficacy, concerns over reliability, safety and a lack of human contact. Advantages remain convenience, time-saving and ease of access.

Such issues in service contexts have been identified in this study. An analytical framework through which to conceptualise differing customer and business-specific perspectives regarding the possible adoption of the internet by both relationship parties has been developed.

Conceptual thinking around the area of internet-enabled bank/customer relationships is a relatively recent phenomenon but:

• It remains a strategic imperative for marketers to continually review and understand the customer’s reaction to remote technology

• The extent to which the internet proposition is in harmony with other delivery platforms and reinforces rather than undermines the corporate brand identity

• The extent to which there is an organisational commitment to gaining a deeper understanding of customer interaction preferences, how these preferences match the company’s strategy by segment, and to what degree are time-sensitive contingency plans for mismatches being developed

• The extent to which reassurance is provided to all customers on issues of safety and reliability of the internet interface and in what ways customers manifest fears about internet adoption for products of varying levels of complexity and involvement

• In the context of the promotion of key positives of internet delivery like convenience and ease of access, is there a corporate sensitivity to the risks that higher net worth customers may seek out the more remote interfaces and actually compromise the company’s attempts to cultivate a deeper personalised relationship? In this case is there a differentiated promotional strategy that promotes the internet as a complement to, rather than replacement of, the face to face relationship.

These are key questions for consideration by marketers in all businesses, not just those in financial services organisations. For too long the internet has been seen as ‘just another channel’ and while it has now emerged as a core element in the distribution portfolio of most companies, questions around customer receptivity remain if the true potential of the net is to be realised.

Cite this article as

Durkin, Mark. 'Knock, knock… no-one’s there!'. Monash Business Review. 2006.; Monash University ePress: Victoria, Australia. http://www.epress.monash.edu.au/. : 24–25. DOI:10.2104/mbr06006

About the author

Mark Durkin

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Mark Durkin is Head of the School of Marketing, Entrepreneurship and Strategy, at University of Ulster at Jordanstown, Northern Ireland. In 1986 he joined the Bank of Ireland Group, where he remained until joining University of Ulster in 1996. In 2001 he completed chairmanship duties for the Chartered Institute of Marketing (CIM) in Northern Ireland and was appointed a Fellow of this body in 2003.