'Take into Account Customer Interaction' While Many Banks May Favour Using the Telephone and Internet as a Means of Doing Business with Customers, Financial Institutions May Run the Risk of Losing the Personal Touch When It Comes to Dealing with People. the University of Ulster's MARK DURKIN Analyses the Implications
AS many banks seek out the cost advantages on offer through remote delivery platforms such as the internet, they should be very cautious.
Short-term cost advantages are unlikely to overcome the potential long- term damage to personal customer relationships.
By considering the active migration of customers online, banks run the risk of transferring bargaining power to the customer as never before. By proposing to reduce the degree of personal interaction enjoyed by the customer through branch platforms, for example, banks will run the risk of making price and not service the criterion for differentiation in the market place.
As an industry, do banks really want customers to choose between them purely on price; and do they really think they are sophisticated enough to manage and develop customer relationships through online delivery platforms and differentiate on this basis?
On the international stage, a key issue relating to banks embracing remote technological platforms is the impact this will have on the quality of customer relationships.
An editorial in a recent edition of Bank Marketing, in the US, cautions that: "Banks are slipping on almost every measure of relationship quality... one reason is the vulnerability of relationships in an alternative delivery environment."
While the importance of technology in customer-bank interactions at many levels remains undisputed, commentators continue to emphasise the importance of socialisation in the service encounter and how customer evaluation of these encounters is shaped by social and personal forces.
This socialisation is highly important and relationship parties have been found to derive complex, personal, non-economic satisfactions as they engage in 'social' exchange.
There has been relatively limited research conducted with regard to the propensity and motives of customers to use technology when interacting with their banks. …