The Bankwatch

Tracking the consumer evolution of financial services

Bank of America focus on customer is disturbed by growth, or is it something else?

Every Bank says it focusses on customers. I found this article fascinating because it sounds so typical. They have an internal target for loyalty, yet their tactics are failing.

In its internal ratings, the bank strives for customers who rate their satisfaction a 9 or 10 on a 10-point scale — most recently about 52 percent companywide. The bank won’t divulge its goal. In the push for No. 1, Morais said the bank will look at other surveys such as the Michigan index.

To boost scores, Bank of America has a number of initiatives under way, Morais said. Last week, the bank announced a campaign to help educate customers about fees and how to avoid them. It has added incentives to give employees from executives to tellers a “very high stake” in improving service. And workers in branches and call centers have more authority to refund fees for certain clients.

The bank faces a delicate balancing act: ATM surcharges, late fees and other penalties contribute to the “noninterest income” that comprised more than half of the bank’s $18 billion in revenue in the first quarter. Satisfied customers, however, are key for the company’s future growth, Morais said.

The article goes on to hint about merger activity being the cause, yet Wachovia who have also been heavily engaged in mergers continue to beat BofA out on loyalty. We could debate the timing of the merger and acquisition activity, but overall their profiles are at least similar.

When I read the activities mentioned by the BofA representative, I caught a distinctly strange view for a supposedly customer centric bank. They are going to educate customers? This implies that customers just don’t understand; once they understand they will love BofA. Honestly, that’s how the quote reads.

But the telling part is in the last sentence, where they reflect that the non interest revenue comprises a large part of revenue. Brilliant observation, but not unique to BofA.

There is a fundamental difference in a truly customer centric Bank (firm) when compared to one that is defensive. This article strangely, makes BofA appear defensive.

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Written by Colin Henderson

June 12, 2007 at 22:05

2 Responses

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  1. I can’t help but think that a campaign run by a bank to educate customers about bank fees will be almost as effective as smoking education is coming from big tobacco.

    Anthony Sexton

    June 18, 2007 at 16:29

  2. Yhanks you9640c8a87349970f338896b1441c3ba3

    Yhanks you

    January 31, 2008 at 08:39

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