Regulation: An excuse for providing bad customer experience or is there a way around it?

Is government regulation an excuse for providing below average (not to say bad) customer experience? Answer honestly!

We have worked with companies from a range of industries but every time we speak with a company from the financial or the pharmaceutical sector the first thing we hear is “we are highly regulated” which is intended to say “there is so little we can do”. Really?

I recently had some interactions with banks in Eastern Europe (won’t name the country because the principles I’ll be talking about could be applied anywhere) that made me think about the regulation and internal bureaucracy in some organisations. I went to get some cash from the nearest ATM as I could only pay cash to a local garage that did some work on my car. I used my UK bank debit card. When I inserted the card I heard funny noises coming from the ATM but I thought I hadn’t inserted my card properly into the machine and pushed it a bit further. The ATM then swallowed my card and I was left with no money and no card, 2000 miles away from my bank and just a couple of days before I was due to drive these 2000 miles. It was 5:30pm, half an hour after the bank close but I could still see some people inside. I knocked with persistence and a female manager came out, unlocked the door and opened it slightly. I told her that the ATM swallowed my card and that there must be a problem with the machine. She said the machine was working properly and that there must be a problem with my card. She went inside to check something and upon return said that I’ll receive my card from the bank that issued it. I said that the card issuer is a British bank, she went back to check what the procedure for this was and said that my card will be sent to the capital, they will do some security checks to see if it’s reported stolen etc. and will then send it to my bank. I explained my situation i.e. that this will leave me with no money when I need to pay a garage, drive 2000 miles to get back home and that I am due to leave in just a couple of days. She, on her part, said “I understand but mister you need to understand that we have procedures and I can’t do anything about it” and closed the door.

Luckily I had a friend that works in the headquarters of this same bank. I called him right away and while talking to him the bank’s branch manager came out. She asked who I spoke to and told me to come back in the morning and they’ll see what I could do. Later in the night a manager from the head office called the branch manager to speak about my case. In the morning I went in the bank equipped with all sorts of IDs, documents etc. They took photocopies of my bank card and my ID and sent them by fax / scanned (not quite sure) to a department in the bank’s headquarters in the capital. The official procedure would require sending my card physically to that department. Towards the end of the day as I didn’t hear anything back from the bank I started phoning people. My friend said that they’ve tried to find the person responsible for reviewing the case but couldn’t reach and talk to him and suggested I phone my bank. I had that in mind but since it appeared that they treated my case in a special way I didn’t want to make things too official, but hence I had to. I called my bank in the UK. First, I spoke with an Indian representative who appeared to be following his script and didn’t understand my needs so I requested to speak with his supervisor. At that point I was thinking “I need to switch to a bank that provides a better customer experience as they could save me in times of trouble”. I was transferred to the manager of complaints. I said “I don’t have a complaint but I have a problem for which I need your help to resolve”. I said that I want them to write an e-mail to that bank saying that “my card is not reported stolen or lost, there are no restrictions on my account and that they have spoken to the card holder”. She said that they can’t send an e-mail as this is sensitive information but they can send a fax in the next 10mins. That worked equally well for me and I was very grateful to the complaints manager.

I called the bank to check that they have received the fax. They acknowledged it and said it was sent to the headquarters. On the next day I received a call inviting me to collect my card from the branch. I went in and signed a number of documents. It appeared those are part of the normal procedure. The only thing that was specific to my case is that they didn’t send the card physically to the capital so I received it in the last day before my departure. Imagine if in my situation I was a tourist that didn’t know anyone in the country and had no other cards (this happened with a colleague of mine in Africa). Apparently there is a legal process that can take less time and is better for the customer (i.e. he can get back his card from where it was taken from him instead of getting it back home where he has other means to get cash) and even cheaper for the bank (i.e. no need to send couriers etc.). Perhaps I made a precedent. In the common law countries when a judge makes a precedent that becomes the norm.

I doubt though that this will become the norm for this bank. Why? The language used by the branch manager, the deputy manager and manager that dealt with my case suggested little or nothing depends from them and there doesn’t appear to be a way for front line employees to provide feedback or initiate changes to processes. There is a lot of bureaucracy and decisions are taken centrally, which leaves branch managers and most employees with little or no empowerment. Many organisations talk about “walking the extra mile for customers” but they haven’t left any room (empowerment) for their employees to actually walk (the talk).

There is also no formal way for employees to provide feedback for what’s happening on the front line and apparently no one that is charged with looking after the customer experience. Thus there isn’t anyone to which they could provide informal or even anonymous feedback. Just as countries have the institution of the Ombudsman to represent and look after the interests of the public, organisations should have a similar type of role so there is at least one person who wears the customer hat on and that employees could provide feedback and refer customer cases to. If the organisation is serious about its intention to provide a good customer experience than the Ombudsman should be supported by a Customer Council. We all know a lack of coordination between an organisation’s departments can be one of the key factors in causing a poor Customer Experience. As an end to end Customer Experience touches many parts of the organisation the role of the Council is to bring the various internal stakeholders together and address the customer experience challenges the organisation faces. This is also a way to fight the silo mentality within the organisation. For more on who should attend the meetings and what a typical agenda should look like read here.

Finally I am back where I started. All this is good but the problem is “that’s the procedure set by the body that deals with the cards” or set by the government regulator etc. Well if there is a will, there is a solution even to government regulations! We have invited First Direct Bank to speak to some of our clients on many occasions. First Direct are the bank with the highest customer satisfaction ratings in UK. Their ratings are in the mid 90s percent – much above those of the most high street banks which are in the low 70s percent range.

In First Direct they know that the intent of regulations is to safeguard the interest of consumers and when they see that a new regulation will actually change the process to the worse for customers they work with the regulator to find a way that suits the purposes and intent of the regulation but also doesn’t have a negative impact on the customer experience.

So we know from them that it could be done. If the organisation did had a Customer Experience Council and an Ombudsman, the Ombudsman would have presented this case, which would have been fed to him by the employees and the legal team would have to be more inventive and supportive in front of all other managers and try to come up with a way to resolve such issues in future. Many of our clients have introduced this way of working and we have already seen some of them reap the rewards. For example one of our clients that introduced Customer Councils found that the regions that had adopted them had a Net Promoter Score® that was on average 10% higher than those of the other regions. They had also found that a 4% increase in their Net Promoter Score® equalled 1% increase in the volume of cargo shipped with them. Learn more about how they did it here.

P.S. At the end that bank also made 4% commission from my transaction. This also comes to prove that customer experience efforts bring rewards. They would have missed it if they had sent my card to UK.