Banking Customer Service, Branches, and Online Banking Analysis

This assignment delves into the critical aspects of the banking sector, starting with the premise that superior customer service directly leads to enhanced customer satisfaction and brand loyalty. The analysis supports this statement, highlighting the significance of customer-centric strategies and th...Read More

1. Nowadays many banks realize that all advantages, which they want to establish
through their core products are quickly, wore away as others banks has the same
products being offered. However, since it's a well-known fact that no business can
exist without customers, the important strategy is focused on providing the high-
quality service for the customer. Therefore, Better Customer Service Leads to
Better Customer Satisfaction and Brand Loyalty in banking sector. Do you agree or
disagree? Explain with Examples.
Ans: Satisfaction is an overall customer attitude or behavior towards a service provider,
or an emotional reaction towards the difference between what customers expect and what
they receive, regarding the fulfillment of some desire, need or goal. Customer loyalty, on
the other hand, is the result of an organization’s creating a benefit for customers so that
they will maintain and increasingly repeat business with the organization.
Undoubtedly most industries and businesses persistently endeavor to maximize
customer value. Customer service varies by product, industry and customer. It however,
assume important dimension in service delivery and sales of product. This is because
service firms such as banks have to retain their customers and win new ones if they are to
remain in the market. Nevertheless, it is a requirement for corporation survival,
profitability and growth if that service organization wants to hold its own in competition.
The importance of customer satisfaction cannot be dismissed because happy
customers are like free advertising. Many of us have heard of the current trend for
businesses to become highly customer-centric, that is to put the customer at the centre of
our business in terms of our strategies, actions and processes. For most of us, old truths
still hold well, such as it is easier and more profitable to sell to existing customers than to
find new ones. In practice, organizations are increasingly setting themselves strategies to
measure and ensure customer retention, and charging their staff to be more customers
focused and service-oriented. Customer satisfaction holds significant importance in
corporate sector because without satisfied and loyal customers, you don't have a business.
A single unsatisfied customer can send away more business from your organization than
10 highly satisfied customers. The more you focus on customer satisfaction and retention,
the more long-term business you will get. It’s worth to focus on customer satisfaction

strategies; no matter how large or small your organization is as a well known fact is that
referrals only come from customers who are “apostles”.
Banks are competing intensely in a highly competitive environment to offer
quality oriented services according to customers’ expectations. Various important parts of
banking sector like operations, service quality, employee satisfaction, customer
satisfaction, financing products, efficiency, financial performance are being studied by
many researchers to better understand and serve the community at large. The high quality
relationship with customers is the main influence of a successful service provider “which
determines customer satisfaction and loyalty”. Therefore I agree “Better Customer
Service Leads to Better Customer Satisfaction and Brand Loyalty in banking sector.”
2. Today, constant progress in service quality from the bank is a crucial need for their
customers to stay loyal, due to the increasing awareness among bank customers’
rights, their changing demands, and competition. As banking becomes increasingly
digital, one question continues to plague retail financial institutions: Do we still need
branches? Write your opinion and support your ideas with examples.
Ans: The future of banking lies in branches and technology – enabling customers to
bank where they want, how they want and when they want. Yes, customers are adopting
mobile and digital banking at a pace we’ve never seen before. But the importance of
having a branch in a convenient location is as important as ever for consumers.
There are customer segments who value the customer experience associated with
familiar faces and working with people you know. While certain banking products lend
themselves to automation, other products such as those pertaining to commercial banking
and wealth management perform best with the deeper level of interaction found in branch
banking relationships.
Consumers continue to see the value of branches for the “human factor.” In a
research 24 percent of consumers say they would consider a branchless bank, nearly 90%
of customers believe that they will continue to use their branches, and an increasing

number of consumers believe that the branch is the single most important channel. The
key to success will be to create a new mission for branches—moving away from simply
serving customers—to adding tangible value for customers by educating them through
digital tools, assisting them through problem solving and enabling them to make their
own financial decisions with thoughtful and well-timed advice.
There are many reasons for the continued necessity of branches, including
concerns over internet security, simplicity of use and a lack of knowledge surrounding
the capabilities of online and mobile banking. However, the most powerful force that will
keep physical branches alive and well for many years to come is the instinctual human
desire to meet the people they are entrusting with their money. There is no technological
substitute for the trust building that occurs when you can meet with someone face to face
and shake his or her hand.
For example, maximum population of Nepal may not know the process of using
digital platform or may not have availability of such platform. Reducing the number of
branches might affect the experience of that population.
Branches are not in demand like they once were, due to the rise of digital banking.
But retail branches will continue to maintain a prevalent role in acquiring, retaining and
serving customers across digital and physical channels. Fewer, smaller, smarter and more
open: That’s the future of retail bank branches. The role of the bank branch is still essential for
financial institutions and allows them to differentiate on customer experience and brand value.
They’re evolving, but still very much needed by consumers. Hence, I believe banks still need
branches even though banks are increasingly becoming digital.
3. The World Wide Web has permeated virtually every aspect of modern life. If you
have access to a computer with an Internet connection, an almost limitless amount
of goods, services and entertainment choices are at your fingertips. You can do just
about anything online, including your banking and financial transactions. What are
the advantages and disadvantages of online banking? Explain with examples.

Ans: As financial technology progressed, traditional banks began to explore the option
of offering online services. There’s no doubt that online banking can be convenient,
whenever you turn on your computer or smartphone, your bank is there waiting for you
But there are other advantages, and disadvantages, as well which are listed below.
Advantages
i. Banks are open for business anywhere there is an internet connection. Other than
times when technical maintenance is being done, they are open 24 hours a day,
365 days a year. Real-time account balances and information are available at the
touch of a few buttons. This makes banking faster, easier, more efficient and even
more effective because consumers are able to always stay on top of their account
balances.
ii. The lack of significant infrastructure and overhead costs allow direct banks to pay
higher interest rates on savings and charge lower mortgage and loan rates. Some
offer high-yield checking accounts, high-yield CDs and no-penalty CDs for early
withdrawal. Some accounts can be opened with no minimum deposits and carry
no minimum balance or service fees.
iii. Online banking now includes mobile capabilities. New applications are
continually being created to expand and improve this capability on smartphones
and other mobile devices.
iv. Accounts can be automatically funded from a traditional bank account
via electronic transfer. Most direct banks offer unlimited transfers at no cost,
including those destined for outside financial institutions. They will also
accept direct deposits and withdrawals that you authorize, such as payroll deposits
and automatic bill payment.
v. One of the great advantages of online banking is online bill pay. Rather than
having to write checks or fill out forms to pay bills, once you set up your accounts
at your online bank, all it takes is a simple click — or even less, as you can
usually automate your bill payments. With online bill pay, it’s easy to manage

your accounts from one central source and to track payments into and out of your
account.
Disadvantages:
i. A traditional bank provides the opportunity to develop a personal relationship
with that bank. In online banking customers are typically handed off to an
anonymous customer service agent who is unlikely to know from the next
customer. If someone has a good relationship, who can help and who knows well
can be a major advantage over a strictly online banking relationship.
ii. If there’s a power outage, or if servers go down, you might not have any access
to your account whatsoever. While some banks offer a phone number for
customer service, it might be overwhelmed if online access is down. With a real
bank, you can always find someone to talk to in the branch.
iii. While many online banks are reputable and well-established, sometimes it can be
hard to feel comfortable with a bank that doesn’t have a physical presence,
particularly when large sums of money are involved. There’s also the risk of
identity theft if someone gains unauthorized access to your account via a hacked
or stolen password or log-in credentials.
iv. If your business is located in a rural or remote area, your Internet options could be
limited. Depending on your type of business, this can make conducting
transactions difficult. For example, if you operate a home-based business and you
don't have access to a high-speed cable connection, you may have to use a slower
dial-up service. As a result, your business banking may take more time, or you
might even experience times where you can't get online.
The rise of internet banks has increased the competition for your banking
business. While both online and brick-and-mortar banks offer unique benefits and
drawbacks, it may not be wise to do your banking exclusively with either option.
Although it's not possible for everyone, the best play may be to split your banking
between both in-store and online services and enjoy the conveniences and savings of

internet banks while maintaining the customer service and personal relationships a
physical branch can provide.