Evidence is building that hard times in the banking industry are translating into less satisfaction among customers.
According to a survey to be released today by CFI Group, bank call centers had the largest drop in customer satisfaction among eight industries from last year. The Ann Arbor, Mich., research firm said one reason for the drop is that customers are calling under more unpleasant circumstances.
"To the extent that people are calling for fear of losing their homes, rather than to get another box of checks, it's clearly a very different interaction," said Sheri Teodoru, a program director and partner at CFI Group, who wrote a report based on the survey.
An increase in banks' use of offshore call centers, and customers' perceptions of that trend, played a role, CFI Group said. Still, some observers say that cutbacks are also hurting the quality of service at domestic centers.
A report released in May by J.D. Power & Associates also gave banks lower marks in customer satisfaction. The primary driver in that finding appeared to be an across-the-board rise in fees.
Of course, it can be hard to change providers for a checking account or mortgage. CFI Group's report acknowledged "significant switching barriers" for financial services customers. However, the 2,200-consumer online survey found that bank customers are four times more likely to defect when they hang up the phone with unresolved issues than if the issue was resolved.
Rita Wood, the president and managing consultant at Network Direct Inc., a Van Nuys, Calif., call center consulting firm, said it is easier for financial services firms to blame low customer satisfaction on the mortgage crisis than it is to blame cutbacks in call center training, monitoring, and quality control.
"When you start to cut back, that means you're monitoring fewer calls, and you reduce the supervisor and managerial head count, and those are the things that really impact the customer experience," she said.
During the height of the housing boom, from 2003 to 2006, financial services firms had "a big focus" on managing outsourced telemarketing firms that were offering various mortgage products, Ms. Wood said.
But those outsourcing programs ended early last year, and after that "there was a huge emphasis on reducing costs wherever possible, so I'm not surprised by the results" of the CFI survey, she said.
Bank call centers' overall customer satisfaction score in the CFI Group survey dropped six points on a 100-point scale, to 71, a reading slightly below the average for the eight industries. CFI Group based its methodology on the University of Michigan's American Customer Satisfaction Index.
Though 90% of customers said in the March survey that they had a good experience with their bank's call center, 41% of those reporting a bad experience were at risk of defection, and half have already decided to leave, CFI Group said. The rest of the dissatisfied customers "have already spread the word about their negative experience."
The survey said that "more than twice as many customers believe their bank contact center is located offshore" than in last year's survey. This year 15% of consumers said their bank's call center is in a foreign country, versus just 6% a year earlier. The majority of respondents said they would conduct their business differently if they knew their bank's call center was located outside the United States.
This trend was "a key driver in the decline of customer satisfaction with banking contact centers," CFI Group said. Banks' offshore call centers posted an overall score of 61, while those located in the United States posted an overall score of 73. The research firm cited the difficulties of communicating with the call center staff, the likelihood that a problem will not be resolved, and "some degree of resentment" that jobs are being sent to a foreign country as factors in the difference between the scores.
"In a down economy, with many Americans losing jobs and seeing higher unemployment, there's more of a negative reaction to offshore call centers than there was a year ago," Ms. Teodoru said. "It's just a different climate, and having a job offshore hits closer to home."
The survey gives banks high marks for "right-channeling," or reducing call volume by directing customers to the Internet. Just 30% of customers were unable to resolve their issue through the Internet before contacting a call center, down from 42% last year.
Web site improvements have made a big impact in reducing overall costs, because customers find answers online, CFI Group said.
At the same time, callers tend to have more challenging questions that require additional training.
The report found that consumers whose issues are resolved on the first call are 49% more likely to continue doing business with the company than those whose issues are not resolved.