'Wake-up call' leads to RBS Customer Charter

Published on Saturday 12 June 2010 14:22

The banking giant is attempting to rebuild trust in its brand, writes Terry Murden

BANK customers have seen it all before: long lists of pledges to provide a top-quality service with a smile and with their best interests at the core of everything they do.

Well, we all know what happened next. And now Royal Bank of Scotland is having another go. Today it publishes a Customer Charter, which may sound like a Magna Carta for the box-ticking era, only this one is inspired by the customers themselves, 30,000 of them.

Brian Hartzer, whom chief executive Stephen Hester lured to Edinburgh last August from a comfortable career in Australia, has been talking to customers to find out what they want from the bank. They've kept it simple, and to the point.

"Most of them just want us to do the basic things well – shortening queues, extending opening hours, having a greater role in the community," he says.

The responses have been codified into the charter, committing the bank to a series of tasks that range from a basic requirement to provide a "friendly and helpful service" to the more demanding early morning and late-night opening in 200 branches by the end of the year.

It is easy to be cynical about these things, but the charter does set down some measurable objectives behind the promises to be nice to everyone. It aims to serve the majority of customers queuing in branches within five minutes by introducing something called a "queue measurement tool" to the busiest 300 branches. There is also a pledge to stay open for business if it is the last bank in town and it will consider a range of options to ensure a local banking service is available.

Apart from talking to customers, RBS has consulted with consumer organisations including Citizens Advice Bureau, Consumer Focus and Money Advice Trust, whose chief executive Joanna Elson welcomed the charter and said it was a positive step to set out for customers what they can expect.

Hartzer, a New York-born banker, worked for ANZ in Australia where in the 1990s he experienced the sort of customer discontent and loss of faith that erupted in Britain in the wake of the breakdown in the banking system. He held the somewhat cumbersome title of chief executive officer – Australia and global segment lead for Retail. In essence, he was directly responsible for the retail, SME, and wealth businesses and over five years or so ANZ increased profit in these businesses by 50 per cent and improved its market share of Australian retail customers from fourth to second position overall as well as being recognised as having the best customer service of any bank in the country.

Hester hired him last year, rewarding him with an even longer job title – RBS executive committee member responsible for the UK retail, wealth and Ulster Bank business divisions. When he arrived in Scotland he found the banks in poor spirits and customers not being given the attention they deserved.

"The retail banking industry in Britain had driven itself off a cliff," he says. "In my mind a sustainable business needs balance between shareholders, customers and staff, but this industry was focused on short-term shareholder value, and therefore all the other elements suffered."

A first move was to cut fees, but price was not everything and Hartzer knew he had to tackle customers' loss of trust. "We cannot create a good business if our customers do not feel they are getting good value," he says.

Thirty thousand branch and support staff have been told about the charter over the past week and Hartzer says that they have shown a willingness to embrace it. The task is little short of transforming perceptions after a rotten two years which has seen profits in the division fall by 90 per cent and in the past year 1.8 billion written off in defaults on loans, credit cards and mortgages.

Customers have remained patient, with fewer desertions than some may have expected. It is probable some of this "loyalty" is due to a lack of alternatives or an unwillingness by customers to go through the hassle of changing banks, but RBS claims it opened 4.5 million accounts last year and overall customer numbers are up. In current accounts it retains a UK market share of 18 to 20 per cent, making it the third-biggest bank.

An issue needing attention is a long period of under-investment in technology, training and the branch estate, all of which are expected to improve the customer experience.

"We are absolutely committed to how we can turn this back into a business that people are proud of," says Hartzer, delighted to have picked up an award last week for online banking on the back of some encouraging feedback on customer satisfaction.

"We understand that we got it wrong and it has been a colossal wake-up call for us. A part of the thinking behind this new charter is that we know we still have a lot of work to do."