Improving service quality in rural banking: Strategies to adopt

BY: Joseph Akossey
Rural banks play a critical role in extending financial services to rural communities.
Rural banks play a critical role in extending financial services to rural communities.

The banking landscape in Ghana is increasingly becoming competitive due to rivalry among existing players, threat of new entrants, bargaining power of bank customers, availability of substitutes such as mobile money, insurance among others.

 Customers have also become sophisticated and demanding, expecting high service quality.

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Recently, some bank customers have been withdrawing their deposits from their banks because of high perceived risk in the form of financial risk (bank failure).

This is an indication that bank customers have become enlightened and are trying to play safe.


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In view of the competition in the banking industry, switching cost has become low.

This implies that bank customers can easily switch from one bank to another because they are exposed to various choices.

For ???RCB’s???? to be successful in this financial space, it is crucial to improve service quality.

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This article will , therefore, consider the strategies that ???RCB’s??? should adopt to improve service quality, remain competitive, ensure customer loyalty, improve brand image among others.

Strategies to improve service quality

Staff empowerment

To improve service quality, staff of RCB’s, especially customer contact staff should be empowered to enable or permit them to make a range of decisions to assist customers.

Employees sometimes face situations in rendering service to customers which is beyond the boundaries of existing policies. Through empowerment, staff are given the discretion to make decisions to further assist their customers.

 This will result in improved service quality. There is also the need to give some staff a limit to operate in order to enhance service delivery process.

 For example, giving branch managers a limit when it comes to granting facility without referring to the head office.

Besides empowerment, management should adopt open door policy so that customer contact personnel can easily approach them to get the necessary inputs which might aid them to render quality service to customers.

Recruiting/hiring right people for right position

Service such as banking is characterised by inseparability and variability. Hence, the need to recruit people who have the right attitude, passion, commitment and competency which will enhance the service quality being rendered to the customer.

It is worth mentioning that not everybody is well suited for customer service position. For example, people who are always in bad mood, have bad temper, unfriendly, low self-esteem, lack of passion to serve customers are not fit to occupy customer contact positions.

In view of the high unemployment rate in Ghana, there is the tendency for some board members and key management staff to use their influence to ensure that their relations are employed.

Even though it is not wrong, the person should be qualified and have the passion to serve customers so as to improve service quality to delight customers.

Provision of regular training

To improve service quality in rural banking, the importance of regular training cannot be overemphasized.

The ???RCB’s??? staff might need training in the areas of product

knowledge, customer service skills, telephone etiquette, the importance of customers, and customer relationship management among others.

Knowledge about product, pricing and other issues about the bank are important in order to ensure that customers are given accurate information.

When customers are given inaccurate information because of lack of adequate knowledge about product, pricing and other related issues, it will translate into poor service quality thereby affecting customer satisfaction.

In similar vein, lack of knowledge on the part of frontline staff which makes it impossible for them to handle basic enquiries from customers will result in disappointment on the part of customers.

Hence, the need to provide RCB staff especially customer contact staff training to have adequate product knowledge.

Some managers are sometimes reluctant to allow their staff to attend customer service training with the reason that they do not see any results after the training.

Let me point out the fact that, customer service training is meant to modify staff negative behavior and attitude as well as ensuring that they acquire the necessary skills to improve service quality.

Such training is not one-off (a day affair) but continuous.

There is a saying that people need to be reminded more than they need to be instructed and hence C.E.O’s/General Managers should allow staff to participate in customer service training.

After training, staff should be held accountable for poor customer service.

Staff motivation

According to the service-profit chain model, there is a strong relationship between employee satisfaction, customer satisfaction, customer loyalty and profitability. This implies that when employees are happy through motivation, they will be inspired to provide the best of service to customers.

Do you think unhappy staff can make a customer happy? Management of RCB’s should therefore motivate staff to improve service quality.

Staff who excel in rendering excellent customer service/high service quality should be rewarded to motivate them to do more.

Let me point out the fact that, motivation of staff is not always about money.

It can take the form of verbal appreciation which is intrinsic motivation. RCB offer banking services which are characterised by inseparability.

This means that the services cannot be separated from the staff who are providers.

The inseparability of service usually leads to an encounter between RCBs staff and customers.

When the staff are motivated, there would be positive moment of truth.

This will no doubt influence the customer’s perception of the service quality.

Indeed, improving service quality in RCBs will be difficult if employees are treated poorly.

Management should therefore view and treat employees as internal customers.

Reducing  communication gap

Communication gap occurs when a rural bank promise to offer XY which triggers customers’ expectations but unable to deliver to meet their expectations.

This create dissatisfaction and in worse case cognitive dissonance.

To improve service quality RCBs should not over promise what they cannot deliver.

Rather, they should promise what they can deliver and go the extra mile to delight customers by exceeding their expectations.

It is worth mentioning that, when promises made to customers through marketing communications such as advertising and personal selling are not fulfilled, customers might perceive RCBs to be unreliable which can impact negatively on the brand.

Measuring service quality

According to marketing experts 96 per cent of dissatisfied customers do not complain to the service organisation.

Hence, RCBs should track the level of their service quality through feedback by using techniques such as customer satisfaction survey, mystery shopping, net promoter scores among others.

This will help to improve service quality.

Establishing service quality standard

Banking as a service is characterised by heterogeneity. This means that, it is difficult to ensure consistency in service delivery.

This is due to certain factors such as mood swings of employees providing the service and personality differences among others.

However, RCBs should set basic service standard to improve service quality.

Here are examples; Turnaround time of making deposits and withdrawals at the banking hall should not exceed fifteen minutes, Tellers should greet customers and also give them a warm smile during their interaction.

Management should monitor to ensure that service standards are delivered by the staff.

In order to minimise variability of service delivery, RCBs should deploy technology such as ATM Platform, Mobile Banking and others to deliver services.

Conclusion

Staff of RCBs should work as a team to improve and offer superior service quality to customers.

Management of RCBs should examine their operations with a view to identifying service quality gaps and put forth earnest effort to close the gaps.

Among the gaps are; Communication gap, Knowledge gap, service delivery gap and customer gap.

The Author is the Head of Proven Trusted Solutions, an employee training and development and marketing research firm.

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