THE contrast between local and foreign banks could not have been starker.
DBS, UOB and OCBC's customers were all happier with their banks in 2013 than they had been in 2012, rewarding the three local banks with the top three scores in the banks sub-sector, in the latest Customer Satisfaction Index of Singapore (CSISG) report.
With this, they had also bucked the trend of Singapore residents' falling satisfaction with all the other foreign banks assessed. Citibank, HSBC, Standard Chartered, Maybank and others witnessed dips of 2.6 to 5.8 per cent in their customer satisfaction levels from a year ago, pushing the banking sector's score down to 69.4 in 2013, from 71.8 in 2012.
But the Institute of Service Excellence at Singapore Management University (ISES), which compiles the CSISG for two industry sectors every quarter, warned against reading too much into this divergence.
While the local banks have leapfrogged their foreign counterparts for a second year now - the first was 2011 - theirs was no outsized jump, but a gradual improvement. And though the three banks' scores ranged from 71.3 to 71.9 - above the banks' sector average of 69.4 - it is because of sharper volatility in the foreign banks' satisfaction scores that the banks' rankings have been shuffling over the past three years.
ISES director Caroline Lim said: "I would interpret it as a case of competitive dynamics. In the financial industry, it's cut-throat competition. So this year, the local banks are doing better, next year, the foreign banks may catch up, so on and so forth."
But the explanation for that volatility might well be more dull: survey methodology. ISES' survey is based on a random listing of addresses supplied by the Department of Statistics, which is representative of how residents are distributed across the island. Therefore, those polled would best represent Singapore's general population - the typical Singapore resident.
It could be that the local banks' customer mix mirrors the general population in Singapore more closely, and thus corresponds to the banks' target customer segments. But foreign banks, which are more likely to serve expatriates, might also fare more poorly on the survey simply because those polled are not the banks' target profile of customers, such as high net worth individuals, for instance.
That is not to say that the results have no bearing on foreign banks, though. "The survey serves a slightly different purpose for foreign banks. Say you are a foreign bank and you know the survey doesn't match your target profile, but still matches the general population profile in Singapore. "[A foreign bank] can treat it like a public sentiment score for the bank. It's still relevant, it just serves a slightly different purpose," said ISES academic director Marcus Lee.
Other bank-specific factors may have come into play too. For instance, Standard Chartered Bank attributed its 3.41 point drop to 70.1 points, from a score of 73.5 last year, to major projects last year that may have inconvenienced some customers.
Som Subroto, StanChart's regional head, retail clients, Asean, said: "In 2013, the bank carried out two big, bank-wide projects - the cutover of the core banking system and the subsidiarisation of the Bank's retail banking business." Despite these projects and the dip in satisfaction levels, StanChart's score remained above the sector average of 69.4.
Local banks' efforts pay off
Steering clear of sample-skewed comparisons to the foreign banks however, DBS, UOB and OCBC could still shout about the improvements in their own scores.
Susan Cheong, head of business operations and quality at DBS Bank, said: "We believe that in order to differentiate ourselves in an industry as commoditised as banking, we must put customers at the centre of all that we do." Of the three, DBS improved the most (4.4 per cent ) to top the sector with a score of 71.9 points.
Ms Cheong attributed this to several initiatives rolled out last year, such as the remodelling of several branches to incorporate new and more intuitive elements from DBS's flagship branch at Marina Bay Financial Centre Tower 3.
Where previously, DBS branches had a reception counter for enquiries and simple transactions, the new branches now have Welcome Pods to handle enquiries and direct customers to the service points, and a separate Quick Serve Counter for non-cash transactions that can be completed in 15 minutes.
This has helped reduce transaction time by two minutes a customer, she said.
Over at OCBC, which managed a 3.3 per cent jump to a score of 71.3 points, changes have also been made, not in a vacuum, but with data-driven customer insights and design-led thinking, said head of group operations and technology and group customer experience, Lim Khiang Tong.
"Our goal is to be the most customer-focused bank possible. More than ever, we've been talking to our customers, getting feedback and testing ideas," said Mr Lim.
Among other changes, OCBC has sought to make online and mobile banking easier to use, simplified products, transformed branches and created a new system that makes it really easy to open accounts.
As for UOB, its approach has been to make banking more convenient and relevant to its customers, by focusing on its own people, said Magdalene Boey, head, Service Transformation, Group Channels. Last year, the bank introduced an experiential training programme, which trained branch employees to pick up on non-verbal cues from customers so that they can empathise with and respond better to customers' needs.
"We believe that relationships and trust are fundamental to banking, and we have invested in training to instil in our employees the right mindset, skills and knowledge when serving customers," said Ms Boey. UOB's score of 71.4, a slight 0.3 per cent increase from 2012, was the second highest of all the banks.
Different strokes
One finding from ISES analysis of the banking and life-insurance sectors was that for any given company, customers' responses spanned a wider range of satisfaction levels. The impact of quality, value and expectations on customer satisfaction varied greatly across the customers of the same bank, suggesting that there was less consistency in the experience customers of a bank were receiving in 2013, compared to 2012.
OCBC's Mr Lim thinks that there is truth in this finding. "We have seen a similar trend through our internal surveys. This affirms our commitment to interact regularly with our customers and understand them better as their needs and expectations evolve," he said.
DBS, which considers itself the "universal bank" in Singapore, also thinks it is important to have a clear understanding of customers' diverse needs and preferences, said Ms Cheong. "We apply different strategies to engage our customers, to enable us to deliver a consistent experience for each segment," she added.
ISES academic director Marcus Lee thinks that increased variability is not surprising, particularly if a specific company is serving varied segments. For instance, for a bank very focused on high net-worth individuals, it would not be surprising if a customer who does not fit into this segment does not experience the same level of satisfaction as one whom the bank is actively wooing.
But this higher variability in responses, could also be due to changes in customer requirements. "It may be worthwhile for companies to investigate the relevance of their product and service offerings," said Dr Lee.
At OCBC, one new product, launched in January last year, is OCBC Money Insights, a personal financial management tool that enables customers to track expenses, set budgets, set saving goals and manage their cash flow. Together with the bank's improved online banking platform, this tool helped to grow OCBC's number of online banking customers by 12 per cent last year, Mr Lim said.
Ms Cheong said examples of products rolled out to target specific groups of customers last year, include the POSB HDB Loan and the DBS Home Connect mobile app, for homebuyers, and the POSB Invest-Saver, which is a combination of a regular savings plan and an exchange-traded fund and is targeted at the banks' young adult customers who are looking to start saving for retirement.
Banks may be able to do much to lift their customers' satisfaction, but external factors, such as regulatory decisions, could have a non-trivial impact on satisfaction levels too.
ISES's Ms Lim said: "In the financial services industry, the Fair Dealing guidelines serve to enhance rigour and robustness in financial advisory services. This may in turn positively affect customer satisfaction and even trust."

THE contrast between local and foreign banks could not have been starker.

DBS, UOB and OCBC's customers were all happier with their banks in 2013 than they had been in 2012, rewarding the three local banks with the top three scores in the banks sub-sector, in the latest Customer Satisfaction Index of Singapore (CSISG) report.

With this, they had also bucked the trend of Singapore residents' falling satisfaction with all the other foreign banks assessed. Citibank, HSBC, Standard Chartered, Maybank and others witnessed dips of 2.6 to 5.8 per cent in their customer satisfaction levels from a year ago, pushing the banking sector's score down to 69.4 in 2013, from 71.8 in 2012.

But the Institute of Service Excellence at Singapore Management University (ISES), which compiles the CSISG for two industry sectors every quarter, warned against reading too much into this divergence.

While the local banks have leapfrogged their foreign counterparts for a second year now - the first was 2011 - theirs was no outsized jump, but a gradual improvement. And though the three banks' scores ranged from 71.3 to 71.9 - above the banks' sector average of 69.4 - it is because of sharper volatility in the foreign banks' satisfaction scores that the banks' rankings have been shuffling over the past three years.

ISES director Caroline Lim said: "I would interpret it as a case of competitive dynamics. In the financial industry, it's cut-throat competition. So this year, the local banks are doing better, next year, the foreign banks may catch up, so on and so forth."

But the explanation for that volatility might well be more dull: survey methodology. ISES' survey is based on a random listing of addresses supplied by the Department of Statistics, which is representative of how residents are distributed across the island. Therefore, those polled would best represent Singapore's general population - the typical Singapore resident.

It could be that the local banks' customer mix mirrors the general population in Singapore more closely, and thus corresponds to the banks' target customer segments. But foreign banks, which are more likely to serve expatriates, might also fare more poorly on the survey simply because those polled are not the banks' target profile of customers, such as high net worth individuals, for instance.

That is not to say that the results have no bearing on foreign banks, though. "The survey serves a slightly different purpose for foreign banks. Say you are a foreign bank and you know the survey doesn't match your target profile, but still matches the general population profile in Singapore. "[A foreign bank] can treat it like a public sentiment score for the bank. It's still relevant, it just serves a slightly different purpose," said ISES academic director Marcus Lee.

Other bank-specific factors may have come into play too. For instance, Standard Chartered Bank attributed its 3.41 point drop to 70.1 points, from a score of 73.5 last year, to major projects last year that may have inconvenienced some customers.

Som Subroto, StanChart's regional head, retail clients, Asean, said: "In 2013, the bank carried out two big, bank-wide projects - the cutover of the core banking system and the subsidiarisation of the Bank's retail banking business." Despite these projects and the dip in satisfaction levels, StanChart's score remained above the sector average of 69.4.

Local banks' efforts pay off

Steering clear of sample-skewed comparisons to the foreign banks however, DBS, UOB and OCBC could still shout about the improvements in their own scores.

Susan Cheong, head of business operations and quality at DBS Bank, said: "We believe that in order to differentiate ourselves in an industry as commoditised as banking, we must put customers at the centre of all that we do." Of the three, DBS improved the most (4.4 per cent ) to top the sector with a score of 71.9 points.

Ms Cheong attributed this to several initiatives rolled out last year, such as the remodelling of several branches to incorporate new and more intuitive elements from DBS's flagship branch at Marina Bay Financial Centre Tower 3.

Where previously, DBS branches had a reception counter for enquiries and simple transactions, the new branches now have Welcome Pods to handle enquiries and direct customers to the service points, and a separate Quick Serve Counter for non-cash transactions that can be completed in 15 minutes.

This has helped reduce transaction time by two minutes a customer, she said.

Over at OCBC, which managed a 3.3 per cent jump to a score of 71.3 points, changes have also been made, not in a vacuum, but with data-driven customer insights and design-led thinking, said head of group operations and technology and group customer experience, Lim Khiang Tong.

"Our goal is to be the most customer-focused bank possible. More than ever, we've been talking to our customers, getting feedback and testing ideas," said Mr Lim.

Among other changes, OCBC has sought to make online and mobile banking easier to use, simplified products, transformed branches and created a new system that makes it really easy to open accounts.

As for UOB, its approach has been to make banking more convenient and relevant to its customers, by focusing on its own people, said Magdalene Boey, head, Service Transformation, Group Channels. Last year, the bank introduced an experiential training programme, which trained branch employees to pick up on non-verbal cues from customers so that they can empathise with and respond better to customers' needs.

"We believe that relationships and trust are fundamental to banking, and we have invested in training to instil in our employees the right mindset, skills and knowledge when serving customers," said Ms Boey. UOB's score of 71.4, a slight 0.3 per cent increase from 2012, was the second highest of all the banks.

Different strokes

One finding from ISES analysis of the banking and life-insurance sectors was that for any given company, customers' responses spanned a wider range of satisfaction levels. The impact of quality, value and expectations on customer satisfaction varied greatly across the customers of the same bank, suggesting that there was less consistency in the experience customers of a bank were receiving in 2013, compared to 2012.

OCBC's Mr Lim thinks that there is truth in this finding. "We have seen a similar trend through our internal surveys. This affirms our commitment to interact regularly with our customers and understand them better as their needs and expectations evolve," he said.

DBS, which considers itself the "universal bank" in Singapore, also thinks it is important to have a clear understanding of customers' diverse needs and preferences, said Ms Cheong. "We apply different strategies to engage our customers, to enable us to deliver a consistent experience for each segment," she added.

ISES academic director Marcus Lee thinks that increased variability is not surprising, particularly if a specific company is serving varied segments. For instance, for a bank very focused on high net-worth individuals, it would not be surprising if a customer who does not fit into this segment does not experience the same level of satisfaction as one whom the bank is actively wooing.

But this higher variability in responses, could also be due to changes in customer requirements. "It may be worthwhile for companies to investigate the relevance of their product and service offerings," said Dr Lee.

At OCBC, one new product, launched in January last year, is OCBC Money Insights, a personal financial management tool that enables customers to track expenses, set budgets, set saving goals and manage their cash flow. Together with the bank's improved online banking platform, this tool helped to grow OCBC's number of online banking customers by 12 per cent last year, Mr Lim said.

Ms Cheong said examples of products rolled out to target specific groups of customers last year, include the POSB HDB Loan and the DBS Home Connect mobile app, for homebuyers, and the POSB Invest-Saver, which is a combination of a regular savings plan and an exchange-traded fund and is targeted at the banks' young adult customers who are looking to start saving for retirement.

Banks may be able to do much to lift their customers' satisfaction, but external factors, such as regulatory decisions, could have a non-trivial impact on satisfaction levels too.

ISES's Ms Lim said: "In the financial services industry, the Fair Dealing guidelines serve to enhance rigour and robustness in financial advisory services. This may in turn positively affect customer satisfaction and even trust."