Article from WOW awards newsletter 02/05/12…
This was the headline in the London Evening Standard on 26th of April.
Those of you who know me will know that I never name and shame companies. But I really did find this article quite fascinating. It made me think…
The article describes how profits dropped by 40% (£243m) as the company was hit by higher regulatory costs, increased funding costs and a weaker economic background. And their CEO, Ana Botin, said that they did not expect to see any great improvement in 2013.
I’ve been a customer of Santander (Abbey as it once was) for about 40 years. I’m also a customer of two other banks and work with many more. If you asked me what it was that caused them to see a fall in profits I wouldn’t have said it was down to increased costs.
My feeling is that Santander has been falling behind the rest of the sector in terms of customer service. Not only have they failed to keep up with their competitors but they have failed to realise the need to grow the business through service.
The article goes on to say that increased costs have been offset by “deepening of our customer relationships”. But I’m not seeing it. “Too little, too late” I’d be tempted to say.
So who is setting the bar in the world of finance? First Direct is the one that I hear most about. Metro is the one that I feel is really setting the standard in the UK.
Banks benefit from what I call “Customer Inertia”. It’s bit of an upheaval for customers to change banks – much more so than it is to change insurance company or supermarket. So Santander may actually be benefiting from this inertia. But as the technology improves and people like Metro can open an account in less than 15 minutes, that inertia is going to get less.
Watch out Santander. You might be trying to deepen the relationships but you might end up doing it with even less customers.