What the big four banks can learn from Apple06 May 11 12:00PM EST |
This week’s media has been full of news about the four big banks’ latest record-making profits - $12 billion in profit over the past six months. One article that got my attention however was Business Spectator’s Apple can bank its winnings
by Charis Palmer. Given Apple’s significant cash pools, she pondered the possibility of Apple entering the banking industry.
This made me consider just how successful Apple could be if it decided to enter the banking industry whether directly or by acquiring a banking licence and then ‘open[ing] up its platforms to start-ups looking to trump banks, and developers building banking apps’ as discussed in Charis Palmer’s article.
Apple is considered efficient, flexible and responsive to customer needs in most instances*
. The good usability and typically easy interaction between their various products combined with their ability to consistently design products which meet consumer needs are all factors which contribute to its high customer loyalty. Indeed, Apple fans are often quite vocal about their love for their Apple products.
If Apple entered the banking industry, it would be interesting to see whether they would receive the same enthusiasm for their banking products. Judging by Apple’s track record, I wouldn’t be willing to bet against them. I’m certain that their IT systems would be up to scratch, would talk to their other products successfully and that I’d be able to access my money when I wanted to.
In comparison, the day after Westpac announced record profits, Westpac and St George’s IT systems went down and people could not access their money through the ATMs, branches or internet banking as a result. This follows systemic issues in the four bank’s IT systems with numerous other major IT failures over recent months.
The Sydney Morning Herald also reported (Bank costs carefully monitored as financial crisis wake
, 5 May 2011) that the banks cost-to-income ratios have been progressively falling over the long term. This is largely attributed to IT – “the automated teller machines, internet banking, phone banking and streamlined paperless processing of transactions”. It seems the rationale for these IT systems is primarily to increase revenue with customer service a secondary concern.
The banks could do well to take a few lessons from Apple and start putting their customers’ needs first. The four major banks consistently rate bottom in customer satisfaction surveys and are often the most expensive (see CHOICE’s Better Banking report
). CHOICE has been campaigning for efficient, flexible and responsive banking and until we start hearing the four major banks’ customers vocalising their love for their banks’ products the way Apple customers do we will continue to apply the pressure. * CHOICE has raised issues over Apple’s Australian iTunes Store pricing
after an analysis revealed Australians pay almost 50 per cent more than Americans for a basket of music tracks and apps.