Public Bank Berhad is Malaysia’s third largest banking group, and the fifth largest company in terms of market capitalization. Founded on 6 August 1966, in its relatively short history, the bank has achieved many significant milestones and won numerous awards and accolades for its peerless services. Its core business of retail banking and maintains its leadership in the retail banking market and is committed to its goal of being a one-stop financial center in Malaysia. The Bank’s tagline is, “Excellence is Our Commitment”, and it prides itself on the quality of its service.
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Public Bank is a leader in terms of customer service, as can be seen in the many awards it has won over the years. Since the Bank offers numerous services and studying all of them in detail is beyond the scope of this simple research, this report focuses on one area in which it excels in customer service, which is its teller service. This area was chosen primarily because it has the most direct form of customer interaction and the writer would like to learn more about its success in this area. The report also aims to identify gaps in the service quality model and to provide suggestions on how these weaknesses may be overcome.
2. Bank Teller Customer Interaction at Public Bank
While most banks are gradually phasing out bank tellers in favour of automated tellers or online banking, Public Bank still maintains a large number of tellers. The reason is that the founder believes that the customer must always come first and customer comfort is of paramount importance. Older customers in particular are unfamiliar with and uncomfortable using the more modern forms of banking modes so the bank caters to this group by still providing the traditional form of banking via teller services. Public Bank is unique in the sense that it regards word of mouth as the best form of advertising. It does not spend as much as other banks on advertising as it feels its customers are the best marketers. Hence, it places the utmost importance in satisfying its customers.
Public Bank has a Knowledge and Training Center in Bangi to train all staff, including tellers on how to perform their jobs to meet the bank’s stringent and uncompromising standards. Tellers for instance are required to greet their customers with a smile and “hello”. Single transactions need to be completed in one minute or less, while double transactions need to be done in two minutes or less. This emphasis on speed and efficiency is what sets the Bank apart from its rivals. At the Knowledge and Training Centre, tellers are taught how to perform their tasks efficiently and precisely. Unlike most other banks which turn customers away to the automated machines, Public Bank tellers are taught to always receive cheques or cash deposits from customers. It is this helpful and obliging nature which makes the Bank popular among customers.
In addition to training, tellers are also monitored to determine their level of efficiency. A real time log is in each teller’s computer which records the time it takes to perform each transaction. Employees who consistently perform poorly are advised to improve and a few are even given warnings. Public Bank occasionally conducts simple customer feedback to determine their overall satisfaction with the Bank’s services, though this more on an ad hoc basis.
3. Service Quality Theories
3.1. Service Quality Gap Model
Now let us examine Public Bank’s teller services in terms of some service quality theories. One of the most popular of these theories is the Service Quality Gap Model, which was developed by Parasuraman, Zeitham and Berry (1985). According to them, each organization experiences five main gaps in service quality when they attempt to satisfy customers. These five gaps are as follows:
Gap 1: The distance between customer expectation and management’s perception of that expectation. Narrowing this gap requires survey research.
Gap 2: The perception of management and the real specification of the customer experience. Management needs to ensure that the company is providing the level of service that is believed to be required.
Gap 3: This occurs during the time between the specification of the experience to the actual delivery of the experience. A customer audit is essential to ensure that delivery of services conform to their specifications.
Gap 4: This is the gap between what is communicated to the customer and the actual delivery of the customer experience. Companies should never exaggerate what they can deliver to customers as this will invariably raise their expectations and when these expectations are not met, there is great customer dissatisfaction.
Gap 5: This final gap occurs because of the customers’ expectation of the services and their perception of the services. Expectations by customers are formed by past experiences, personal requirements and information from acquaintances. Hence, it is vital to conduct periodic transactional surveys once services are delivered to gauge the customers’ perception of services.
The Service Quality Gap Model is illustrated in the following diagram:
This theory identifies two main types of gaps. The first is termed the customer gap while the second is called the provider gap. Clearly, the second type is an internal gap for the company. The model serves three main functions. One, these gaps provide insight and recommendations with regards to customers’ perception of service quality. Two, customers normally use ten dimensions to formulate their expectations and perceptions about service quality. These ten dimensions are communication, access, competence, credibility, courtesy, reliability, securities, responsiveness, understanding and tangibility. Finally, the model assists in identifying, predicting and generating main factors that result the gaps to be unfavourable to the service company in fulfilling customer expectations.
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3.2 Analysis of Fail Points
One of the fail points is in regards to certain types of transactions. Most simple single transactions like deposits, withdrawals and bill payments can be accomplished within the stipulated limit of one minute. However, some types of transactions like demand drafts take longer time to process. While the bank has reserved special counters for these purposes, customers who are accustomed to the speed of delivery for other transactions end up annoyed and frustrated as these transactions can take up to fifteen minutes to process. Why this is so because these more complex transactions require approval from the system mainframe which may take time or it may need the authorized signature of bank officers who may be busy with other tasks and cannot attend to it immediately. This represents a fail point in terms of the Bank’s assurance of impeccable services and is something that it is hard at work to remedy.
3.3 Problematic Interaction with Customers
This occurs when there is unrealistic customer expectation, due to a number of reasons. One example is expecting a transaction to be completed within ten seconds, which is unreasonable for complex transactions. Two, there may be demands against company policy, for example withdrawing money from a relative’s account without an authorized signature. Three, some customers are very rude and annoying and they treat bank tellers shabbily. Such uncouth behaviour tests even the most patient bank teller. On the rare occasion, customers may be even drunk and disorderly.
3.4 The Service Encounter Triad
Services are generally typified by an encounter between a customer and a service provider. This interaction is the primary reference point for the customer in defining the quality of service. In order to achieve a cost leadership business strategy, a business will improve efficiency by standardizing service delivery. This is done by implementing very stringent operating procedures which would have the effect of minimizing the variability of the service. This is done at Public Bank as all transactions have to be done according to the standard operating procedures. Companies may also decide to present customers with few options and no personalization of services which will improve the uniformity of delivery. This can be observed in all commercial banks where simple and routine transactions are standardized with no personalization.
3.5 Satisfaction Mirror
One way of enhancing service effectiveness at Public Bank is to adopt the satisfaction mirror approach. When customer satisfaction is higher, employee satisfaction will also become higher. Hence, the management should understand how this relationship works. For example, when customer satisfaction is high, they will make more repeat purchase. At Public Bank, an active customer is one who purchases five or more of the company’s financial products, like savings accounts, fixed deposits, credit cards, home loans and unit trusts. Hence, the Bank must be more familiar with customers’ needs and find ways of satisfying them.
Next, there is a greater tendency for customers to complain about service errors, either directly to the Bank or by word of mouth to others. This has the potential of tarnishing the Bank’s reputation. To overcome this, tellers must be given opportunities to recover from errors and not allow them to worsen.
When there are fewer errors, operating costs become lower. This in turn is mirrored by high productivity. All these actions translate into improved quality of service which in turn leads to better results and more customers.
Even though it is committed to excellence, there are still minor gaps in the service quality model at Public Bank. The first step is to identify these gaps so that top management is aware of what is lacking. There are many tools that can be used to identify these gaps like SERVQUAL. These gaps need to be filled so that the Bank can further enhance its reputation for impeccable services.
Gaps that are caused by variability in human service are the hardest to remedy. Everybody has days when they are unwell or in a bad mood and this can affect the quality of service. The Bank has taken steps to improve uniformity of services but it is the small details like greeting customers with a smile may be difficult to achieve when the employee has had a long and stressful day.
Gaps that are caused by technical errors, for instance because of server failure can be solved by proper maintenance and servicing of equipment. This must be done on a frequent basis and in a manner that does not interfere with the normal flow of services. In addition, the Bank must ensure that its server can handle the load of its transactions and not slow down if there are too many. This requires additional investment in its IT hardware and software.
Public Bank is a leader in terms of its services. Yet, the Bank must not be content to rest on its laurels and must aggressively pursue its quest for excellence. Overall, the quality of its services is better than its rivals and the company has invested greatly in building up its human capital. Yet, as this report reveals, there are minor gaps in its services that prevent it from achieving perfection. While perfection may be an impossible goal, there are still ways in which the Bank can improve its overall services to take the company to the next level.
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