As many of you may have read in my bio, I grew up in a developing country, and recently visited my family there over the holidays. While I was there, I had the opportunity to make a pretty simple transaction at a banking institution, and was so annoyed by the time I left I was determined to make my next blog entry about the customer experience.

We’ve written about the customer experience before at the Operations Council. Some of the main conclusions I’ve personally derived from our research are that:

1) Factors critical to the customer experience with a financial institution are very different than factors that drive the experience in other industries we try to model ourselves after. Banks and insurance companies are not hotels!

2) The biggest loyalty gains (as defined by a customer’s intent to continue to do business with, give more business to, and recommend an institution) come from truly understanding customer expectations and meeting those expectations, rather than arbitrarily crafting a strategy to create “customer delight”.

3) The customer experience is about much more than customer service, and factors under Operations’ control, such as processes, forms and systems, just to name a few, have a big impact on that experience.

There are a few more conclusions, but I won’t get into them at this point. At the risk of alienating my colleague Scott, who literally just finished an entry about how he thinks we focus too much on the process, I’d like to focus on point number three above… which leads me back to my branch experience over the holidays.

While the people who served me on that occasion were very helpful and clearly quite competent, there were so many required steps involved in what should have been a relatively simple process (exchanging $100 for the local currency) that I couldn’t help but feel put off after the experience was over. I first had to visit a customer service rep who quoted me an exchange rate and asked me to provide identification, as well as fill out a form. That customer service rep, however, was not authorized to handle cash, so I had to go to a teller who had me show identification and fill out another form. When I asked why I had to show ID twice and fill out two different forms, the response I received was that this was a required anti money laundering procedure, aggravated by lack of integration between the customer service platform and the teller platform. Needless to say, that didn’t make me feel any better.

I’m not sure if financial institutions stand to gain or lose customers due to this sort of issue (although our research suggests they do), but it certainly can’t be good for business when your customers associate you with feeling annoyed.

What do you think?