Besides market forces, one of the factors that dictate the fate of a business is customer feedback. This is especially important for institutions like banks, where product innovation is controlled by regulations and offerings are quite easy to match by competitors.
To ensure customer patronage, some banks have undergone revamps to create a more personalized experience for their clients. They now offer a wider range of products tailor-made for every possible customer, from teens to young professionals and the retired. For rural banks, however, personalized banking is not simply a business decision to keep customers from leaving; it is a feature that is truly intrinsic to its nature.
Because rural banks are community banks, each bank exudes a certain sense of individuality and belongingness to the locality where it is rooted—an edge that allows it to retain its market share despite the entry of bigger banks.
Even Bangko Sentral Governor Amando Tetangco Jr. sees the personal banking offered by rural banks as strength. Tetangco earlier urged rural bankers to study their localities’ unique demographics and use the knowledge to develop appropriate products and services for their clients.
Satisfying the demands of customers, however, should not be the only focus of banks. Protecting their interests and welfare is an imperative as well. In line with this, the Bangko Sentral ng Pilipinas (BSP) has developed and moved for the adoption of a Financial Consumer Protection Framework to institutionalize consumer protection among banks.
This move follows a report from the BSP showing that it received almost 2,500 complaints from bank customers in 2013. BSP Assistant Governor Johnny Noe Ravalo was earlier reported to have noted that majority of bank complaints were about impolite bank collectors, complicated withdrawal processes, and questionable interest charges.
Among others, the new consumer protection framework sets the standards for full disclosure and transparency, as well as for the protection of client information and fair treatment.
To promote transparency, banks are required under the new policy to provide complete, readily accessible information on the nature of a particular product or service. Moreover, banks are now also required to give customers at least two days as a cooling-off period after signing any contract.
As for protecting client information and ensuring fair treatment, banks are likewise tasked to establish an information security program, which shall be regularly monitored to store and protect confidential client information.
Akin to any other field, thriving in banking requires finding the right formula for business innovation, customer satisfaction and consumer protection. The central bank has always done its part to guide banks toward finding their ideal mix; it is now up to the individual institutions to take it to heart and truly provide a sound and effective environment that works for both the bank and the consumer.