Company Profile:
The Royal Bank of Scotland Group is one of the world leading financial services providers in the oldest banks of UK and takeover of National Westminster Bank in 2000.The Group has continued to grow its business around the globe and in addition to its strong UK presence it has offices in Europe, the USA and Asia. By the end of 2002, it was the second largest bank In Europe and the fifth largest in the world market capitalization.RBS has nearly 30 million customer’s world wide, largest provider of banking services to small, medium and large business across the UK. It is the second largest general insurer in the UK and leading provider insurance and corporate bank in the UK (RBS website, 2007).The Royal Bank of Scotland itself was founded in Edinburgh by royal charter in 1727.To several decades its traded solely from head office in Edinburgh, in 1783 its first branch office in Glasgow, and developed a large network of offices throughout Scotland during the nineteenth century. In 1999 the Bank of Scotland (main competitor of RBS) launched a takeover bid for NatWest. The Bank of Scotland intended by selling off many Nat West’s subsidiary companies, including Ulster Bank and Coutts, still the Royal Bank tried to overtake bid using a key differentiator from the Bank of Scotland’s, the plan to retain all of NatWest’s subsidiaries. On February 11, 2000 RBS was declared winner in the takeover battle, becoming the second largest banking group in UK after HSBC Holdings. The NatWest brand was retained, although many back office of the bank was merged with the Royal Bank’s leading to over 18000 job losses throughout the UK (Wikipedia encyclopedia, 2007).The Merging of the Royal Bank and NatWest businesses of the two groups were combined integrating their IT systems began. This was scheduled to be completed in 2003 and finished in November 2002, four months a head of target. NatWest retail bank continues to operate as a separate brand on the High Street (RBS Web site 2007).
The Bank was the 2005 recipient of the Wharton Infosys Business Transformation Award, an award given to enterprises and individual who use information technology in a society-transforming way. On the other hand, the researcher 154 was fully integrated of IT systems with regard of producing single view for customers didn’t succeed and as the databases of same business are separate!
Business Strategies
The RBS Group is split into 8 operating areas .Each operating area has several subsidiary businesses (Wikipedia encyclopedia, 2007).
1. Retail Banking
This is the group’s main UK business, offering personal and business banking services. Services are operated under both the Royal Bank of Scotland and NatWest brand names. This area of the bank is currently undergoing changes and will be renamed ‘Consumer Banking in 2007.
2. Wealth Management
This is the group’s private bank division providing services to wealthy individuals.
3 Retail-Direct Channels
This division is responsible for the group’s credit card business in the UK and Europe, Including internet and telephone based banking brands and processing facilities for retailers.
4. Corporate Markets
This division consists of UK corporate banking which provides financing, leasing services and transaction processing to corporate customers. The global banking and 155 markets division provides debt and risk management to corporate and institutional customers in markets around the world.
5. RBS Insurance
RBS Insurance is the second largest general insurance provider in the UK, as well as being a growing presence in Spain, Italy and Germany.
6. Ulster Bank
Ulster Bank provides personal and business services in Northern Ireland and the Republic of Ireland under the Ulster Bank and First Active Brands
7. Citizens
This division includes the Bank’s businesses in the United States, Citizens Financial Group and Charter One Bank. Although the organization is huge, nonetheless senior managers do accept and discuss ideas offered from staff about improving their customer service through a communication strategy that cascades issues up the management levels and accept ideas(they do have weekly sessions to discuss such issues) to be analyzed and Implementation if beneficial and reward to innovative ideas to encourage creativity. The researcher was given access to conduct her study in the marketing department of the retail banking area.
The Royal Bank of Scotland Retail Banking
The Royal Bank of Scotland offers a full range of banking and related financial services to around three and a half million personal and small business customers. The Bank has won many Independent accolades for the level of customer service it provides, including “best buy” awards from which ?(a subscription only magazine and website run by which? Ltd) .
Retail banking Operates:
- A 650 branch-strong network throughout Great Britain
- A 24 Hour telephone banking service
- A fully fledged Internet banking service, the first on the High Street
- Tailored accounts to suit everyone from the financially excluded to the affluent
- A network of 1700 ATM’s many in convenience locations like railway stations, airport and shopping centers
- An award winning business current account and network of dedicated business relationship managers.
The bank offers almost every financial product- from mortgages to stakeholder pensions-online. It was the first bank to develop a basic bank account for the financially excluded, the Key Account, and also offers basic business bank account (RBS website 2007).
5.4.4 Difficulties and Obstacles
The biggest challenge in managing the business and network of the bank is the size of it. The bank does not relate CRM programs as branded software package. The culture of the bank described by the interviews relates size, especially when merger happened between RBS and NatWest; it became a huge organization and staff are trying for grate change. The Bank Number of Different brands and each brand have its own business plan and it’s difficult to apply CRM to these different brands because they have their own different objectives and structured around different products. The teams are responsible for loans and mortgages and likely. Each time they develop their own marketing and business plans which are then fed into what they call customer planning, as illustrated in fig5.2.The Role of customer planning is to take all different plans and turn them into one customer plan to customer friendly and serves all the objectives of different products. It meets different ‘income need. At this point they use software called Market Switch that helps them to analyzing, modeling and simulating for the different plans. The software chip in number of customers interested to certain product and related contacts to a certain customer and so on .The concept of being a “Customer-Centric” Organization has excited since the year 1991 in the bank. The problem persist if they start their plans with the customer and building up relation, which may not end up with good plans that integrate smoothly with the business plans they have.
“The biggest problem we face is that different brands of the group have different databases that are not all connected. What we fear is that integration may cause a huge problem on account of the size of the organization”, said the senior manger. The bank decided not to undertake a CRM implementation project since it was believed just a buzz word and that the failure rates of CRM implementations were high enough to make reject implementation high enough for such a project. They are happy with the tools they have which seem producing the same benefits of any branded software.
Data Cleaning existed as a project three years ago, but there is no ongoing process for data cleansing. Difficulties sometimes ensure because of end -users miss-spelling and not feeding the system with accurate data. Another problem is that, due to the rules of security, the bank cannot change any information in any customers account without his or her permission which may result for long period of time until the customer can be contacted and permission received change to be made and difficult to implement faster for better service. The Problem of customers moving and not changing their address does not occur however, because when a person is moving the first priority to supply a new address for the bank account, very confidential if it relates their financial status.
5.4.5 Data and segmentations Schemes
RBS Warehouse is called UKBMIS (United Kingdom Bank Management Information
Systems) and its coursed from the different channels and operational systems. The Data Warehouse is read -only database information cannot be changed. The bank’s marketing division has its own database, called DMIS (Direct Marketing Information Systems) which is a rich source of customer information which for history customer selections. This database is used in marketing activities and a tool called the optimizer which results to generate campaigns and produce customer plans, excellence one in targeting certain levels of customers to products. Extensive Customer Data enables the bank to target customers for the right reasons most appropriate channels to maximize contribution, no segmentation process in the bank as to levels of customer with varying privileges’ but segments of customers to the service is minimal. Customer portfolios involve mainly private and business customers. These two different types of customers do not vary a great deal in terms of the service but private customers are paid more attention and the bank makes life easy. Business customers are paid more attention and the bank makes life easy. Business customers receive all the services but not in a luxurious way!
To identify some of the benefits of being a private customer, here are some of the Products, services and rates offered to them:
� 24 hour telephone assistance from trained private banking advisers
� A wide range of flexible lending options
� Insurance and protection for the customer and his possessions
� A number of savings and investment opportunities
� A choice of current accounts to meet the customer’s needs: with RBS private banking a customer has a choice of two exclusive current accounts:
– Royalties Private – access to best financial, security, travel and leisure benefits.
– Private Bank Account – a straightforward current account offering credit interest and a private
banking branded cheque book and debit card (RBS website, 2007).
Not having huge differences in services between different types of customers makes all RBS’ customers happy with service and the bank. Segmentation is used in marketing when the bank wishes to target a certain type of customer for a product that they know will not appeal to other types of customer.
5.4.6 Managing Customer Portfolios
The bank has a customer contract strategy from the total customer base; RBS only target personal customers for marketing activities base segments have been removed if any so through marketing channels available to them.
Personal customer may be eligible for mail, telephony or network contact and to meet the eligibility criteria.
Customers are targeted for campaign activity in a number of different ways:
- Contact could be initiated based on an event that has happened to the customer likely loan or moved home this is nothing but the “Event based targeting.”
- Using analysis of past behavior they build that identifies the profile of likely future purchasers and target accordingly. This is called “propensity model based targeting”.
Targeting customers using the number of different attributes, including age type of products currently held and channel preference. This is called” expert rule targeting”. In practice, what happens is that customers are targeted using a mix of the above methods .Different contact channels to contact their customers which are illustrated
Figure5.4. RBS central Marketing Channels (RBS document, 2007)
Optimizer: allows execution of complex range of campaigns to be mapped to the Customer/support planning and simulation
Sales case database: allows for cross channel coordination of customer contacts in real time.
Mail channel includes direct mail which is the biggest volume channel. Direct mail opportunity to follow up using related channels. Triggered mail is highly targeted relevant for the customer as trigger with high impact low cost and volume. Statement mail inserts/messages are good for high information. Telephonic likely for inbound call from customer to a central for any kind of enquiry or response channel for other channels and to satisfy customer needs and this is a good conversation rate from call to sake. A outbound call is a good follow up channel to encourage action and a good pipeline to sale. The conversation should be structured helps staff to lead call to build relationships with customers. Online channels are basically the online banner ads (to support key marketing campaigns) and links to latest offers. Email gives the ability to deliver marketing campaigns faster but this method is not professionally used by the bank. New sales Functionality to be piloted (not yet used) is software that allows targeting of customers who are surfing the website and to engage them in an online chat session with a sales adviser. Current functionality allows the bank to deliver static generic messages that appear on screen when the ATM is not in use. The bank eliminates the probability of annoying customer with many contacts about same product or service.
5.4.7 Evaluation of the System
RBS try to ensure that the marketing and selling material does not mislead customers, only retail marketing teams make sure all materials fully complaint with regulatory and legal requirements. The terms and conditions of all products and that charges are not hidden away. Customers are provided full details when they open account with fee details when it will be charges and written communication before applied and can receive option at any stage. The bank adheres to UK Data Protection legislation. Any customer can see the information details holds about them at any time, in accordance with the Data Protection Act.
In order to test the quality of service and evaluate customer satisfaction to focus groups and learn more about the priorities of the customers try out the new ideas. “Mystery Shopper” research is also used to test the quality of the service for main retail products (RBS website, 2007).
The Royal Bank of Scotland and NatWest are provided with regular results from a postal customer satisfaction survey, which receives over 55,000 responses every month and Surveys are conducted by telephone and in 2005 group conducted more than 56,000 surveys (RBS website, 2007).
The customer complaints has dedicated, trained personnel to handle complaints .Group Customer Relations Unit to handle the issues escalate, complaints and addressed to individual to divisional chief executives.
The bank is responsible for ensuring that their systems, processes and policies comply to Group Complaints Policy. The Group Customer Relations
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Complaints data and subsequent service improvement plans from Businesses every month. This ensures that complaints, and steps taken to improve service, are monitored at most high level.
5.4.8 Internet Presence
The RBS website is rich in information and data about the bank and their bands and they also have annual reports available to the public in downloadable PDF files. The websites useful for customers, businesses and even researchers and the first bank to launch internet banking in UK, it enables the customer Online 24 hours a day, checking balance likely. Keeping the records of their finance, transfer of money, saving time by paying bills.
Future Plans
Expand the further retail branch network and maintain high level customer satisfaction and planning on improving ‘First time resolution rates’ for personal customer contacting the bank query.
Conclusion
Although the bank has a good reputation for its customer service and still some gaps to deal with.RBS maintain knowledge base of customer behavior captures every interaction with the bank responses. Customer data is patchy and spread over multiple databases and hard to recognize the owner of customer data. It is a split between front office and back office operations impacting service opposition and data quality.