Banks often sound alike when they talk about customer service, but they don't all perform alike.
The most productive institutions open 800 accounts annually per full-time sales employee, or about four accounts per business day. That's about twice as good as the average bank, and seven times better than the worst banks by this measure, which only open roughly one account every two days.
The spread between best and worst is nearly as stark for wait times at the teller window, and even more pronounced when it comes to the number of inbound calls from customers that are converted into sales. The findings — from a new
Banks have a median 4% sales conversion rate on inbound calls, but the range of rates is wide. The institution most successful at turning inbound calls into revenue has a sales conversion rate of 16%, while the worst has a conversion rate of 2%.
"A 2% conversion rate is about twice as good as ripping a page out of the telephone book and sticking a pin in it, and that's not good at all," said Andy Maguire, global leader of the retail banking practice at BCG.
Some commonly studied industry metrics adhere to the law of diminishing returns. It may not, for example, be crucial that a bank match the best-in-class, 2.2-minute average wait time at the teller window, so long as customers can get in and out of a branch within the five minutes customers generally find to be acceptable.
Other categories suggest a more appreciable impact based on relative performance. When it comes to approving personal loans, for example, 20% of banks can process applications and make funds available in the same day, and 30% can do so in less than an hour, while the rest take more than three days to make a decision and offer a loan. Likewise, 15% of banks can take less than an hour to conditionally approve mortgage applications deemed creditworthy, while 40% will provide a same-day response, 15% take one to three days to respond, and 30% take more than three days.
BCG did not disclose which banks it studied. But no single bank had a lock on the top rankings; one bank was the top performer in two categories, and no other bank ranked first in more than one category. The results indicate the wide-open nature of the playing field coming out of the crisis, with banks pitted against one another as they go after a diminishing pool of fee revenue.
"You're going to have to rip [business] out of the hands of your competition if you want to win, and if you don't do that, then by definition you're a loser," Maguire said.
