Balancing your bank account?

I hate it when this happens. When I feel the need to be nice about a bank. It’s not something that I find comes naturally but every so often a bank does something that actually impresses me. First it was FNB and their “Islamic” fixed-repayment loans, then Stanbic and their no-minimum-income accounts and loans and recently Barclays have been suggesting the extremely rapid issue of debit cards.

This week Standard Chartered Bank announced two rather remarkable new ideas. Both involve at least one customer getting some money although the amounts in question vary enormously.

The first is particularly impressive when you look at the amount of money involved. They’ve launched a competition. All you need to do to enter the competition is take out a loan before the end of December and you stand to win a prize of P1 million. Yes, a whole million.

There are a couple of conditions of course. You must borrow P30,000 or more over a period of at least 3 years and it must be one of Standard Chartered’s No Mathata or Scheme Personal Loans. The only other catch, and to be frank it’s not much of a catch, is that if you win you must donate 10% of the million to charity of your choice.

Yes, I suppose it’s only going to benefit one customer and his or her family but it’s still the biggest competition prize I’ve ever seen in Botswana. Also the obligatory chunk of cash going to a charity is a nice touch.

So where’s that application form?

The other new idea is actually the one that I think is most impressive. Something that’s actually much braver than the P1 million competition even though it involves a lot less money. Something that might actually benefit all of us. It’s something I’ve not heard of before in Botswana. Automatic compensation.

Standard Chartered now pledge that any customer who calls their 24 hour call centre and who does NOT then get their problem resolved within 24 hours will get P100 paid into their account.

In their statement announcing this, the bank say that they are “putting back the control of the client/service provider relationship where it should lie, namely with our customer”.

I think that might be putting it a little strongly but the idea is a sound one. If they get something wrong and don’t fix it quickly they’ll say sorry in a much better way than just saying it out loud. They’ll give you money. Straight into your bank account.

There are several aspects of this that I think are worth considering. Firstly they are introducing something like a Service Level Agreement. This sort of thing is common in other industries, particularly information technology. There you get guaranteed levels of service and very often penalties when the supplier fails to meet them. It’s a way to recognise that customers have rights and that they deserve a service in return for the fees they pay.

Then there’s the encouragement this sort of thing offers to staff within the bank. Standard Chartered aren’t going to go around giving disappointed customers P100 without keeping detailed records of when this happens. One of the details they’ll obviously record is whose fault the problem was. Bank staff are really not going to want their name cropping up over and over again against these payments. There’s going to be a healthy fear of this mechanism within the bank. At the end of the year you can imagine the MD demanding to know which bank employee incurred the most P100 penalties in the last 12 months. Quite an incentive.

Lastly I like this approach because it does seem to balance things a bit. Bless them, banks are usually very quick to punish us customers when we transgress. They are eager to write us nasty letters when we fail to repay our loans, go overdrawn or commit some other misdemeanour.

But this new idea changes that slightly. Now instead of just writing to us to tell us off they’ll be writing to say sorry and offer us a little cash. This may seem like a small thing but it does re-balance the relationship a little bit.

Most importantly this adds to the competition between banks. In the last few months we saw most of the banks competing for the lower income end of the market. They were all trying their best to out-do each other in offering services to this under-serviced section of the market.

Now perhaps we’ll see banks competing to sell us their products on the basis of the quality of the services they deliver, not just the mechanics like interest rates and bank charges.

So congratulations to Standard Chartered for taking the leap and let’s hope we see more of this from the others sooner rather than later!

This week’s stars!

• Wapula at the Shell Filling Station in Kanye for “excellent” service and for being so cheerful and friendly.