OREANDA-NEWS. On June 27, 2008 PricewaterhouseCoopers and Senteo presented a joint study of the Russian retail banking industry, “Customer Experience Index – 2008: Who is Winning the Retail Banking Race in Russia”, reported the press-centre of PricewaterhouseCoopers.

The survey offers unique insight into Russia’s competitive retail banking landscape to help banks measure and benchmark performance, improve the overall customer experience, and understand how to use customer experience as a business approach to create a more loyal and satisfied customer base.

Market growth and the Russian consumer’s increased spending power have created clear opportunities for further developing retail banking offerings. These opportunities have been apparent not only to Russian banks, but also to foreign banks, which have increased their presence in Russia recently.

As part of the study, Senteo and PricewaterhouseCoopers analysed 51 retail banks in Moscow and St Petersburg, measuring their performance in five areas contributing to the customer experience:

Brand — Do people identify with the bank’s brand?

Communications — Are the bank’s marketing activities effective?

Environment — Do customers feel comfortable in the bank’s branches?

Offering — Do the bank’s products and services meet customer needs?

Culture — Are the bank’s employees focused on the customer?

This year’s survey encountered trends that illustrate how the retail banking market in Russia is evolving.

The average index score for the Russian retail banking customer experience for the first half of 2008 is 3.25. Scores were based on a five-point scale, with ‘5’ being the highest. Notably, the leading categories in 2007 were Communications and Brand, while in the present study, Culture (3.46) and Brand (3.22) emerged as the top categories.

This will be an important pair of elements to watch in future studies because they may reflect shifts in the approach banks use as they position themselves closer to their customer base. Surprisingly, Communications scored lowest (3.15) this year. Offering scored second lowest (3.17). It is evident that bankers need to be more customer-centric when designing their product and service portfolios. Although Environment moved up from fourth to third place in 2008, it also showed a decline (3.18) when compared with its score in 2007 (3.25).

Foreign banks generally scored above average, since they have experience with international best practices. Foreign banks’ areas for improvement were Brand and Offering, whereas Russian banks need to improve Communications and Environment.

Comparing the average score with best practices among leading international retail banks, it is clear that the customer experience in Russian banks still needs to improve in order for Russian banks be competitive internationally.

“As in our previous Customer Experience Index study, which was released in December 2007, we found that the business application of ‘customer experience’ generates greater economic value for banks,” said Michael Ruckman, founder and president of Senteo. “In addition, banks have clearly started to pay more attention to the customer-oriented culture of their employees — a positive development from last year’s study,” concluded Mr Ruckman.

Chris Barrett, CEE Financial Services Advisory Leader, comments,
“As was outlined in PricewaterhouseCoopers’ ‘Banking 2050’ survey, emerging economies play the lead part in the development of the global banking sector. As evidence of that, the economic boom in Russia has led to fierce competition among retail banks in Russia. Ultimately, the quality of service will be one of two key differentiators, along with cost efficiency, which will determine the winners in this highly competitive environment.”

Notes to editor
Methodology
Senteo and PricewaterhouseCoopers analysed 51 retail banks in Moscow and St Petersburg. The study is based on Senteo’s proprietary methodology and a comprehensive scoring model. To ensure the reliability of the survey’s results, the methodology was audited by PricewaterhouseCoopers. In total, about 400 individual branches were surveyed by our mystery shopping team in Moscow and St Petersburg. An overall list of the banks to be surveyed was made, formed, and prioritised based on the volume of retail deposits and loans as of 1 January 2008 (RBC rating).

Key survey figures:
1. Average scores (Q1 & Q2, 2008):
Culture 3.46
Brand 3.22
Environment 3.18
Offering 3.17
Communications 3.15
Total Average 3.25

2. Customer Experience Index 2008 top ten:
Alfa-Bank 4.30
MDM Bank 4.22
Absolut Bank 4.04
Raiffeisenbank 4.03
Citybank 4.03
MBRD 3.89
BSGV 3.86
Sobinbank 3.82
UniCredit Bank 3.82
Russian Standard Bank 3.76