Our support eliminated multi-million pound losses within a high street bank’s mortgage division and saved a further £10million by improving customer service.
The bank was losing more than £60million from early repayment charge (ERC) errors within its Mortgage Product Transfer division. Internal projects and more than a million pounds spent on external consultancy firms had not resolved the situation.
Our team quickly identified three root causes behind the losses:
Unclear understanding of customer needs
The bank had an unclear understanding of its customers. This resulted in systems and processes being designed from an internal perspective and not designed around customer needs. We identified that 81% of customers wanted the ERC added to their mortgage – allowing flexibility to change mortgage products without facing costs in one hit upfront. However, the bank’s targets didn’t reflect this requirement.
Due to the internal perspective of the bank, the work was sub-optimised and the Mortgage Product Transfer division was divided into several functions – staff who took calls, staff who sent out product transfer quotes and staff who processed them.
Communication, cohesion and trust between them was poor and lead to customers being transferred between each function and talking to multiple staff members before their problem was resolved. The lack of trust between staff resulted in time being wasted trying to log and track work combined with information being lost or insufficiently passed between teams.
In an attempt to increase productivity Service Level Agreements (SLAs) were agreed between departments at the bank and timeframes were forced upon customers irrespective of individual customer needs. This resulted in staff being too focused on hitting targets believing that this guaranteed good service but the reality was that it was actually at the expense of providing the service the customer needed. Targets looked good on paper but the customer service performance was, in reality, quite poor.
Our consultants established an internal change team to pool the collective knowledge of the managers, call handlers, staff providing quotes and staff processing them, to create a cohesive operation.
Using Himsworth methodology, a thorough review was carried out through our 3D Model. This allowed the team to understand why the current system wasn’t working and put them in a position to design a new system to improve performance.
By looking at the entire system, and from a customer perspective, the outcome was a resounding success:
- Quotes issued to customers fell to an eight-day average from a previous average of 61
- Customers advised of the correct ERC figure increased from 8 per cent to 100 per cent
- Correct ERC payments increased from 41 per cent to 100 per cent
- Customers left with an incorrect mortgage debts fell from 72 per cent to 0
- Saved £10m by increasing staff productivity and reducing waste
- Morale improved as staff had more control and understood importance of delivering excellent customer-centred service
Using Himsworth Consultancy not only saved millions of pounds for the bank it resulted in a boost to staff morale. Staff feedback said it established a new ethos that put customer service ahead of simply hitting targets. They benefitted from having more control over the work they carried out leading to greater job satisfaction and improved motivation. Due to the increased capacity for staff to carry out more valued and coordinated work the bank saved a further £10million due to waste being removed from its processes.