MANAGE CUSTOMER COMMUNICATION IN BANKING NOTES FOR CDACC STUDENTS/TVET

 MANAGE CUSTOMER COMMUNICATION

Define communication

Communication is the process of conveying information, ideas, and feelings between a sender and a receiver through a medium. In the Kenyan banking sector, this applies to all interactions with customers, including: 

Ø  Providing information on products, services, and policies.

Ø  Building trust and strengthening relationships.

Ø   Addressing inquiries and complaints to enhance customer service.

Ø  Notifying customers of transactional updates, service changes, and potential fraud. 

Channels of communication

Kenyan banks use a blend of traditional and modern channels to engage with customers, catering to a diverse clientele. 

Traditional channels

1. Bank branches: Physical locations where customers can have face-to-face interactions with bank staff for personalized assistance, especially for complex services like loan applications.
2. Phone calls and call centers: These provide direct, person-to-person service for inquiries and support, with many banks in Kenya offering 24/7 assistance.
3. Physical mail: Used for sending statements, letters, and other official correspondence to customers who may not be fully digital. 

Digital and automated channels

1. Mobile banking apps: These are critical for day-to-day banking activities, offering 24/7 access to services like balance checks, transfers, and bill payments.
2. Internet banking (web portals): Allow customers to perform transactions and manage accounts online from their computers.
3. SMS alerts: Provide real-time notifications for transactions, fraud alerts, and marketing messages.
4. USSD code services: Simple, text-based menus accessed via phone that cater to customers with basic mobile phones, ensuring financial inclusion.
5. Chatbots and live chat: Automated and human-assisted chat services on websites and apps that provide quick responses to customer queries.
6. Social media platforms: Banks like SBM Bank Kenya use social media for two-way communication, brand awareness, and customer engagement.
7. WhatsApp banking: An emerging channel in Kenya that leverages the popular messaging app for a variety of services, including balance inquiries and statements. 

Communication process

1.   Sender: The bank initiates the communication, which could be an automated system, a bank teller, or a manager.

2.  Encoding: The message is formulated into a suitable format, whether verbal, written, or visual (e.g., an SMS alert, a letter, or an in-app notification).

3.  Channel selection: The bank chooses the most appropriate channel based on the message's nature and the customer's preference.

4. Receiver: The customer receives and interprets the message.

5.  Decoding: The customer processes the message to understand its meaning.

6. Feedback: The customer may respond, and the bank should have systems in place to receive and act on this feedback.

7. Noise: Unintended barriers can disrupt the process, such as language barriers, technical issues, or inconsistent messaging. 

Importance of effective communication

1. Builds and maintains trust: Clear and transparent communication is the foundation of trust between a bank and its clients, a particularly vital asset in the financial sector.
2. Enhances customer satisfaction: Good communication addresses customer needs, clarifies complex information, and fosters positive relationships, which is crucial for retention and loyalty in a competitive market.
3. Ensures compliance and reduces risk: Adhering to communication policies and ensuring accuracy helps banks comply with regulations and prevents misrepresentation. It also aids in fraud prevention by promptly alerting customers to suspicious activity.
4. Improves operational efficiency: Centralized and automated communication systems prevent bottlenecks and provide consistent messaging across all channels, from branches to digital platforms.
5. Drives business growth: Positive customer experiences, often driven by effective communication, lead to higher customer retention, loyalty, and brand reputation. 

Storage of communication records

Kenyan banks have a legal and operational requirement to securely store communication records. This practice is essential for: 

Ø Regulatory compliance: For regulatory bodies like the Central Bank of Kenya to oversee banking activities and ensure adherence to policies.

Ø Dispute resolution: Provides an accurate record of interactions that can be used to resolve customer disputes or internal conflicts.

Ø Fraud investigation: Communications related to suspicious transactions are crucial for investigating and preventing financial crimes.

Ø Business continuity: Preserving records ensures access to important customer data in case of system failures.

 

 

  

The storage methods include both physical (hard copies) and digital forms, such as: 

Ø Email archiving systems.

Ø Digital records of instant messaging and chat platforms.

Ø Recording phone calls with customer service. 

Confidentiality of communication and records

Confidentiality is a fundamental obligation for banks, and strict protocols govern all customer communications and data. 

·         Legal duty: Kenyan banking laws require financial institutions to safeguard customer information and prevent unauthorized disclosure.

·         Data protection: Confidentiality is key to protecting customer privacy and preventing fraud and identity theft. This includes protecting personal and financial information across all communication channels.

·         Controlled access: Access to customer communication records is restricted to authorized personnel. Proper protocols ensure that employees only access information relevant to their roles.

Exceptional circumstances: 

Disclosure of confidential information is only permissible in specific, legally defined situations, such as:

1. With the customer's prior written permission.
2. When legally compelled by a court order.

To comply with regulatory obligations, such as reporting suspicious transactions to financial intelligence units