ME Bank has come under fire for moving to decommission its automated telephone banking service.
In a letter sent to debit and credit card account holders last week the bank revealed it was removing all references to “phone banking” in its terms and conditions to reflect the planned closure of the online channel on 24 May.
ME, which is continuing to replace its core banking systems with a Temenos T24 platform, is the first Australian bank to bin phone banking.
The decision has surprised channel management and banking experts who say the reduction in choice could result in customer losses at ME.
“From a banking perspective it looks like a bold move by ME,” said Steve Nuttall, a director of customer experience at Sydney-based consulting firm, Fifth Quadrant.
“Most banks with highly rated customer service levels are typically trying to offer more channels.
“Taking choice away from customers carries with it the risk of customer churn.
“Having said that, it makes more sense to support channels that are growing and we are seeing more banks migrating customers to mobile apps.”
While most of the bank’s customers were not informed of the decision until last week, a ME spokesperson said the bank had been engaging with “a small number” of phone banking users since September last year.
“To manage this change ME has been communicating with the small number of remaining phone banking users since September 2020, notifying them of the change and offering to assist in moving them to ME’s simple, safe and convenient online banking services,” the spokesperson said.
“In all our communications with customers, ME has highlighted the security, privacy, ease of use, and added functionality of online banking.
“In future, the small group of remaining phone banking users will be able to complete their day-to-day banking using online banking, by calling our Melbourne-based call centre, and by visiting an Australia Post outlet.”
Consumer advocates panned the move, saying it would make banking with ME more challenging for older and disabled Australians.
“Not everyone has access to the internet, so they’ll suddenly find they can’t access an essential service,” said Fiona Guthrie, chief executive of Financial Counselling Australia.
“This could particularly affect elderly customers or those who find it difficult to use computers and mobile apps – this seems to be more about cost-cutting than customer needs.
“This really is a concerning move and it will make it harder for many of the bank’s vulnerable customers to do their banking.”
Bank systems risk expert Dr Patrick McConnell said he was mystified by the bank’s decision given that including an automated phone banking capability in a technology overhaul was a relatively easy task.
“Core system replacements are very risky, however telephone banking is usually one of the more simple challenges when a bank transforms its technology,” he said.
“It makes no tactical sense to ditch the phone banking service because it is going to cost the bank more if customers develop new habits of ringing the call centre to check balances and make transfers.
“There’s obviously something else happening here that doesn’t smell right.”
While there is a growing trend among Australians to do their banking via the internet or through a mobile platform, market research shows that one-fifth of bank users continue to use phone banking.
Customer surveys conducted by Roy Morgan Research in the four years to March 2020 show that the percentage of customers using phone banking remains above 20 per cent.
Data collated by BPay shows around 2 per cent of all transactions made through its bill payment service were executed through phone banking last year.