Return to Sender: A Growing Liability

With the innovation in technology and services being offered by banks today it would be logical to think that the volume of physical mail being sent out will shrink substantially seeing a corresponding reduction in the amount of return mail.  However over the past year my Bank has been facing an issue of having to deal with huge amounts of returned bank statements.

There were various reasons as to why the statements were being returned; in this case it mostly attributed to a change in banking regulation-obliging banks to print statements to all deposit accounts where previously were only printed for specific accounts. With the unanticipated amounts of mail pouring in, it deemed essential to start to analyze all the different reasons to why the pieces returned and what is it costing us. What is the total operational cost of postage, printing, handling, research and re-mailing?  What about the value we lost with returned communications? The delayed or missed payments, unawareness of bank charges and the overall customer service expenses?

The bank has already approved a project to centralize, automate and monitor return mail operations. By having all statements to be printed with bar codes and returned back to a central operation that will be able to simply scan the bar codes and capture how many times the statement has returned, and to ultimately stop printing upon the third time.  We will also be able to capture all the problematic accounts and attempt to contact the customer in different methods in order to update their information and encourage them to use e-statements.

I have highlighted one small operation that possibly was not be seen to have a dramatic impact on the banks performance but it is a growing problem and may have a huge impact in the future with our customer base growing everyday. As Head of Customer Resolution I am able to see a lot of the operational and process issues we are facing with at the bank through customer complaints, and by taking this class it has stressed the importance of how reducing operations cost is the best method to optimize in an organization. I am also looking forward to learn the importance of managing quality, and conducting process redesigns and how they ultimately lead to improved efficiency, profitability and operational excellence.

This after all is my view, so do you think our Bank is on the right track with their cost management initiatives?


6 thoughts on “Return to Sender: A Growing Liability

  1. This post is relevant because in our bank we are facing the same problem of returned mails. I think your bank is in the right track with their cost management initiatives by adding the new barcode system. The new system is going to limit the number of returned mails which will reduces the total cost of postage, printing, handling and re-mailing.

  2. thanks mariam, in a way it comforts me that you have the same problem. i think it is important for the banking industry to collaborate and create best practices.

  3. I can also relate to your post Nada as I do receive hard copies Bank statements from your bank, but I personally prefer to check my statements online. Your post made me think that maybe I should ask the bank to stop sending me hard copies and save some trees!
    People can check their statement anytime and anywhere using the bank on-line service, I also find it more private and secure, as papers might fall in the wrong hands. It is difficult to shift customers toward using technology. We have recently change our receipts redemption system from paper coupons to electronics registration that can be done at the mall customer service desks, it took people a while to fully accept the change, but it was the only way for them to enter the our raffles and win. So maybe your bank should be pushy toward online services.

    1. thanks ahmed, we are trying to increase our E-Banking penetration and we have just launched e-statments. i like your idea about being pushy- we already print epins for customers at the time they collect their debit cards and we have a ebanking station in all our financial malls. but maybe we should apply your shopping mall strategies and have some more raffles!

  4. The issue highlighted by you,it is very relevant in the changing pattern of communication today. With the rapid changes in technology and computerization of almost all the basic services, physical mail is definitely losing its significance day by day. The suggestion given to eliminate sending statements to returned mail consumers is a very useful one. Though it is a small element of the bank’s operating cost but it will definitely be a positive step in reducing cost and increasing efficiency. Ultimately the focus should be on more important elements of operational cost, but to start with even a small step will lead to bigger successes.

    1. i am a complete believer that its the small things that make a diffrence. we are the second largest retail bank in bahrain and our customer base continues to grow steadily!
      so it may be small now but will deffinitly be big in the long run.

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