Issues faced and Handling of the Issues in CBA
CBA has encountered several problems regarding its customer service strategy. Despite CBA laying an essential focus on high levels of customer service, it has often failed to live up to expectations. One of the issues that faced the bank recently is the failure to provide sound advice to its customers in the investment banking market segment. The bank provided misleading advice to about 1,100 clients hence leading to a massive public outcry when client lost their funds (The Guardian 2014). The clients’ funds were invested in risky ventures, which promised high returns. The scandal had a huge negative impact on the bank’s reputation and was captured in several media outlets after the bank failed to take action to resolve the issue. The bank was therefore viewed as socially irresponsible since it took advantage of innocent customers. The image projected was that of an organization keen to improve their bottom line at all costs without due regard of the society’s welfare.
The bank tried to resolve the issue by setting up a committee to look into every aspect to ensure compensation of the victims. This was meant to ensure that grievances of affected customers are resolved to avoid further reputational damage. The compensation process was however riddled with challenges since the bar for compensation was set high hence locking out the majority of the affected victims (Abc News 2015). The outcry against the bank increased thus making it become a subject of inquests by parliament and industry regulators.
CBA’s technology strategy was also riddled with issues in the recent past. The challenge arose after the bank was involved in money laundering scandal. The money laundering scandal touched on its intelligent machines that are technologically advanced to accept deposits. The deposits were believed to be proceeds of money laundering. The bank was aware of this, yet they did not disclose to regulators as required by the law (The Guardian 2017). This was later discovered by external sources, hence putting the bank in an awkward position. Because of the scandal, the bank lost trust among its major stakeholders hence leading to further reputational damage. The bank suffered consequences in the form of huge penalties imposed by regulators because of failure of non-disclosure. The bank thus incurred losses since it had to set apart some of its revenues to cater for the penalties.
The bank tried to address the issue of money laundering scandal by accepting responsibility. The bank offered apology to its stakeholders for failure to observe due diligence. However, in its apology CBA tried to downplay the scale of its failure to comply with the law. CBA incurred fines form the regulating authorities with the potential of driving away significant stakeholders such as investors and customers. According to Reuters (2017), the scandal led to a drop in CBA’s performance after its shares dropped in the stock exchange market.