Saturday, August 30, 2008

banker lend to thy self

Cheryl has a post about banking customer service that ends with the comment:
And they wonder why consumers hate banks. No amount of ads about happy banking, or your bank caring about you, or determined to be different, or whatever they advertise to try to convince you they care about you, will ever change the banking culture.
I am currently having some issues with my bank. And three thoughts strike me:
  1. The greatest asset that many large, underachieving businesses (and that includes you, Australian banks) have is customer apathy. Seth Godin puts it well.
  2. The banks are in for a(nother) shock. A few months ago, when I was still working for a certain financial regulator, a former exec from one of the retail banks came in to teach us about the banking sector. It was an interesting day but one thing stuck in my mind. In the 90s, the Australian banks were caught out when their prime business (loans and especially home loans) got hit by new entrants such as Aussie Home Loans - with lower rates and better service. Now the growth market that banks are targeting is "wealth management" - i.e. advising people on where to spend their dosh. Based on this former executive, the banks seem to think that this market is theirs for the taking. I think it's more likely to be a repeat of the loans situation - i.e. new entrants creaming the incumbents with better offers and stronger service.
  3. Banks don't seem to understand that customer service means actually serving your customer, not your customer serving you. Not putting lots of bureaucracy in their way. Not hitting them with fees for everything (and most recently I have been charged a fee due to one of their cockups). If and when I become wealthy, why should I trust my future to someone who has no concern for me beyond the next fee hit opportunity and cannot be trusted with the most basic activities?

6 comments:

Anonymous said...

I particularly hate the current threat of "the end of free banking" bandied about by British banks on the back of all the fee-reclaim action going on.

What, exactly, is free about 0.1% credit interest in a world of over 4% inflation?

flipsockgrrl said...

Re #3, why put up with it? Change banks -- I did, late last year, and it was worth the effort of disentangling myself from the Big Four bank I'd been with for decades. My new bank provides all the services I need, charges only the bare minimum of fees, pays decent interest on savings, and the people who work there really *do* care about their customers :-)

Gavin Heaton said...

I only have two words for you.
Credit Union.
Now, stop being apathetic and close that account today ;)

Anonymous said...

It's true that banks aren't interested in mass customer service. They consider that the effort is too expensive. Bank customers don't really bother to change banks over poor service (certainly in not sufficient volumes) for banks to care.

Banks do segment their customers and go out of their way to help high-net worth individuals - something that will become commodified if they try to grow the wealth management business in the same way as loans business.

Banks could improve customer service pretty easily - at the counter (the main human interface between the bank and the customer) but they don't want to because then herds of people will come to the bank branch instead of using ATMS and online services. Servicing customers at bank branches is more costly for the banks.

The bottom line is that banks don't care about losing low saving deposits to other banks, except if sufficient volume of customers leave which impacts bank fee receipts.

However, consumer power does have clout when it comes to shifting mortgage loan accounts. PLEASE, write to the Australian Treasurer, Wayne Swan, Parliament House, Canberra, and urge him to make switching home mortage loans between financial lenders easier and cheaper. End mortgage transfer fees and mortgage break costs. A government shake up on mortgage loan transfers will bring the service culture back to the banks!

Anonymous said...

Hmm… I'll have to keep this post in mind because I want to run my own business soon. I have a good amount of money saved, but I know I'll have to take out a loan at some point. I can use all the advice I can get. Lately I've been thinking about buying a business instead of starting one from scratch. Any suggestions? Advice? Thanks.

Anonymous said...

@Jon - try BizAg.com which lists over 100,000 businesses for sale.