So yesterday brought us the news that the LTSB / Co-operative bank deal had fallen apart. From the shocked faces of the PR’s, it appeared not all press offices were fully prepared for the announcement, but to the customers already informed that their branch and their accounts would be transferred, it was another ail in the coffin of trust in the banking sector.
Whilst CEO’s can argue over the efficacy of the deal or use the excuse that “FS in the UK is not an easy place to be“, the bottom line is that a joining of two organisations such as these is just too complex. Whether it’s the core banking system, the back-book due diligence, the resource and infrastructure costs or just that Regulators are likely to make the FS Industry fiscal ‘pips squeak’ over the next few years – the bottom line is, you’d better be bloody good and bloody well financed if you want a UK banking presence.
However good your CV is, and however big your balance sheets are, the FS sector is increasingly challenging for the banks, but I would suggest, is even more challenging for it’s highly apathetic customers!
Now, let me explain apathy. I’m a bank customer and have been since I earned my ‘Midland Bank’ school bag in about 1980. (It was called a Griffin Saver account). In my second job, I needed a bank account, so saw the ‘bright lights’ of the Halifax and opened one there, with a free overdraft and (I think) an offer of free cinema tickets. At eighteen, I opened credit cards with Lloyds (the biggest mistake of my life) and later on, transferred my banking to Nationwide Building Society. (A jolly good, stoic British mutual) Even on that canter through my financial history of 25 years, I’ve added many accounts and ‘services’, but actually have only once changed my current account. I believe even that puts me in a bracket of just 20% of the population – a majority retain their ‘first-job-bank’ for life.
So that’s bank apathy. It’s seen in Energy companies and other utilities too, and whilst I wouldn’t consider apathy as a bad thing for either party in the banking relationship, it does create a flatline customer response – for a majority of the time.
“Can’t live life without one” is pretty standard feedback about a current account bank. Hardly the most overwhelming statement of delight!
Wouldn’t it be great if all bank customers would be effusive with delight when they mention their banking relationship? I think the closest we get to that in the UK is with FirstDirect, who I believe are a brilliant ‘front end’ to HSBC. (They’re also not that profitable)
So is that the crux of the matter? Great service = lower profits = customer service – not a chance! Is there not ‘another way’ (sic)?
Well, we saw the Natwest attempt to create ‘another way’ through ‘helpful banking’. We also saw three days of media venom following their technology outage last year. I’ve never seen such pub-bar hatred since the gazumping days of the 90’s property boom!
In short, we’ve got apathetic customers (until something goes wrong), we’ve got a commoditised product in a sector that’s universally disliked. Surely this should be some ad-agencies dream?
In my opinion, it’s not. We don’t need someone telling us that ‘BANKS are GREAT’ what we need is for banks to be great (again) and for trust to grow from inside. We need to organically trust our banks through good old ‘word of mouth’ – whatever today’s word of mouth actually looks like!
We should never believe that banks don’t need a ‘casino’ side, or that they won’t trade’ in invisible tokens or instruments, that’s just part of modern-day algorithmic banking, BUT from a retail and SME perspective the population needs to trust and positively engage with their bank. (…and indeed their FS providers of insurance, loans, mortgages etc)
When you think of it, the UK average salary is £27k PA. If you work for 45 years at this level, that’s over £1.2m of money transmission that you’ll put through your banks ledger. Add in the commissions, charges and related sales and, when you stop and think about it, you’re a valuable commodity.
Now stop and think. Would you trust your bank if you had £1.2m in your grubby mit today?
What would you ask them to do differently?
What would it take for you to trust them with your wonga?
Again, my opinion possibly doesn’t matter to many, but a bank that’s authentic, has personality, tells the truth, has empowered employees and that recommends the right products to suit a persons’ needs is a good starting point.
A bank that does what it can for the customer, but tells them when it’s not possible AND WHY would be another move forward. (….and that doesn’t mean quoting pages of policy!)
A bank which truly ‘listens’ or truly believes in ‘another way’ or understands life’s ‘journey’ would be an epic ‘win’.
All these things require people, from the top of the hierarchy to the cashier to understand the ethos behind the bank. For the back offices to be as transparent as the front and middle office and for the people to be led by leaders who understand how people think, not just how numbers work.
The first bank to capitalise on their greatest asset and to over invest in the understanding of their customer will be the first bank that wins the trust war and ironically the first to celebrate positive apathy, because those customers simply won’t want to go anywhere else!
Will the new ‘owners’ of TSB be that bank? If things don’t go well in selling these branches, maybe every British Citizen will ‘own’ it and we could run it as a co-operative? Wouldn’t that be ironic?
I’d love to hear your views, particularly when it comes to co-operation or unionship in banking across the globe. What would it take for you to trust your bank?