To Earn Customer Confidence, Make the Conversation About Their Financial Well-Being


To anyone who regularly reads the news (or watches “The Daily Show”), it will come as no surprise that Americans’ confidence in banks as an institution is low. Stories of banks’ ineptitude may not be coming out as frequently as they were during the days of TARP, bank failures, bank saving mergers, excessive personal spending by executives, and debit card fee debacles, but the banking industry in general has not done enough to restore its reputation as a whole. Spend 10 minutes perusing any of the more than 23 million links that come up when you Google “banks suck” and it quickly becomes apparent just how much residual ill will there is among the general public toward the banking industry.
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If the banking industry was a man, would you give him a job?


In December a spat between the German finance minister, Wolfgang Schaeuble, and Deutsche Bank co-chief executive, Juergen Fitschen, cast doubt upon the seriousness with which some banking executives consider the industry’s position.

Schaeuble stated recently that banks are adept at evading rules. Fitschen objected that, while not unworthy of criticism, it is unfair to suggest that banks have not changed their spots since 2008. I am on Schauble’s side and here is why:
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Rock Ballads We Could Learn from


“So here I go again…walking down the only road I’ve ever known.”  Yes, it’s the lyrics from a Whitesnake song!  But I kept singing it whilst reading about recent moves in the UK lending market. And then there’s the definition of insanity: “doing the same thing over and over again and expecting different results.”  Are we in danger of doing it all again?
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Business Bankers: Your Clients Don’t Trust You


Ask most Business Banking executives how they would describe their ideal Relationship Managers (RMs) and you will hear things like “advisers to their clients,” “standout sales performers,” “relationship builders,” and “experts on their clients’ needs.” All these phrases evoke the idea of a partnership built on trust and mutual respect. If this were consistently true, one would speculate that when looking for advice on the day-to-day financial management of their companies, CEOs and financial executives would be turning to their RMs in droves, and they would trust the counsel they are given.
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Bankers: Are We Accountable?


Twenty years ago there were 14,000 FDIC-insured financial institutions. Today that number is cut in half. The reasons are many. And yes, some are beyond our control such as population mobility, technology, and the need for some scale to invest enough to remain relevant. But, as my one-time Division Officer, Lieutenant Proper, once told me: “Be careful pointing your finger, because the other three are pointing at you.”

I recently made a presentation to staffers and advisers to the Pacific Coast Banking School (PCBS) regarding what I would change in the curriculum. My theme was that if we keep teaching bankers the same things, and expect different results (i.e. not cutting our industry by half), then we are insane. I don’t think I’ll be invited back.

Transparency, transparency, transparency


Lots of talk this week about transparency in banking, and how banks are too opaque and secretive in their approach to customers and charges.

Certainly that’s been the case in the past, and certainly it’s still the case in some areas of banking today.

For example, we’ve just had our major UK banks pooling money into a pot for paying back charges plus interest on a product that no-one needed: credit card protection policies.

The policy is an insurance against fraud, but was provided as cover under the banking regulatory structures anyway.  In other words, the policy gave no greater benefit than an easy to call number.
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Want to be a good bank? Don’t copy other banks


“It was telling that not a single interviewee was willing to defend the status quo” is just one of the surprising conclusions in The Economist’s “Good Bank Report”, based on a discussion among representatives of the retail banking industry. You don’t have to look very far to find a discussion of the failures of banking when it comes to inspiring trust, working efficiently to respond to customers, and innovating – but it’s more surprising when those creating the criticism aren’t the customers, but the organisations that provide the service.

The participant’s in the Economist’s research offered different solutions to the problems their customers perceive – but one clear theme comes through. Banks “need to act in the best interests of their customer and be seen to do so. Old sins are not forgotten, but they can be forgiven,” the report concludes.

This is nowhere more apparent than in the fundamental brand asset of a bank: trustworthiness. On one hand trustworthiness, innovation and effectiveness reinforce each other – banks should follow rules, and innovate in the interests of its customers.
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