Banking For Dummies

Posted on March 20, 2011

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In the wake of banks rushing to be the new money centers of the world, we, the customers have lost a lot. Namely innovation. Almost equally, we’ve gained an unexciting & unimaginative customer service experience over the last 20 years.

In the last month I’ve had two banking experiences bad enough to make me wonder how much longer the retail banking industry as we know it will remain relevant.

The first incident starts innocently enough. Picture an early Saturday morning. We are the first people in the local Too Big To Fail bank. I’m opening a corporate account at a tiny desk & in a chair that looks comfortable, but isn’t.

She’s a premier banker. The other adjectively awesome bankers are at their desks & windows performing their siloed functions.

She’s nice enough. Asking the usual: Birthday, SSN, address, etc. Writing it down on some internal form. Then typing it into the computer. I correct her typos. I have copies of the requested corporate documents with me. Walking across the room to the printer, she returns with my application. I’m presented with the areas needing signature. She photocopies the paperwork & gives me a copy.

To setup my PIN & bill pay she passes her keyboard awkwardly over the desk, turning a monitor never meant to be turned, on a desk full of Tchotchkes. Along the way she types in my mother’s maiden name & favorite food.

The entire process takes just under an hour. It is almost as painful again to write about it.

My new account folder is stuffed with my application, glossy trifold brochures & reams of disclosures. I won’t ever open it again. Someday I’ll need to shred it. She closes with a thank you & “please consider TBTF for your other banking, investing, or lending needs.”

There were 7 people waiting behind me.

The second incident involves a safe deposit box. Old school baby. Where I keep our millions in Bearer Bonds important documents stashed.

I never visit the box. Ever. I’ve been there one other time since 2002. But last week we began enrolling our first born in kindergarten. So, my wife hops (quite cutely) down to the local branch of the $80 billion regional bank. Key in hand, ready to liberate our first born’s birth certificate. Small problem. They have no record of us. Not a safe deposit box. Not as a customer. Not by Social Security number or mailing address. Nothing.

“Are you sure you have the right bank? …Ok, give us a day to research.”

After receiving no call, we call. Still a mystery. They ask us for documentation. We dig out an old statement from our other safe deposit box, the garage. Three days later they find us.

When I arrive to open the box, the manager says the banker who knows about our situation is gone on lunch break. But “you can wait here” in the propaganda laden corner of the branch, full of brochures with well tanned, silvery haired white people.

Enter smarmy Financial Advisor. Smile & handshake. He’s ready to help open an IRA. He’s calculating his commission to rip me into a B-share mutual fund. If he’s successful he’ll earn another credit toward the annual “educational” conference in Palm Springs.

Finally. We get the box. The manager has more great news. As a result of the “glitches”, we owe money for the last two years.

Video of me laughing at him:

So it seems the core competencies of the retail bank of yesterday are toast.

What do people need from a bank anymore? Certainly I don’t need someone to fill out paperwork for me. I just need a more thoughtful & easy sign-up process. And digital signatures already.

Thousands of bank locations? Nope. A solid website & network of ATMs please.

Lending? (Banks still do that?) I go online or use a loan broker.

A place to deposit checks? I snap pictures of them with my iPhone. Or mail them in.

Bill Pay? Ubiquitous– absolutely nothing unique at this point.

Checks? I find myself using Paypal & credit cards almost exclusively. And when, new arrival, Square becomes more popular I envision mobile peer-to-peer payments being the next big thing for them. Apple already has a patent on Near Field Payments. I’m sure they see the same thing.

Tools for budgeting & smarter savings? Have you seen mint.com lately? Banks are nothing more than data sources anymore.

The last moat of the retail banking business? User experience. I’ll give you some time to collect yourself from the laughing. There’s a reason people are salivating for Banksimple to launch.

On the back of what’s coming in the new world (with smart phones, iPads & the social graph), the retail banking experience is quickly being relegated to a distressed real estate play. Ripe for disruption. An epic misallocation of resources and personnel.

And the bankers are supposed to be the smartest people in the room…

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Also Relevant:

Putting an end to Wall Street’s ‘I’ll be gone, you’ll be gone’ bonuses – Barry Ritholtz

Future Branching at Citibank – BAI.org

Money Center Banks – Yahoo Finance


photo: mike rohde
Posted in: banking, culture