Banking for dummies

Banking For Dummies

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…

___________________________________________________________________

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

47 thoughts on “Banking For Dummies

  1. Old Bent Nail

    At the risk of being social media trite, congrats on FP! Enjoyed this post, and your bitter sweet blog at large. Somewhere out in the ozone is a little savings book account from my elementary school daze that was a required activity every week in the 50’s. It must be worth millions today. I do all my banking and investing via the web. I pay all bills (many MANY bills, unfortunately) online and have never been done wrong. Like you recently experienced, practically every time I see fit to wander into a bank office, I am immediately cut down a notch or two in the self worth graph. Glad to “meet” ya!

  2. Mikalee Byerman

    I feel your pain — recently went through my own “personal” banking scenario, and realized at that moment why I heart the Internet. So, so much…

    Great tips at the end — I’ll be checking them out!

    🙂

  3. Lakia Gordon

    Oh, wow. They couldn’t find your deposit box AND you owed money… that’s crazy. I really enjoyed your post and checked out the Square too. This is definitely the wave of the future. I think this would be really good for businesses too.

  4. CrystalSpins

    It seems obvious to me that you are WAY smarter than the average bank user. (I have observed that smart people get frustrated a lot.) So I can imagine that adds to your ire. And the second example you gave would be enough for me to try to report the bank to someone. (I’m a tattle-tale.) But it’s a pretty extreme example, and I can’t imagine the average bank user has had a similar experience.

    My mom works at a local credit union so I bank there. And actually I have never dealt with a bank for anything other than cashing a check while out of town. I don’t know if its all that different from dealing with a bank, but all of my experiences with my credit union have been great. With me, they usually are the smartest people in the room. They clearly know more than me and they can explain complicated things to me. Plus, I like them filling out paperwork for me.

    So I personally still have the desire and need for human contact and someone to hold my hand through all those processes. Especially since everything seems to keep getting more and more complicated.

    Crystal

  5. Jackson Rodgers

    I feel your pain. I opened a trade account at my bank last year and it was a slow, painful process of filling out forms, correcting the employee, and then correcting her again. At least the bank offered free coffee.
    Brick and mortar banks are dying. Online banking is here to stay.

  6. I Made You A Mixtape

    I agree with you- visiting your bank can be a painful experience…lol… everytime I have to go in – they try to sell me something. I don’t eant another loan, credit card etc. etc. I just want to go in, pay in a a cheque and leave. I think banks will phase out eventually. I do everything online if I can.

  7. María Eugenia Jaimes

    Over there do you have this little funny thingy where you have to go to the (exactly) same bank office where you first opened your account to do important stuff -like closing the account or doing invests- even if you moved as far as the moon? It’s a classic.

  8. happypoppeye

    Great post. Banks suck. …for consumers that is. I think you missed a real big negative these days. That is interest. What the hell happened to that? I’m not supporting the banks, and honestly, I still look to make money when I put it in an account. Too big to fail now bigger since they didn’t fail. In my opinion many of those too big to fail banks should still gfail because they have a bad business model.

    Nice post,
    John

  9. Joe Hart

    While I agree with you on the incompetencies of the banking industry, I AM MYSTIFIED!! How you maintained enough humor to write about said experiences. I had the same problem several years ago (corporate account); finally had to close it and go to a credit union. All my CU experiences have been very pleasant, indeed!!

  10. lookitsjessica

    I love everything you said. I work in PR and Marketing for a Credit Union and I feel you pain. We hear stories everyday from people who are tired of being jerked around by banks. Check out a local credit union. They usually offer all of the same services as a big bank (including business and corporate accounts) but are locally run and as a member, you’re part owner so you have a say in what happens! (Shameless plug, I know, but I truly believe Credit Unions are great!)

    Thanks for sharing your story, I love all the points you made regarding services and integration with online portals.

    Great post!

  11. Trinity River

    Congrats on the Freshly Pressed. I share your mystification at the banking industry. They must be subsidized from the Intergalactic bank consortium of something. Customer service is not even a vague concept in the ones I’ve been in lately.

  12. Jenna

    I once worked at a bank for 3 months and it was as boring and inefficient as you could probably imagine. They weren’t getting rid of their Brachs lollipops as a “Customer Appreciation” tool anytime soon.

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  14. SpinnyLiberal

    But “you can wait here” in the propaganda laden corner of the branch, full of brochures with well tanned, silvery haired white people.
    Ahahaha. Love it.

    The second incident involves a safe deposit box. Old school baby.
    I love those things. Totally old school, where a bank lady had to buzz you in. Makes you “feel” important. For 30 seconds, anyway,

    Congratulations on being FP!!

  15. leadinglight

    I guess my banking experiences haven’t been too bad but I haven’t done much except cash checks. I hate how persistent they are in trying to get me to sign up for a credit card though. I said no to one lady and then another calls a week later asking my decision!

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  17. rp71

    I have been a banker for 14 years now – but I still totally understand each and every word you write. Even I go through this pain everytime – and think “why dont the banks get it?”.

  18. thefengshuidiva

    The human touch is there at the bank…but I am not so sure the intelligence is. I agree, it took me 45 minutes to set up my kids accts. It took me 2 visits to set up my personal because they forgot to assign the right numbers to my acct.
    Took me over 2 weeks to get a debit card and the bank if a local(not a BIG bank). We use it to park our money to do online banking…but earn no interest. They hire all part-time bank tellers…and many are just there until they find another better paying job.

  19. CrystalSpins

    They do constantly try to sell me life insurance. But I already have life insurance. Way more than I need actually. Other than that my CU doesn’t push anything on me. So I must either be lucky or an anomoly. Thanks for your post!

  20. makingup3000

    Once I discovered online banking and direct deposit years ago it saved me so much time and very rarely ever go inside a bank. Maybe once every three years or so. Besides they creep me out. I always think they are going to get robbed while I’m in there.

  21. Ryan Brockey

    You’ve captured the “retail” banking experience. That’s what we call it. From our side.

    I’ve worked at two different Too Big To Fail banks in the last six years. I hate it.

    Customers don’t need us. While I’m at work, doing the same task over and over again, helping the same five customers with the same three transactions all day because the corporate overlords have stripped tellers of any real ability, I design algorithms to run a robot that could do my job. Including the compulsory sales.

    I keep hoping customers will wise up and realize that there are so many better options.

  22. Ryan Brockey

    @thefengshuidiva

    We all are just there until we find a better job. Working in a bank branch sucks. So you either try to work your way up–but then you become a corporate tool–or you move on as quickly as possible.

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  24. jollof

    Great article! As a banker myself I can totally relate. Technology may just wipe out a huge chunk of the banking industry workforce once all the ‘dummies’ get the hang of online banking, lol

  25. Katie Gou

    I used to work in a bank and as soon as I left, I closed my bank account straight away and moved elsewhere. Having been behind the scenes, I can confirm these instances occur often! The emphasis now is on sales and making money, rather than putting customer service at the heart. I did not receive ANY customer service training, only training on persuading customers to take out unnecessary products to drive them further into debt. If you refused, you would be given a disciplinary. I don’t believe in offering products unless I really feel that they can make a difference!

  26. TheRegularAmerican

    Banks? Where else can you earn .001% interest on a 6 month cd? I haven’t been in a bank in 2 years; I use a credit union. All we need is the U.S. Post Office to shut down and I’ll be happy. The only things that arrives in my box are ridiculous circulars that go straight in the garbage can next to the mail box, and THAT CAN is usually overflowing with circulars from everybody else’s mail box. Where are the tree-huggers when you need them? Oh, I know. They’re standing in line at the DMV trying to register their Prius’s.

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  28. apostatescientist

    Wise up people!! – the retail banking would like nothing better than to get you all comfortably digitised. That way they can get rid of all those profit-eroding employees and just sit back and cream off every transaction fee, penalty payment and dribble of interest they can can get away with. And when things go wrong there is no one but no one you will be able to walk up to and demand an explanation of. You won’t even be able to start a run on your bank by turning up before opening time, hammering on the door and demanding they hand over your money in cash. At the first sign of any problems, someone in some floating, fabricated independent state will press a button and freeze you out. This is the real reason they make it all so difficult – to drive you deeper into their parasitic embrace 🙁

  29. theamberlight

    Great info and wonderfully enjoyable post. I have been to the bank 4-5 times in my life…it was never fun. They will see their demise I am sure, most likely in my life time. Congrats on Freshly Pressed! This is a blog that deserves lots of eye to see it! I will be shcking out some of your links too! Thanks!

  30. Anonymous

    Wait until you need a bank check or an override of unavailable funds or any exception from someone that actually knows you, good luck.

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