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Banking in 2013 … just like 1913

So I’m buying a house and have a conversation about the
house buying process with a bank colleague.

He is adamant that this is where the branch comes into
its own.

I disagreed, but accepted that it may be different in different markets, but that all markets are moving in the same direction over time.

He challenged this, so I explained that my mortgage process
had involved a search online, the completion of a form online, a number of
emails, paper mails and phone calls, and that was it.

In discussing the story and the process, I realised that
there had been no requirement for me to physically visit an office to make an exchange in the process.

In fact, the only need for me to get off my butt and do
something, was to visit the bank.  Not the bank providing the mortgage, but my bank branch to make a payment.

Why?

Here’s the story.

I’m online and have to move monies to cover the deposit on
the house.

I enter all the information and hit the enter key.

The message comes back:

Your daily online payments service
is limited to a maximum payment transaction of £20,000.

Very useful.

So I call the bank and go through the authentication process.  When I get the call centre human contact, I explain
my problem and ask them to make the payment to my law firm to enable the exchange.

“Oh no”, she says.  “For
that sort of amount, you will have to go to the bank branch and ask them to
make a CHAPS transfer”.

Whoever said that the low value and high value payments system
were converging?

Luckily, I’m on a day where I can get to the bank branch, so
I goes down there.

My bank branch is quite pleasant actually, but then it is in
what you would call a high net worth catchment of London.

It has a nice open space, a welcome desk and two teller
windows that are bright and airy.

It is very unlike my previous bank branch, which you would
call an urban aspirational area.

In that branch, there were three gloomy teller windows,
regular queues and no welcome desk.

Same bank, but very different branch atmospheres.

Anyways, I go up to the first teller – a mature gentleman
who looks like he should have been drawing his pension years ago (and probably
is, as there’s nothing like cheap labour in a bank) – and explain that I need
to do a CHAPS transfer.

“A CHAPS transfer you say?” he barks through the audio
system (yes, banks still have protective windows so you can only talk to each
other through a microphone).  “You’ll
have to sit over there then and I’ll call someone to help you.”

CHAPS transfers are a specialist activity you see.  Not for the everyday teller to transact.

So I go and sit at the welcome desk, whilst waiting for someone
to deal with my transfer.

Wasting time.

I resent this waste of time, but accept it as I purely want
to buy a house (that’s the point of this transaction, and nothing to do with
the bank who are not even providing the mortgage loan).

The branch is empty.

There’s no noise or conversation.

And then I hear a muffled “jfns kshdfi sdjfke”.

What?

Then I realise that the other teller – who looks a bit like
the mother of the first one – is calling me over.

“Hello dear, I hear you want make a CHAPS transfer?” she
schmoozes.

“Yes”, I say.

“Well I can deal with that for you.  Now what do you need?”

So we start the transaction at the teller counter whilst
Roger, the fellow teller, gets a customer.

The new customer puts me off my dealings with Ethel, Roger’s
mum, as they have a very loud voice.

“Hello young man”, she bellows. “I’ve just been collecting
coins for a while now and would like to turn them magically back into bank
notes.  Is that ok?” she asks Roger.

Ethel’s doing some sort of admin on my account, so I listen more
closely to the conversation next door.

“Yes”, Roger says, “what have you got?”

“Well I’ve got a bag here of £2 worth of 10 pence pieces, £2
of 20 pence pieces and £5 of …”

“No you don’t”, says Roger rather belligerently.

Even Ethel looks round.

“You have £1 bags there”, he says.

“No”, bellows the schoolmarmish customer, “I have £2 worth
of silver in these two bags and £5 …”

“No you don’t”, Roger says again.  “That’s a £5 bag.”

Then he starts to tell the woman that, according to the bags
she is using, she either has £5 in 10 or 5 pence pieces in the bag, or £1 in 1
or 2 pence pieces, but you cannot have £2 worth of 10 pence pieces in a £5 bag.

Natwest_coin_bags

Jeez.  Jobsworth
strikes again.

The woman looks a bit exasperated and I’ve forgotten why I’m
in the bank branch in the first place.

Then Ethel says, “what would you like this transaction to be
called?”

“What?”

Ethel repeats the question and turns the screen towards me
to show that I can give this transaction a name.

“Oh.  Call it Peter or
David, I don’t mind”, I says, still whirling from Roger’s stubbornness.

Then I notice that Roger is taking the bags off the school
marm and re-bagging them.

He’s taking all the 20 pence coins out and weighing them and
then bagging them in different bags.

He does the same with her 50 pence, 10 pence, 5 pence, 2
pence and 1 pence bags.

Yes, she has a lot of bags and a lot of coins.

I’m thinking she should have gone to Metro Bank, as they have
coin changing machines in their lobbies,

Anyway, I’m now focused on my transaction which has reached
a critical stage.

“So”, says Ethel, “can I just confirm you want to make this
CHAPS payment to your solicitors today, and are happy to accept our charge of
£23 for doing this?”

“What?” says I, “you’re charging £23 for this?”

“Yes Mr. Skinner, that’s the cost of using CHAPS I’m afraid.”

No, I think, it’s the old cost of doing business with a high
value payments system.  After all, it
costs the same to transfer a penny today as a billion pounds.  It’s called an electronic transfer but, with
high value payments, the electronic transfer costs more for the cost of me walking
down to the branch and taking up the staff time at the branch to do this.

The latter point was clearly evidenced when John was called.

Who’s John?

Why, he’s the branch manager who has to check that Ethel’s
set up the transaction correctly.

So whilst Ethel disappears to get John, I look around and
notice that there’s now a bit of a queue in the branch.

There’s a chap reading a newspaper who looks like a vicar, a
lady who methinks has just ducked out of the horse riding school, and a chap
wearing a helmet making out to rob the bank … argh!!!

Oh, no, he’s just a security guy from Group4 delivering some
secure goods to the bank branch.

Of course, no-one is getting served as Ethel is trying to
find John who’s out back somewhere having lunch, whilst Roger is still counting
the 1 pence bags of coins into the correct bags and that all takes time (he
might get to the 2 pence coins before closure).

Finally, Ethel returns with an emaciated chap who, by comparison,
appears to be her grandson’s age.

John looks at her screen, looks at my account details, the transaction
request, the payee’s information and, after a while, says: “identification?”

I’m not sure whether he’s talking to me or Ethel.

Then I notice his drawn and grey face is staring at me through
thick pebble glasses.

“Oh?  I’m Chris Skinner.”

“Not good enough.  Do
you have ID?” he says.

“Of course”, says I, “I’ve got my card here and have entered
my PIN.  Isn’t that good enough?”

“No”, says he. “We need photo ID for a transaction of this
size.”

Aha, methinks, no problem. 
After all, I’ve been in this situation often enough to have remembered my
passport.  So I present that and John
gives a small look up to the stars, before taking it from me to photocopy.

Roger’s now got to £3 worth of 1 pence bags, and the queue
has been joined by a man who I’m sure starred in Crimewatch last week, and another lady who, if anyone spoke to her,
would probably run out of the bank.

I start thinking that it would be nice if the branch had a grandfather
clock ticking.

That would make customers realise the waiting times are lengthy
or maybe it’s better to put music in the branch instead.

Either way, we are standing around waiting.

Finally, Ethel returns with John soft shoe shuffling behind.

“That’s all good Mr. Skinner”, says Ethel, “now can you just
confirm by entering yes on the terminal”, she requests, pointing at the Chip
& PIN machine in front of her counter.

I do so, and smile as all is confirmed and completed.

It’s only taken an hour out of my day, unlike the six customers
now queuing who have been doing just that for about half an hour.

So the only physical movement required so far for my house purchase
has been to visit a bank branch to perform a high value transaction at a charge
of £23.

Nothing like the internet age, is there?

Postnote:

It’s better than the experience I then had in my local post
office where I wanted to send a recorded delivery letter to my solicitors.  The post office system was down and they had
run out of stamps!

 

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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7 comments

  1. Chris – for most people a mortgage is the single most important financial decision they will ever make. Did you try enquiring about a mortgage in your bank branch and comparing it with the one you had selected online?
    If it was matched, or improved then it would have been worth the time spent in the branch. If it wasn’t then you would at least take comfort in knowing you were getting a good deal?
    Handelsbanken is the fastest growing bank in the UK, largely due to its mortgage business which is handled in branch by a manager who is empowered to make decisions based on his views on you as a customer. Mobile and online can’t replace the natural emotion you get from dealing with another human.

  2. Another great story Chris. Not unlike tha bank story in my 2000 book Lessons from the Future! Nothing ever changes bankers! We MUST do “My Bank: The Opera!” The workd is crying out to have a bit of public fun at their expense.

  3. Chris, i read your blog each morning with pleasure but this one takes the prize! God, it is funny :-) you take bank blogging to the highest level. Thanks!

  4. Chris
    CHAPS recently upgraded their settlement formulae (Liquidity Saving Mechanism – LSM) such that smaller transactions would net settle every 5 minutes or so. The effect is that the liquidity and collateral requirements on banks have reduced substantially and therefore the cost of processing the CHAPS payments has reduced accordingly.
    Interesting therefore that the banks are not passing on these cost savings to the customers who are requesting these smaller value payments.
    Industry readers please debate ??

  5. Thanks David
    I did call my mortgage broker and the best deal he came up with was 0.1% higher interest than the best found online, and hence I went with the online version.
    And you’ve reminded me that I did ask one bank that I have an account with – a bank without branches – but their answer was ‘no’.
    So much for the bank that likes to say ‘yes’ 😉
    Chris

  6. If the daily transfer amount is limited, you simply make several transfers, for the maximum amount, several days in a row.

  7. Everything looks nice until compliance and money laundry comes to play. When I needed my credit, I filled the origination request in the online web form of my bank´s web banking and they let me know when and where to go to sign papers, in less than 10 minutes everything was finished after my branch visit, so if was not traumatic. Of course I had to brought some stuff they asked for. Next time, the papers and stuff again and again. I feel that regulatory requirements are a blocking part for customer servicing. Why do they need to take a photocopy of your personal Id everytime you ask for service?

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