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The schizophrenic bank

There are really conflicting needs in banking today, which are hard to break.  The result is that many banks are suffering from a form of schizophrenia where they want to be two organisations in one. The first organisation is nice and cuddly, customer loving and smiley. The second is a bad tempered, suspicious, customer hating grump. Unfortunately, most banks display the second character more often than the first, but both exist and it is managing this schizophrenia in a way that ensures the second character is suppressed that is the secret of success for a few banks. However, no-one makes money out of being nice, so does it matter whether a bank is dominated by the grump or the smiley?

I’m not sure.

The conversation came to light as I discussed hiring policies with a small group of bankers last week. The head of one major UK bank known for its great customer service was saying how they had changed policy over the years from hiring based on experience to hiring based upon attitude. Does the person engage in a warm conversation, are they focused upon the individual they are talking with, do they show empathy, etc. The more ticks in boxes the person has for the right customer facing attitudes, the more likely they are to get the job.

Now I use this bank’s services and can confirm that, on the telephone, they have one of the best telephone manners of any firm I deal with, not just in banking but across the board.

They’re brilliant.

But they’re tiny by comparison with most banks that I use.

No-one makes money out of being nice.

The main banks I use are obvious grumps.

They disempower their staff from any decision making capability.

Everything is carefully controlled and counted, from the use of paper clips to toilet paper in the branch loos.

All processes and operations are costed, timed, ticked and notarised.

It’s all about control.

This bank wants operational efficiency and cost-income ratio to be the best in the industry.

The first bank’s cost-income ratio is over 60% and is unsustainable.

The second bank’s cost-income ratio is under 40% and it makes money for its shareholders.

No-one makes money out of being nice.

Strangely enough the controlling bank is the one that wins out every time which is why most banks want staff to remove their brains before entering the office.

You can’t have staff with attitude or who use their brains to engage customers in a frank and open dialogue. After all, they may make a boo-boo by telling the customer they’re right. They shouldn’t have had those charges. Yes, your overdraft fee is steep, we’ll waive it this time.

That’s not operational efficiency. The control is not there. You can’t have empowerment with control. The two are mutually exclusive. Or so the view goes.

No-one makes money out of being nice.

This is why banks are all about process management, workflow controls, strict rules and procedures. Banking is about risk and security, not engagement and openness. Allowing free reign to emotional engagements of customers through staff that create experiences is therefore an enema for most banks as no-one makes money out of being nice.

Equally, it is why banks are not focused upon innovation as innovation implies entrepreneurialism, imagination, creativity and risk … these are all things that a bank needs to suppress as that does not deliver security, control and efficiency. In fact, innovation does the opposite.

All in all therefore, a bank is not a schizophrenic.

A bank is about control, security and efficiency.

It is not about being smiley, warm and engaging.

So stuff Mr. Smiley and hello Mr. Grump.

That’s the bank I deal with and, like it or lump it, it’s the bank we deserve.

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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  • Abhijit

    Banks can work fine even if they have good mannered employees. In India we are still prefer banking with the banks which have friendly employees.
    It is more to do with the business acumen of the bankers who know to say no to the non-remunerative businesses even while retaining the relationships.