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Why banks are hated and what to do about it

I often find headlines around the world that banks are hated, and was reminded of this today when Australian website The Conversation had the headline: Why do people hate bankers? No, really… 

The website cites research that bankers do not make excess profits and are not overpaid, but are hated due to being big and nasty.  There’s more to it than that however.  Banks are disliked as they play an integral role in stifling our ability to enjoy life.  Banks, or rather monetary flows, stifle and oil our ability to relax and enjoy life.

Worries over monies are a core challenge for the majority of society who are poor or unable to pay their bills.  This was illustrated by a very sad case just in the last week of a pensioner who committed suicide over an £800 bill.  In other words, it’s not banks that are hated but their role of controlling money, wealth and credit.

This is a core of banking, and goes back to ancient times.  The moneychangers who Jesus evicts from the temples and the Shylocks with their pound of flesh all emanate this dislike of financiers.  The core of Islamic faith and its rejection of usury is another illustration.  In other words, the use of money and wealth to influence and control is at the heart of faith and civilised life.

Money is the root of all evil … and bankers control it.

This is why money and banking is at the core of civilised life, and at the core of our inherited psychology.  It is also why it is one of the most hated professions in the world.  In fact, searching for ‘bank hate’ in Google produces some fascinating results, with most of the hits being rants against large American bank brands.

It reminds me of the point made by one Australian banker when I first joined this industry, and that was that their brand sucks.  “We know our brand sucks” he said.  “It’s actually one of the least liked brands in Australia and comes just below the brand of cat litter in the rankings of brand recognition in the advertising charts”, he went on.  “In other wrods, we’re less popular than what cats sh*t in”, he concluded.

He was kind of proud of this fact, and it illuminated me to the knowledge that banks know they are disliked.  Most senior bankers undersantd that their start point is that people hate them.  They know this, as their role is to limit our credit and access to cash.

The interesting factor from there is to see that this is an opportunity.  If you know that banks and bank brands are hated, then you know that they will be even more disliked if they do the wrong thing.  If a bank purposefully pushes people into charges thorugh the way they process credits and debits, or if a bank opaquely tries to introduce fees for transactions without transparency, then they know they are going to be disliked even more.

This is what I find interesting today.  For example, the story I used for some time about Molly Katchpole, and her campaign to get Bank of America to withdraw the $5 per month debit card fee is a case in point.  If a bank knows that they start with zero trust and are generally disliked, why make it worse by levying unjustified fees?

That is where banks like Metro Bank start.  Metro Bank – who are our guests at the Financial Services Club dinner on 10th March – begin with the headline No Stupid Rules.  

What are the Stupid Rules?

Probably #1 is to make profits by charging customers for things they don’t know they’re being charged for (that’s why free banking is going to end, as PwC reports this week).

I could go on, as this premise that banks are naturally hated is one that goes to the core of how to build a differentiated bank.  But hey, it’s the weekend so, instead, here’s a little amusement to keep you going until Monday …

 

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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  • I don’t think banks are as mistrusted or hated as much as commentators and the media makes them appear.
    We all trust banks. The proof? We still have our salaries paid into banks every month. And what do we do with the money in our accounts? Do we withdraw it as quickly as possible because we mistrust the bank? No, we leave it there. And it’s because we fundamentally trust banks.
    Do we hate banks? No. The proof? Churn between banks is still incredibly low, to the point of envy across any other industry, except sport. Is there a move away from large banks to small local banks? No. Because we don’t hate large banks. We don’t hate any banks.
    (I don’t work for a bank).

  • Rik Coeckelbergs

    Funny to read how little I missed in the three years of absence in the Banking sector ;).

  • Paul Peters

    Costs don’t equal value.. that’s where the trouble starts. http://www.linkedin.com/pulse/economics-abundance-paul-peters