Okay – so I went to the bank.
In the spirit of my last blog, I figured the best way to start the series was to actually go to the bank. Choosing to immerse myself in the experience, last weekend I entered a branch of a Top 50 U.S. Bank while in New England. I decided I would inquire about open a savings account and ask for information about re-financing my mortgage.
I entered the bank at 9:04 on Saturday morning. 1982.
No kidding. A card table was set up with a coffee urn and a small stack of plastic plates sat next to an open box of plain donuts. If I hadn’t noticed the Splenda and wasn’t playing Candy Crush Saga on my iPhone while I waited in line, I would have thought I entered a hole in the space-time continuum. Through the bay window I could still see the artisanal pizza place, the organic market and the present day.
After a short wait, I spoke with a banker. I expressed interest in opening a savings account and was immediately presented with a series of options, each of which had a variety of balances, fees and rules associated with them, but were otherwise variations on the same concept – part of that concept being the near impossibility of someone with a law degree and a good understanding of finance figuring out whether any option would cost more money than it would accrue. At no time was I asked anything about my income, my financial goals or why I was opening an account at a branch located 285 miles from my home – particularly when my home isn’t within 50 miles of ANY branch of this bank. In a world so heavily regulated that I once saw Betty White get security screened at LAX, this struck me as rather odd.
I was offered a credit card.
We set aside the savings account for a minute as I inquired about mortgages. I was thinking of refinancing as I heard rates were going up…what were my options?
Never ask an open-ended question to a banker. Wow – again, with minimal discovery, I received a litany of products with little information being used to guide the choices. He presented and I probed – and nearly 30 minutes later we had narrowed it down to four options that I was going to take home for further discussion.
We proceeded to open a savings account – a product barely distinguishable from several others, and that of several other banks – with words like Advantage, Choice and “Flex” in the title. I asked if I could open the Flex Choice Advantage with a $10,000 deposit.
Betty White is still being frisked in the City of Angels but 3,000 miles away I’m earning 0.38% on a maximum opening deposit that caused no alarm bells and spurred no inquiry into other products someone with ten grand on a Saturday morning might be interested in. Paperwork, more paperwork, transfers, more paperwork, and two more attempts at a credit card later, I left the bank with Choice Advantage Flex and the promise of earning $1 in interest if I only transact 4 times a month and promise never to speak to a teller again. I have no idea where the Choice is – but I’m fairly certain who got the Advantage. I closed the account yesterday.
I realize that in most cases the banker can differentiate the products – but shouldn’t the customer? Go to a J Crew. Go to an Apple store. The customer experience is completely different. You understand the different features. Someone says you look cute in those shorts. That phone is really cool. No wonder we don’t go to the bank anymore. It’s not cute. Or cool. Just confusing. (And yes, I’m being glib and over-simplifying, but in a world that needed Instagram because Twitter takes too long, it needs to be that simple.)
I do this a lot – open and close bank accounts, apply for credit cards, manage my investments. Also, Neil and I buy and re-finance a lot of real estate because we don’t have children and can’t be trusted with plants. I like to see what is going on in the industry I serve.
Most experiences leave me thinking: There has to be a better way. So many look-alike products and services, but no real choice. So much data, and so little relevance to what we might actually need. So little alignment between the present-day realities of how we live, work, earn and save money. Yet around the world there are so many interesting things happening. Banks offer corporate customers the benefits of ERP software as a service in central America; relationship based pricing in Argentina; inclusive banking for under-served populations in South Asia; new products and social banking services in the UK and Australia. How did it happen that in this country, the country of Innovation – of pioneers and covered wagons and the Wild West – we’ve gotten to the point where our financial institutions are incapable of transforming their core systems and processes to serve today’s customer?
What are we so afraid of? For the past twenty years we have watched every other major industry industrialize, standardize and syndicate business process to deliver new efficiencies, drive flexibility and enable agility – allowing them to adapt and thrive as economic times and consumer preferences change. Yes, I realize there is risk to these projects – and there is a difference between a food manufacturer who can’t ship candy and ruins a child’s Halloween and a bank that loses your 529 and ruins your child’s future – but these projects can be well-governed and safeguarded. The regulatory environment poses challenges – but utilities and telecommunications providers and the government itself are regulated, too — and all have reaped the benefits of configurable enterprise applications.
The banks that are willing to risk reaching for the future are going to own it. There actually is a better way – but pioneering takes courage. (Donuts are optional, but they don’t hurt).
In my next blog, I’ll tackle the digital channel – or, “In Cyberspace, No One Can Hear You Scream”.