OPINION: Banks have been back in the spotlight this last week. With the release of the final report from Australia’s Royal Commission, we have seen the leadership of our banking executives under fire. And the result has seen resignations at one extreme and humble “we must do better” apologies at the other.
Banking leaders are well paid. In fact, I think they are among the best-paid executives in this part of the world.
The remuneration levels extend well down the food chain on both sides of the Tasman, and even those regarded as “middle managers” are well looked after. Despite a pay level that should attract the best, and marketing budgets that run into millions, what we see is an industry who take their customers for granted.
I imagine that most of us don’t consciously choose our bankers. Typically, our parents open our first bank account for us and in all likelihood, we turn that account into the banking relationship we then maintain for our lives.
And whilst we come to crossroads in life, such as getting married, buying a home or starting a business, all of which may sometimes prompt a change of banker, typically their customers don’t move away to competitors very often.
The reasons are many, but generally it is too hard to change. Once we have everything – accounts, payments, mortgages, credit cards and now connections to our various online accounts – set up, there must be a compelling reason to change.
But the offers from the big four are not substantially different, and even if our own bank stuffs up, it’s easier to get over their mistake and move on. So we stay.
Banks talk about helping their customers, but the reality is they don’t add much value. Sure, they might lend us money to enable us to do something, but that’s about it.
My experience with banking executives suggests that, whilst they talk about being customer-centric, their real focus is on their own agendas. Moreover, their desire to understand their clients and their clients’ businesses is almost non-existent.
If you are trying to turn around an under-performing business, grow your sales, or relocate premises, the ability of the average banking executive to contribute to that is non-existent.
When you think about it, in most cases, your bank is the business partner you interact with more often than anyone else. And when the going gets tough, it is your bank who is in the prime position to offer support. Often, they are in a position to spot the difficulties before the business owner does. Secondly, they have, or should have, the resource to help.
But they don’t do that. The first thing they do when the going gets tough is to write you a letter reminding you of your obligations to them, protecting their position and demanding that you decrease their exposure in some way. So, just as the pressure on you is increasing, your so-called partner makes things worse.
Often their demands of you will force you to stop what you are doing, engage expensive accounting and legal support that you can’t afford, to give them what they want. All at a time when you should be working on improving your business.
A return to values based banking?
Bruce Cotterill: “I can’t help but think that the big banks could do a lot worse than go back to some of those values and behaviours that they once had.”
I think it could be the other way around. Tough times will surely re-emerge, and some commentators are suggesting that could happen sooner rather than later.
Imagine, when that happens, a bank that responds by saying, “…hey we see you’re having trouble, how can we help?” Imagine an offer of 20 hours with one of their business analysts, or an offer to share the benefit of their research and analysis of your industry sector, or perhaps an introduction to one of their clients who could become a major client prospect for you. That sort of support could be a game changer.
Such responses are of course, what the rest of us, whether we’re an SME retailer selling our products to mums and dads in the local neighbourhood, or a conglomerate exporting to a developing country, are required to do for our customers in order to make our businesses viable and successful. We try to help our customers to get what they need to be successful.
Most of us will have a relationship with a bank. My parents’ generation didn’t have that. They had a relationship with the people at the bank. Often that person was the bank manager. The bank manager was typically a sound, calm and cautious type who treated his or her clients with respect. They made an effort to get to know you and were typically genuinely interested in your life, your family and your business.
They kept in touch to ensure they understood your needs and that you understood their expectations. Most importantly, they were there to help.
Of course, those days were simpler and today is complex by comparison. However, on reading through the findings from Australia’s Royal Commission into the banking sector, I can’t help but think that the big banks could do a lot worse than go back to some of those values and behaviours that they once had. Capable, respectful people, who are interested in their clients’ wellbeing, making a genuine attempt to assist their customers to become successful.
After all, it’s what the rest of us try to do with our clients, every day.
Bruce Cotterill is a company director and author of the book, The Best Leaders Don’t Shout. Watch the video and read the original article from 18 February 2019 at: https://www.stuff.co.nz/business/110638579/imagine-a-world-where-the-banks-actually-helped-us