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How Banks Have Changed

Don’t Panic, Mr Mainwaring!

The Bank Manager was at one time a respected member of any community. In the 1960’s it was not by chance that the creators of BBC’s “Dad’s Army” Captained the hapless Home Guard platoon with a pompous but well-meaning Bank Manager. Have things really changed that much?

Job Losses

When the National Australia Bank announced job losses at the end of 2005 you might have thought, “So what?” However, NAB owns both the Yorkshire and Clydesdale banks, which meant that these job losses were happening in Britain and 10,000 were made redundant. The NAB put the job losses down to the organisation having to become “more nimble and customer focussed”.

Focus on the customer is definitely a business attribute of the 21 st century. For decades Banks were able to get away with operating how they wanted. The public came to them and used their services: Bank Managers would offer advice on mortgages, bank accounts, insurance and all sorts of loans. Often the Bank Manager was seen as a pillar of the local business community, a key figure in such associations as the local The Masonic Lodge or the Chamber of Commerce.

Today Bank Managers, can still offer advice. But the Bank manager of today is not the Bank Manager. You don’t call into your branch for an appointment with the most senior man in the bank anymore. You call in and have a meeting with a Business Manager or a Personal Loans Manager or an Account Executive.

The advice Bank managers give out these days is heavily regulated by the FSA. They can only offer advice on products produced specifically by their Bank and they must by law tell you this at the start of any conversation about any products.

Unfortunately, it’s a sign that legislation designed to protect the public from “cowboy” insurance salesmen has gone too far when it also stipulates that a Bank Manager must hand over his (or her) business card at the start of the meeting. Such detail is irrelevant.

But what the legislation does do is effectively handcuff High Street Bank Managers everywhere intro offering the public expensive products.

This is perhaps the biggest change in Banking since the 1960’s: many of them can no longer actually compete on cost in the modern Financial Services market. How then can they be more customer focussed? The answer is by shedding jobs to cut their overheads so they can reduce the costs of the products their offer.

A passage to India

As staffing levels were reduced in British Banks so customers had more and more contact on the telephone. Then the Banks had a great idea of a way in which they could save even more money, or so they thought.

Opening customer facing call centres in India was almost one of the biggest errors the banking industry ever made. People it seems objected less to the fact that the call centres were abroad but more that the Banks were lying to them. With typical banking arrogance, the early call centres had assumed the public were, quite frankly, stupid. When voices that were so thickly accented with Indian introduced themselves with names like, Peter, Mary, Joan, David and other suburban inoffensive Englishness customers knew they were being lied to. And if they lied about that, what else was the Bank lying about?

Fortunately for the Banks they saw sense and while some may still object to speaking to Deepak in Delhi, at least you are being treated with respect.

From here to there

So, many changes in the Banking industry have occurred over the decades. The next few years will see even more change, but this time it will be the power of the consumer that instigates those changes. Such is the result of being more customer-focussed: it means the business has no choice but to bend to the will of the customer as path with which perhaps most banks still aren’t familiar

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