I recently talked with my Bank Manager, naturally a very important person for us. After we had talked about us, we talked about the changes in his industry and in ours. And he explained the revolution in retail banking, and especially in banking for small businesses, over the past fifteen years or so.
At the start the banks’ main focus was on pure short-term profit. The advent of call centres and of Internet banking meant the personal touch was no longer necessary. So people were moved around very quickly, promotions were often rapid and talent was sought in every other sector of the economy to boost the banking talent pool.
And the customer became a number. I remember his frustration, as he couldn’t get close to his customers. Equally customer loyalty wasn’t valued so we got much better deals by moving, first away and then back.
He felt that banks had forgotten that banking wasn’t just about numbers, it was about people. About ten years ago, after the crash, Business Bank Managers took back control of local areas. And they were kept in those areas for a time, developing local relationships, understanding their customers properly.
But then internet banking technology got better, and more relied upon. And then it was the customer who took the lead, deciding that it was quicker to go on line than to phone. It was faster to rely on a machine driven decision than to wait for a human.
So now there are fewer business banking teams, covering more people. And banking has moved out of branches, less cash, fewer cheques, and is carried out more remotely. And branches are closing.
Banking is a huge business and its model has changed several times since the start of this century. I am not sure automotive retailing has changed much in that time, but it’s about to.
You can bank on it.
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