2003 BANKING TRENDS
June 23, 2003
We have experienced many dramatic changes in Banking since
the turn of the Millennium and particularly since the worst
tragedy in American history on September 11th. Although the
past two years have been a difficult challenge for most,
it appears from many different reliable sources that our
economy is showing significant signs of stabilization. Since
Banking
was one of the first
industries to show the adverse effects, it has been forced
to re-invent itself on many different fronts. Today as individuals
demand honesty and accountability, financial institutions
are reinforcing their ethical beliefs by leveraging the benefits
of responsible investing.
Customer Service seems to be the area of most obvious change
for the average consumer. Prior to these catastrophic world
events, Branch Banking was becoming a dinosaur. This is due
in large part to the usage of ATM’s and personal computers
to do banking. Soon after September 11th however, comprehensive
market research showed that customers once again preferred
the “personal touch,” whether depositing their
paychecks, getting cash, or even procuring an auto loan.
Even though there are some computer-friendly customers who
enjoy direct deposit and on-line banking, it seems there
are still many folks who do not utilize all the advantages
of modern technology. We have all suffered through the irritating
exercise of the auto attendant voice prompting us to push
numbers while entering our sensitive personal data, but after
all that we still never hear a live human voice! Many people
still refuse to use the Internet to make simple purchases.
Currently, we are seeing a positive move back to friendlier
customer service style with smiling Bank Officers conveying
warm greetings on a first name basis. In the volatile millionaire
boom of the last decade, we heard a great deal about “value-added” service,
which showed itself in a variety of ways. What was that value
anyway? As long as everyone was making money, there always
seemed to be a perceived value. Now that bank profits have
suffered from the much lower interest rates, the corporate
strategy for capturing new customers must be some other reason
than price.
In the affluent Wealth arena, as Bankers begin to compete
with Brokers in order to capture their clients’ invest
able assets, {the same share of wallet} a need for more sophisticated
credentials has surfaced throughout many Private Client Services
groups. Money Managers have observed that a more informed,
savvy investor has emerged who now wants proof of performance,
as well as the implied standards of polish and professionalism
from their Account Executive. Integrity, credibility, and
knowledge are making a huge comeback on the Wealth Management
horizon. Confident investors know that they have many more
options today while realizing that they can command a higher
level of service than ever before. If the boom of the 90’s
caused investors to get casual and careless, then certainly
the recession has had the opposite effect.
It is phenomenal that the average after-tax income of the
wealthiest one percent of US households increased by almost
200% in the last two decades, but economists have yet to
accumulate the necessary data to determine the reverse fallout
in the last two years! As we have read, not only is the high
net worth client being courted by an increasing number of
financial service providers, but so are the average middle
class working Americans!
Even the Credit Card industry, which has made a substantial
profit margin by historically charging high interest rates
to its customers, has been forced to lower its rates in order
to remain competitive. Now they offer more customer perks,
promotions and friendlier phone service just to keep our
business. Recently, I experienced one well-known International
Card Group which asked me, “how would I rate its service
and were there any items I could suggest for it to do better”?
Yes, as a matter of fact, I did have comments. I have also
noticed that several well-known USA Banks have now trained
their employees to answer the phone with “how may I
assist you today with your Banking needs?” Not only
are they asking for our business in a very polite, assertive
manner, but they are treating us as if our call is important!
The changes may seem subtle to some, but if it can turn
a bleak day into a brighter day for precious customers, it
is truly worth the effort!
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