Back when I was a happily married guy, my wife – Kate Conover of RE/MAX in Saddle River, NJ (an excellent, thoroughly honest, and very successful agent for any of you relocating to the greater New York metropolitan area) – decided she needed a home equity line of credit. At the time, as I recall, house prices were soaring, but no one this side of Alan Greenspan was sure how long irrational exuberance would last. Agents in her office were taking heed of that old advice that banks only offer you credit when you don’t need it, so they were all heading out to sign up for credit while times were good.
Anyway, a local community bank was offering highly attractive terms on a home equity line of credit.
For some reason the bank required that each of us come in a couple of days apart to sign the documents twice. In any event, we each made two trips to the bank separately – having to do with busy schedules rather than general incompatibility at that point, I think. The bank had collected pretty much our entire financial history by then, yet in four trips neither of us was offered so much as a brochure describing the institution’s other products and services.
Now, as a journalist I am pretty much accustomed to benign neglect from financial institutions of any scale. But Kate was, at that time, pretty high in the real estate rankings in Bergen County. Surely the bank might have offered some hint of interest in business other than a bargain-priced line of credit.
Nope.
And that pretty much typifies my experience with retail banking. I am wrapping up a section on retail banking for our next issue, and as I listen to vendors and bankers talk about CRM systems, fancy new branches that the cutting edge insist on calling stores, and their friendly personalized service, I have to wonder how it all seems to miss me.
My bank in New Jersey now operates under the Bank of America brand. Analysts tell me they are hiring retail experts and making a big push to change banking. In suburban Wyckoff, where my account is, they seem to have added a couple of fiftyish greeters to the lobby, while in Paterson, where I live, they replaced a genial unarmed elderly security guard who dressed in blue with a fit young man dressed in black and sporting a 9 mm automatic. And while with Fleet you could get through to the branch by phone, now everything goes to a call center. In my years of banking there, I have never been approached for any new product or service. A few months ago, in the course of moving some money around and wanting to try the highly touted Commerce Bank, I opened an account at a branch in Fair Lawn, NJ. The account opening went smoothly. As usually happens to a large sum in my checking account, this brought new meaning to the term velocity of money and most of it quickly wound up at Vanguard. But I haven’t heard a thing from the bank since opening the account.
And it’s not just me. In our current issue, Bruce Holley, a vice president at The Boston Consulting Group’s New York office, says that after he received a mortgage for an apartment, and filled out the usual detailed form that showed he gets a bonus two times a year, the only personal communication he received from his bank was an offer for auto insurance. He has never owned a car. Unfortunately, he wouldn’t name the bank.
A month ago I wandered into a Washington Mutual branch in Greenwich Village, looked around at the handsome design for a few minutes, and left without disturbing the engaging conversation of the two young women at what I guess was the greeting desk. By contrast, I don’t recall ever getting more than 20 feet into a Gap store without a pleasant offer of assistance from a cheerful young person working there.
In our next issue of the magazine, Ray Davis from Umpqua Bank explains how hard they work at maintaining a culture of intelligent sales. The $5.5 billion bank with branches – ok, stores – in Oregon, Washington, and northern California attracts a regular flow of bankers who want to see what they are doing. Many, says Davis, shake their head and say it would never work at their institutions. His conclusion is that they just don’t want to do the hard work it would take. Alenka Grealish, Celent’s manager of banking research and a Portland resident, describes in our upcoming interview how her mother recently moved to town, opened an account at Umpqua at her daughter’s suggestion, and is thrilled with the way the bank treats her. She plans to move her CDs to the bank when they mature. Grealish, by the way, does her banking with Schwab.
Technology provides the tools to offer great service and in this next issue a few leaders describe how it can be done. Personally, though, I wonder if retailing is the right paradigm for banking. So far, I haven’t seen much indication that bankers get it.
Maybe I need to move to Portland and open an account with Umpqua.
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