What a difference a day makes!
In my last post, I referenced the Edelman 2010 Trust Barometer survey. In another example of market research telling us what we already know, financial services (banks, insurance, mutual funds, etc.) came in dead last when it comes to the trust factor. In a nutshell, banks and their brethren have gone from being a necessary evil to potential charlatans. This is the kind of news that can make companies shake in their boots.
When I created the first draft of this post yesterday, I had a very cynical tone about the likelihood that banks would really change. Today, I am slightly less so and here is why.
The New York Times today carried this headline in its Business section: “Bank of America to End Overdraft Fees“. This is an example of a bank that is voluntarily and publically taking action on behalf of consumers.
Is this action going to start a trend of banks competing to be the most kind and loving to their customers? Of course not. But it’s telling, and a small step towards regaining some trust.
Below, a reprise of the Edelman recommended actions to regain trust, and my take on each.
1. Work with regulators instead of fighting them. That’s not happening. Consider the words of TARP Chief Elizabeth Warren:
“The reason that we’re not changing things in Washington is that the banks have lobbyists in Washington in numbers I’ve never seen. They’re coming not just once a month or once a week, or even once a day. These guys are coming in two, three, four times a day. They’ve got their position papers, and they just keep slamming in the same direction over and over and over. And people that want to advocate for American families, that want some changes, or want to level the playing field just don’t have that kind of lobbying power. And so what we’re really watching here is a David and Goliath story of monumental proportions.”
2. Be honest and transparent in communications. Yes and no. Frankly, a lot of transparency has been forced on the industry. A top example is the Credit Card Act of 2009. How much stupidity, pain and suffering could have been avoided if consumers had seen what I just saw on my Visa bill–that it would take 16 Years!!! to pay off my account if I paid the minimum each month. Why didn’t any single institution think of this themselves? Thus, my skepticism.
3. Focus on quality, not quantity, of communications. Maybe. Banks like to measure things. If they really listen to their customers (and Bank of America gets kudos here), they may realize that they make more “noise” than they need to. Less can definitely be more.
4. Spend less time pushing product and more time providing service. This is the crux of the matter. If banks do this, much of the other problems will retreat into the background. It’s going to be hard to do and it will take time because banks are filled with product managers and sales people, all with individual goals, and frequently a culture that rewards speed and volume over one to one marketing and personal relationships.
5. Engage customers and employees alike. The financial meltdown and the visibility of banks as major contributors to the problem has had a major impact on employees. If they don’t feel good about the company they work for, how can they be expected to engage customers? Banks have the power to do this, but do they have the will?
Only time will tell. My guess? Banks will behave less badly, at least for the next few years.
Right Brain Matters 