Banking Technology: The Disconnect Between FIs and The Customer

Posted by Steve Gilde on May 2, 2017

My big bank has been in some trouble recently. Big trouble. This bank got to be my big bank by buying up lots of small and medium-sized banks, like the one I dealt with before.  

At one point, it seemed like a bigger bank was a good idea. They would be able to offer a super-sized portfolio of products and services that the smaller banks could not match. This strategy is not unique to my big bank.  It has been common, particularly among the TBTF (Too Big To Fail) club. 

Unfortunately, this has turned out to be a better deal for the big bank than for me. I suspect there are other customers at my big bank (and at other big banks) who feel the same way. Whether it is intentional or not I cannot say, but often the result of this type of strategy for growth is not customer-focused but rather shareholder based.  Buy other banks, rationalize expenses, ask employees to do more, and build the bottom line.

Customer Service Still Matters

There is nothing wrong with optimizing operations as long as you live up to your promises to your customers. That last part seldom seems to be part of the equation.  I could tell the difference in the case of my big bank almost immediately. 

The branch staff at my smaller bank was always friendly and provided great customer service. I felt like they listened to me. That focus on the customer disappeared somewhere into the machinery of the big bank. It seems to me that the big bank is more interested in selling me their stuff than in asking me what I want or need. In fact, that drive to sell more stuff to people is exactly what landed my big bank in trouble. 

For as big and smart as the bank is now, they don’t really seem to know much about me or what I think is important or where I shop or what I buy. By using the technology they have available today, it is possible for them to know all those things about me without too much effort, but it seems that they prefer not to be bothered by customers like me. Sometimes I think that Too Big to Fail = Too Big to Care.

For example, the big bank recently announced they “… believe the future is cardless” and that they are upgrading their entire ATM fleet to support cardless transactions so that they can provide "... another convenient way to manage money. I work in the industry, so I get the whole idea behind the cardless play – at the ATM and at the point-of-sale, etc. - but I wonder what amount of market research my big bank did to determine if this approach would better serve their customers. 

Maybe they did a lot of analysis or maybe they simply saw an area getting a lot of media attention and decided they wanted to position the bank as being innovative and forward thinking. Those are good things to be seen as, but I wonder which customers were asked about what they want or need to manage their money or what convenience means to them. 

Technology vs. Convenience

On the latter point, if I compare what I do today to get cash out of an ATM versus what I understand the “cardless” process to be, convenience does not seem to be part of the equation.

This is what I do today to get cash at an ATM:

  • Insert Card
  • Enter PIN
  • Get cash

Here is how the new and “convenient” cardless withdrawal process works (from the big bank website):

  • Log in to the Bank mobile app
  • Tap the menu in the upper right corner
  • Then tap “Account Services”
  • Then tap “Card Free ATM Access.”
  • Select “Get Code” and the app will send you one that will be active for 30 minutes.
  • At the ATM, select “Use an Access Code” at the lower right of the screen.
  • Enter your 8-digit code
  • Then enter your debit or ATM card PIN to reach the ATM’s main menu.
  • Tap your heels together three times and whisper “there’s no place like phone…”

Ok, the last part I added, but you get the point. The fact is, convenience is what drives the adoption of new technology, not buzzwords or media hype or shareholders. If my big bank would have asked me for input here, I would have gladly provided my feedback. As it stands now, the bank has invested many millions of dollars (big money) into something that I have no interest in and won’t use. This is what happens when there is an inverse correlation between asset size and customer service. 

Who knows, maybe that’s just true at my big bank. Maybe not.

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Topics: ATM Testing, Innovation