The Misery in Retail Banking

As an ex banker (for over 15 years) I am always interested what is going on in the banking industry. Because that is so, I always break out in tears when I pass a bank branch. I cannot think of another industry that has neglected marketing, pr and the entire self representation as much as banks have. Looking at it, if you take the logo off, you would think they are a all the same bank. Marketing and pr from the consulting handbook and the staff still forced into a dress code that reminds you on the 50’s and 60’s. All that’s missing is that the men have to wear a hat.

Considering the opportunities in marketing and pr with social media, technology and all, it is clear to me, the banks haven’t made it through lesson one, which is “get a logo”. Every hair and nail shop has better marketing and public on- and offline representation than a bank. It is not that the banks lost the edge in their services, they are by far not out of style. We all still need the banks, no question. As a comparison, take the telephone, if you want. The service is over a 100 years old, but is still evolving and reinvented almost on a daily basis. There is no day when not all the manufacturer or service providers are not in the news. I mean with good news, and changes and improvements. Why are the banks not able to sell themselves in a similar way? The answer is, there is no reason for not doing it, except inability.

The banks are fighting the same fight for many decades. Market share is key. When you look at it, the numbers are stagnant for the same time period. Growth comes from acquisition, nothing else. The new customers are walking in the front door and the “old” customers walking out the back door. It’s like a cat chasing its own tale. And if there are major changes, then they are the result of “events in the market”, if you want to call the financial crisis and the “belly ups” and “almost belly ups” that way.

Banks ask their customers on a regular basis how happy they are. The results show that people are happy when the bank is able to execute online transfers accurately and someone is greeting  them at the door when they enter the branch. Awesome.

The reason why there is no major change in the industry is plain and simple: Everyone is operating after the same consulting handbook. Regulation is blamed and used to cover up inability to make changes. Innovation as it is present and happening in all other industries is completely invisible. That it doesn’t have to be like that has been proven by the exceptions in the industry. Yes, there are a few. While they are not perfect, they have made an impact and are hopefully able to influence the rest of the industry to come up with similar ideas. As an example I want to mention ING Direct with their “Internet Cafe Branches” and Ally Bank for their commercials. Looking at the big banks in the US, BBVA and Capital One is coming to mind. They have some activity going on that might lead the change in the retail banking world.

Tell me what you think about the retail banking world. Am I to negative, or is the above description accurate? Your comments are appreciated.

10 responses to “The Misery in Retail Banking

  1. Pingback: Retail Banking: Why Consumers Switch Banks – Infographic « New York City Marketing

  2. Pingback: Bank Innovation – State Of Retail Banking – Infographic « New York City Marketing

  3. Don’t know much about retail banking, just know that I have switched banks twice within the past year, due to fees. Think I am on my way to either a credit union or an online bank.

    • Thanks for your comment, Nina. Both, Credit Union and Online Bank will do the same for you with less expenses. If you chose the right one, you might even get a lot more out of it. Incredible.

  4. I believe this industry is governed so tightly by the Securities and Exchange commission, the Federal Trade Commission, there is extreme caution in marketing, advertising or promotion financial services products.

    It is difficult to present to customers retail products with the perception of giving advise or steering clients to a particular product.

    Even with social media, there is so much governance to adhere to that many financial professionals have gone independent to teach people in this industry how to use social technologies without violations.

    Great post.

    • Great comment, Ellen. Thank you. I stopped buying into that regulation thing, because there are so many ways the banks could use social media to do better marketing and pr and come out well with it. Doing nothing at all is absolutely ridiculous and not acceptable. Making themselves a little more interesting and polish up the bad image is possible with some effort and has nothing to do with regulations. Miserable pr and marketing for four years, the exceptions in the industry show that it can be done better.

  5. I think innovation went out the door when the industry shifted to a fee-based structure.

    • Maybe with that came the thought that the fees are gonna be a never ending story and will always be there. The banks are some poor souls these days.

  6. Sorry, I don’t know much about the retail banking.

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