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Chris Zagorski Posts Tagged ‘checking accounts’
Relationship banking: a wish list
In a recent blog post I mentioned that I didn’t feel as though I had a relationship with my bank. Instead we have a “transactional history.” To figure out how my bank can really help me, I’ve started talking to various people about what it is I want from my bank. (My colleagues are interested. My friends and family think I am a bit crazy.)
I really need my bank to offer me services and products that will Keep My Life Running Smoothly. For me that means keeping me organized and on top of things. I struggle with organization. It just doesn’t come naturally to me. And with a husband, an elderly dog that requires almost weekly trips to the vet, three young kids, a job, and 10 caterpillars that I’m raising to become mature, independent adult butterflies, I need all the help I can get.
In my statistically non-valid sample, I’ve determined that most people can use help in getting more organized. Except for my neighbor. She is a natural organizer. In fact, it’s what she does for a living. She is starting a project for me this weekend, so hopefully by next week I will be a Truly Organized Person.
And that brings me back to What I Want From By Bank. I think there are a lot of things that banks could do that they are not currently doing, but would greatly help customers – specifically me. So here’s my wish list:
1. I want all my bills sent to my bank electronically.
2. I want a calendar that shows when they are due.
3. I want emails to remind me to pay a bill.
4. I want budgeting ability.
5. I want to track special things like my Christmas spending and how much I spend on my kids’ birthday parties.
6. I want remote deposit.
7. Sometimes I want to do it all through an app on my phone.
8. Other times I want to be able to do it on my computer.
9. Ideally my phone and my computer would sync everything together for me.
My bank will probably say that all this is impossible. But I know it is possible, because other banks are doing it. For example, First Internet Bank of Indiana allows customers to have all their bills sent to the bank. I know this because a friend of mine has an account with them. She is amazed that my large, national bank doesn’t provide the same type of service. To make sure I wasn’t missing something, I double checked my banks’ website. If they provide the service, I certainly can’t find it.
We all know that USAA has an iPhone app that allows remote deposit. Bank of America allows remote deposit through a scanner. (Industry experts are expecting the bank to launch its own remote deposit app for phones, given some public comments made by the CEO.) I think all banks should offer remote deposit.
Then I found out that Zion’s bank offers a great budgeting tool called eZBudget. The tool allows anyone (not just customers) to set up monthly, project, event and gift budgets. For some reason banks don’t seem to be eager to move into this space and they’re letting outside players such as Mint.com own online budgeting.
So, I don’t really want a “relationship” with my bank. I have relationships with the people in my life, not the businesses. Instead, I want to be treated as a valued customer and be offered the products and services that help me manage my financial life.
Relationship banking, what does it really mean?
I like my bank. Through online banking I tell the bank which bills to pay and the bank pays them. Once a month my bank wants my mortgage payment, so I submit it electronically. Both sides seem relatively happy.
And to be honest, I think I’m a great customer. We have two checking accounts, three savings accounts, a jumbo mortgage, a line of credit, and a credit card account. I pay almost all my bills online and use the ATM for my deposits and withdrawals. I go to the teller once a year around Christmas time. Every once in a while I make a mistake and the bank kindly transfers money from my savings account to cover my oversight. They happily charge me a $10 fee for this service. I don’t begrudge the fee, after all, I’m the one who made the mistake. Clearly I’m a perfect customer – I have multiple products with them, I don’t cost them a lot, and every once in a while they can assess me a fee. I’ve also been with them for 13 years. Loyal and profitable, what more could you want?
Recently I’ve read a lot about how banks are trying to develop “relationships” with their customers. I also see a lot of offers in the Comperemedia database about “relationship accounts.” (I’ve presented on this topic – see the Seven Predications for the Future of Banking Webinar.) In thinking about this, I’ve realized that I don’t have a “relationship” with my bank. At least not from my perspective. Instead, we have a “transactional history.”
Case in point…I recently discovered that my bank was assessing an “inactivity” fee on my checking account. To be frank, my position is that the value of all my accounts should trump an activity fee of $6. Typically, in a “relationship” there is a natural back and forth communication process which allows the relationship to evolve and continue. If we truly had a “relationship” I feel the bank would have called, emailed, texted, mailed, or posted something on the site when I logged in as me. Something along the lines of, “Dear incredibly valued customer: We are concerned about the lack of inactivity on your account. Because we love you as a customer, we would like to suggest some ways to avoid an inactivity fee. Please, dear customer, call, write, email or text us back so we can mutually address the issue.” Instead, I took the time to call the customer service department. When I pointed out the size of my relationship, the rep responded by reading me the terms and conditions of that particular account. After doing this twice, I asked to speak with a supervisor.
I’m happy to report that all fees are now refunded. The supervisor convinced me to establish automatic deposits on the account, which solves the inactivity issue, but also builds the balance. I’m happy to report that both bank and customer are satisfied. But I’m still not sure we have a “relationship.” Maybe we just need to get to know one another better.
What my cell phone search taught me about mobile banking
I recently bought a new cell phone. I previously had a phone that let me do my email and instant messaging, but wouldn’t allow me to do much else. I learned a lot of important things during the process of buying a new phone. Most importantly I learned that I only TALK on my phone for about 83 minutes every month. (My husband, who supposedly hates cell phones, uses our other 1,317 minutes each month.) But I’m getting off topic…
When I realized how little I talk on my phone, I realized that I needed a newer phone that would allow me to do more STUFF on it. What else I needed to do on it wasn’t exactly clear, but how else could I justify the $219 we pay each month for our cell phones? (Two phones, both with data and 1,400 minutes.)
After the agonizing process of trying to find the perfect phone, I now own an Android Incredible. I’m still learning how to use it. In fact, I’m learning really important stuff about it every day. So far it’s helped me navigate to strange places across town and find a restaurant in the mall. I also now always know the five-day forecast. Yesterday I bought my first app for the phone. It is going to organize my entire life and I know it will be life changing. I have a long list of other apps that I want to find.
I didn’t grow up with a cell phone. I didn’t grow up with a computer, let alone email or the Internet. I didn’t grow up with a scanner, a fax machine, a color printer, or an iPod. I grew up with Trim Line phones, typewriters and record players. But in this day and age I use my phone to run my life. I use it for my email, instant messaging, my entire calendar, my grocery list, my to do list, Facebook updates, GPS navigation, the weather forecast, to name a few.
And that brings me—albeit in a roundabout way—to my point. Mobile banking. Clearly mobile banking is going to happen – it needs to happen. It’s a question of when, not if. Right now mobile banking isn’t on my list of things to do on my phone. For me to do mobile banking, I need my bank to receive all my bills electronically. And I want to be able to use my bank to do all my budgeting. Those two things would make mobile banking work for me. But right now I don’t want to pay bills remotely because all my bills are at home in a folder. Is there an App for that?
Fees are not the answer to profitability
Nothing annoys consumers more than paying for things that used to be free or feeling that they are being nickel and dimed. As the banking industry struggles with how to recoup money lost to overdraft fee income, they are wise to take some lessons from the airline industry.
The airline industry attempted to stem huge financial losses by charging a wide variety of fees. Flyers now pay to book the ticket, redeem frequent flyer miles, make a particular seat choice, change a ticket, check bags, obtain a pillow or blanket, and for food and drinks.
Unfortunately, added fees haven’t propelled the travel industry into profitability. AMR, parent of American Airlines, posted a $1.5 billion loss. US Air, Continental, United and Delta also posted losses. Combined, the industry lost $3.4 billion in 2009.
Southwest, however, was one airline to post a sizeable profit. The company heavily advertised “Bags Fly Free,” and that strategy may have paid off. The company’s Chairman and Chief Executive Gary Kelly attributes the success, in part, to the fees that its competitors are assessing. In a January conference call with Wall Street analysts, he was quoted as saying, “I hope they charge $100 a bag. That would be terrific. We’ll have 100 percent load factors.”
Going beyond the fee
With customer satisfaction, loyalty, and brand image on the decline over the past few years, banks can hardly afford to alienate customers. Rather than focusing on what fees to charge, the industry should focus instead on innovating services and products that give people confidence. It’s not that fees are never justified – it just might not be wise to assess fees on previously free services. In fact, a recent JD Power study indicates that high customer satisfaction rates are possible to maintain as long as consumers perceive that they are receiving sufficient value in exchange.
At the end of the day, customers know that it’s their deposits that fund the banks other, more profitable, activities. So while consumers need a place to bank, the banks need consumers just as much. Shouldn’t there be recognition of the mutual need from both parties?