The UK state needs to get some cash back from its investment in the banking industry. Progress has been made in getting the state out of special loans and guarantees offered during the crisis. Taxpayers have received money back, interest and fees to compensate them. There remains the big issue of the large shareholdings in RBS and Lloyds. The lack of progress in this reinforces my view that we should have done all the work supporting broken banks through short term loans, guarantees and restructuring, rather than buying shares. I am not planning to go over that argument again today.
Instead I want to talk more generally about what customers expect from their commercial bank. Fresh from the excitement of reading more about how Terry Leahy transformed Tesco, it seems to me that our commercial banks need a big dose of asking their customers.
My commercial bank should know all there is to know about my finances. My income I earn goes through the current account, and most purchases I make are itemised on a card payment system. The only thing the bank does not know is how I spend the smaller amounts of cash I withdraw to pay for car parks and other purchases that require notes and coin.
In contrast the large food retailer I use from time to time knows much less about my financial life. They know what items I buy when I shop there. They use this data to full effect. I am sent coupons to buy more with a discount if I undertake a larger shop in a specified time. I am offered extra bonus points or discounts on products I have bought in the past. I am invited to special promotions at the store. I get 1% back on all my purchases through the discount card system. In other words, my food retailer knows I shop elsewhere and they want more of my business. They reward loyalty, and they encourage a wider relationship by intelligent marketing.
My bank hardly ever approaches me with an offer of any additional service. It does not notice if I have some cash that could be put into a savings product, or am short of cash and migth need a personal loan. It may see a customer taking out a mortgage somewhere else, or buying a car, but fails to make contact to see if they can help. The bank I sometimes use in central London regards queues as part of normal retail life, and does not match the food retailers in opening sufficient counters when demand is high. The only welcome innovation in recent years is the single queue.
Customers want to feel the bank is on their side, but all too often feel it is not. A healthy dose of getting to know the customers, and offering us the services we want at good value prices would be most welcome.