I often present around the depressed state of the banking markets.
Usually, it’s a political and economic overview of the banking system that shows the issues of regulatory change, customer trust and systemic risk.
So I was surprised and amused when a senior vice president of retail banking for one of Europe’s largest banks gave a similar presentation.
It went something like this …
Good morning ladies and gentlemen, and thank you for giving me the time to talk with you this morning.
As you all know, life has changed a lot in the last four years and being a banker is no longer a good place to be.
Many people are against the banking system, no more so than the customer.
In fact, we are challenged in all ways.
The regulators want more information, more transparency, more capital reserves, more control and more protection for the customer, which leads us all to see less profit and less bonuses.
We have modernised and refurbished branches that are beautiful …
... except that no one goes there anymore. They are empty because no one needs to visit a branch anymore.
Then we make it worse as we no longer see our customers in the branch, and then we completely lose the trust of our customers by trashing our relationship.
The bottom-line is that nothing is certain anymore.
The only thing we know for sure is that we have to change.
At this point, I was with him all the way. His points were made clearly and succinctly, with honesty and from the heart.
Then it all went wrong.
So here is our bank’s strategy to address these issues.
We are going to do several things.
First, we are going to be different by focusing on advisory services.
You just said you lost my trust, so why would I trust you to give me advice?
We will focus upon our branch network to deliver advisory services.
You just said the branches are empty, so why would I come into your branch for advice?
We will create a business that is wholly grounded on a customer centric sales culture.
A ‘customer centric sales culture’?
The fact is that the ‘sales culture’ is what caused PPI mis-selling, SWAPS mis-selling and much of the muppet based City culture.
So ‘a customer centric culture’ does not fit with the word ‘sales’, even though that’s what’s needed if you’re running a business.
And, bearing in mind that your strategy is based upon being an advisor, what you really need to be is a ‘trusted advisor’.
I recently wrote a paper about this for FImetrix, and it is clear that a trusted advisor thinks of my needs first, not selling me something.
In fact, a real trusted advisor focuses upon the long-term relationship and would avoid a short-term sale if it jeopardised the long-term relationship.
So what you really need is a ‘customer centric advisory culture’, NOT a ‘customer centric sales culture’.
We will focus upon sustainable customer benefits.
This banker then concluded his presentation with the principles they will use to restore trust.
We want to restore trust and to create fans, not customers, so we will create a bank that has a client centric orientation and values that are in synch with society.
All in all, a sobering presentation of the state of our industry and one that had lots of good content apart from that jarring piece about a ‘customer centric sales culture’.
Probably just lost in translation somewhere.
The is part one of a five-part series:
- Part One: One banker knows his industry is trashed, and here's his plan
- Part Two: Do banks need branches?
- Part Three: Why you really need a bank branch
- Part Four: Building a customer advisory bank
- Part Five: A truly social bank advisor is key