For several years now, consumers have been slowly migrating from global banks to regional and community banks and to credit unions as well. Sure, the credit card business has stayed behind–for now. But excessive fees, impersonal service (or no service whatsoever) and overall disregard for adding value to customers were driving folks out the door–already.
Biting the hand that feeds you
But then along comes our whopper recession, which it just so happens was triggered in large part by big bank greed. The banks need bailing out–with public funds. But then they turn around and screw credit card holders with sudden interest rate increases and instant reductions in available credit–targeting the very same folks whose tax money is keeping them afloat. Oh, and then big bank CEOs start wining about having any conditions placed on these gifts of public money. Conditions like using the money for what it’s intended for–lending. Plus they’re especially resistant to giving up any of their outlandish compensation packages, which only bank execs can’t see are outlandish.
What are consumers thinking about big bank behavior? “#$%^&*(@!#$%^&*!!!.” Cleaned up and interpreted, consumers are outraged.
But a better question is, “What the hell are the big bankers thinking?”
Big bankers breathing their own fumes
Tell you what; these guys are breathing their own fumes. They’re so insulated from public opinion–plus so uncaring about what customers think–they just assume they can jack customers around all they want, and customers will just come back for more. There’s actually an acronym for this: “BOHICA.” If you don’t know what it stands for, I’m not gonna tell ya’. At least not here.
These bankers think: “People gotta bank. We’re a bank. A great big bank. So we’ll get more than our share of consumer business.” End of consumer business model. And the beginning of the end of consumer business, at least at current levels.
The beginning of the end
Certainly, some customers will stay with mega-banks no matter what. But as far as winning back overall consumer trust? Not a prayer. Big Banks can’t win back trust without fundamentally changing their consumer business model–as in adding value to consumers before they add value back to the bank. Instead of: “Give us your business because it’s good for our business.”
I strongly suspect that the much-discussed makeover of our banking system will not only occur from the top (government) down. It’s also going to happen from the bottom (consumers) up. Consumers and small business now see big banks for what they are. It’s like these emperors have no clothes and are wearing barrels instead. Can’t you just see it? Mr. cantankerous John Lewis, CEO of B of A, wearing nothing but a barrel? Uuuglyyy.
The migration will continue. But at a faster pace.
Postscript: just thought about this. Why didn’t any one of these big banks come out and say, “We’re not going to unfairly raise rates on our loyal customers. Nor will we arbitrarily shut down small business credit lines on customers. We made a mess, and it’s up to us to clean it up, not up to our customers?”
What a powerful branding and relationship-building opportunity slipped away–unnoticed by all. Customers would line up in the streets to switch their business. Like the proverbial ships leaving sinking rats.
