Opportunities in banking…

I was flying on Friday and so got the chance to read the FT and thought Christopher Johnson’s editorial piece on the virtues of people and branches in retail banking a good read:

Much of the blame can be laid at the door of “customer services”, that amorphous tentacular monster that spawns in a global hyperspace disconnected from both banks and their customers. Banks claim to have cut costs by taking operations out of their branches into customer services, but the level of service has been cut even more. Banks are like hospitals. The more you cut nursing staff to save money, the less service you can give patients.

Banks have made it almost impossible to use branches. With great difficulty I discovered the name and telephone number of my branch manager, only to find that a letter I wrote to her had been intercepted by “customer services”, who passed it to her a couple of weeks after deciding that they could not deal with it – nor could she, incidentally.

Building societies once used branches more than banks. But one former building society asked me to deal with three different branches in the course of a year, after shutting the first, then the second, under pressure from its banking parent.

Banks still have about 10,000 branches in the UK. Many are threatened with closure because of mergers, but they will not be so easy to turn into bars in the present property market. Now is the time for our banking behemoths to go back to basics by revitalising their branch networks with real, identifiable people as managers who can offer advice as well as good service to customers.

Clearly there is an enormous opportunity to get this right, using a judicious and creative combination of technology, entertainment and design. And people are at the heart of that equation.

Regular readers might just now be falling off their chairs: “But isn’t the Park Paradigm all about a world of progressive and innovative application of technology?!? What’s this people-centric business model endorsement doing here…” I’m exaggerating of course but I thought this article was a great excuse to reiterate and clarify my strong ideas on the importance of people in many (most) areas of financial services and that my clarion call for an enlightened and progressive embrace of the wonderful opportunities opened to us by exponential advances in technology was almost always grounded in the thesis that it would allow smart, creative finance professionals to offer better, faster, cheaper, more relevant solutions and products to their customers.

Call it hubris – I’ve never worked in retail financial services before – but I am certain that with a blank canvas and by collaborating with various clever innovators in the space, I could build a new kind of retail financial services experience that would beat the pants off most of the mainstream high street banks. In fact, I would guess that the most difficult competitive factor to overcome would be to economically create a sufficiently dense/convenient network of stores, but even here there are a number of potentially creative / non-traditional approaches that may work. It might sound crazy given what has happened in the last 12 months or so, but I’m pretty sure there has never been a better time to start a new bank in the UK. Not top of the agenda for me at the moment, but something I’d love to get involved in before I hang up my spurs. I’m putting it on the list.

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