Banking Was Not Meant To Be A Transactional Business

When I was a boy, I enjoyed going to the bank with my father. We would walk into the small community bank and immediately be greeted by name. My father would say hello to each of the tellers and then walk back to the corner office to chat with the manager. I was never sure what they were talking about because I would generally stay behind and talk with the staff. The tellers would ask me how school was going and how my mom was doing. They seemed to know our entire family story. These visits left a big impression on me as I grew older and I knew banking was the career for me.

Fast forward 30 years, a lot has changed. No longer do you walk into a bank and get that personalized feel. The staff turnover is blatantly obvious as they try to sell you products that the previous staff had already unsuccessfully tried to push upon you. They read and try to comprehend incomplete notes others had inputted in the system on your financial profile. For many banks, the entire customer experience and sales process is broken. The most obvious proof is the recent Wells Fargo scandal. So what went wrong and how can this get fixed?

  • A new normal of understanding has to instilled into the DNA of the organization.

A former mentor and retired banking executive once told me, “Joe, always remember, every number on a report and every dollar on a balance sheet belongs to a person, a family, dreams, and failures. Don’t ever forget that.” He was right. If all you see are contests, incentives, stature, ego, and winning, then you have missed the point of the once noble banking industry. Banking executives have to lead from the top down to convey this message to every level of the organization, from front line employees to support staff. Everyone must be on the same page and understand what my former mentor so desperately tried to convey to me.

  • Compensation and Incentives for front line staff need to be reevaluated and turned upside down.

We live in a transactional world. Instant gratification is the norm. The proof is in the monthly, quarterly, and annual incentive programs. Banks must adopt new compensation and recognition programs that reward business growth, not transactional growth or widget production. Days where bankers are recognized for how many products they push upon customers should be completely removed, instead replaced with how many successful relationships they have acquired, retained, dreams fulfilled, and crisis’s averted. Are bankers’ efforts reflecting the values the bank? According to BAI, 81% of a bank’s opportunity cross-sell happens in the first 120 days; however, attrition can be as high as 50% in the first 90 days. What does this really tell us? Bankers are churning and burning through customers to basically get the “tick” marks to appear to be successful. They aren’t. Compensation and incentive overhaul is easier said than done, but the conversation needs to be taking place at every opportunity.

  • A new outlook on goals

Goals should obviously be aligned with business objectives but they also must reflect the values of the organization. Goal models are the norm, but are they an accurate reflection of what you are trying to achieve? When strategy is poorly aligned with goals, the door for inappropriate and unethical behavior opens wide. The model may say you need to reach “X”; however, if the strategy and infrastructure is not properly built, then teams may reach “X” by any means necessary. In essence, the opportunity needs to be available while the strategy and infrastructure must be in place for teams to achieve these goals. If any one of these components is lacking, business results will not be what you desire.

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