OPINION: British banks need to get personal

I was once based in New York City, where I exper­ienced the appall­ing treatment of cus­tomers that passed for ‘ser­vice' from Manhattan's banks. When I returned to London I vowed never to be nasty about British banks again.

But with each passing year it got harder to keep that promise. Time and again the banks would do something so crass, so short-sighted, and so politically inept, that even their friends despaired. Take the current backlash over penalty charges for unauthorised overdrafts (see News Analysis). Why are our banks so incapable of getting right their basic PR?

It is not that the comms departments are staffed by poor-quality people or under-resourced - far from it. It may be the case that senior management only see PR as a tap to turn on when they need to put out a fire, but that is not the whole story. The basic problem is that the top management of banks think they are running factories, where they apply their financial engineering expertise to manufacture financial products. Like engineers down the ages, they get so mesmerised by their cleverness and creativity that they forget to ask what the customer wants.

This comes out in two ways. Even with a UK-focused bank such as Lloyds TSB, the personal customer accounts for less than half the business. With Barc­lays, HSBC and NatWest, the personal custo­mer is, in pure profit terms, of very little impor­tan­ce. They make their money over­seas, from companies, and from capital market activities. So, inevit­ably, most man­age­ment time is spent where the profits lie.

Meanwhile, banks don't want to listen to complaints. I recall debating this with the then chair­man of a high-street bank a couple of years ago. I said the heavy-handed app­lication of money-launder­ing laws, the aggress­ive but incom­petent market­ing of credit, the charges on cash machines, and a host of other restric­tions, were seriou­sly dam­aging customer service. His reply was that this was all nonsense because customers had a great range of services to choose from.

The role of customers was to appreciate what the bank pro­duced, not to say they wanted something else.

Anthony Hilton is City commentator on London's Evening Standard

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