JCL Blog

Bank Shopping

Lately I have been shopping for a new bank.  The last time I did this was about seven years ago.  The comparison of the things I consider important in the decision says a lot about how fast our world is changing.

in 2003 my number one criterion was personal service.  I was leaving a large bank's private banking group where I had been for ten years or more.  The service had been amazing, and probably very expensive for the bank.  At that time the service took a noticeable turn for the worse; so either the bank had decided not to continue to invest in amazing service, or not to continue to invest in me as a customer.  Either way I was leaving in search of a replacement.  I also wanted my new bank to have online banking -- this was a Yes/No thing -- either the bank had it or it did not. 

Now my number one measure is online banking, second is security which is closely related on online banking, and third is branch locations, and customer service is fourth.  

Online Banking and Security

We all now know that all online banking experiences are not the same.  We also all know that everyone  "has online banking".  We have also been exposed to many online banking systems as our credit card companies have changed hands.  From this alone, I was able to try out the Bank of America online system because of my Alaska Airlines Visa card, the Chase online system because of my Amazon Visa card, and the US Bank online system because of my Travel Perks Visa card.  This demonstrated that all online experiences are not the same.  

Here is where security comes in.  I want my online banking to be secure.  I also want to be able to use it.  If the security measures are so extreme that I can't understand them -- or cannot get them to work -- that is a problem.  If they are too easy -- then I have to wonder when the Russians are going to get into my account.  I am sure security is a very hard thing to do well.  The measure is simple though.  If I can get in -- then I can use the system.  If not -- not.  

It was over security that I eliminated US Bank for the simple reason that it could never remember my machine -- and made me re-enter my extra security information every time.  I probably would have been OK with this -- after all I can remember 2 passwords and 2 makes it more secure.  But they put that check box about remembering this computer -- so I was trained to expect a better experience and they did not deliver.  There were other smaller functionality things that pushed them out the door.

It was over functionality that I eliminated Bank of America.  Their online banking system is like their bank.  A conglomeration of acquired units that really don't work all that well together.  The checking account group is different from the credit card group, every state is different, business and personal are different fiefdoms.  What a mess.  If you ever get on the phone with someone to help -- it is always the wrong person.  In addition, some parts of the online experience just don't work and without explanation.  At Bank of America it seems that online dysfunction follows real life dysfunction.  Not for me.

So Chase was left standing and I still had not graduated past my first two factors.  

Branches -- Really?

These are modern times, we do most of our banking online, so why do branches matter?  Two reasons:  kids and travel.  I want to teach my kids about banking and I want to do so by walking into a branch with their cash and handing it over the counter.  It is unlikely that they are going to be getting direct deposit of their allowance anytime soon.  

It is true that ATM cards work everywhere and should take care of any banking need that could occur while traveling.  However, being able to walk into a branch anywhere and have my issue addressed is still important to me.  Whether I need to get cash, notarize something, send a wire, get my credit card turned back on -- it seems like these days travel equals credit card suspension-- or exchange currencies, I want a large branch network.

People -- Still Make a Difference

So I opened an account to try it out.  After all, you never really know until you experience it first hand.  The people at Chase were great.  They even gave me their cards with direct phone numbers on them.  They got me all set up and were eager to win other business from me.  A very good experience.  Someone who knows what is important is running that company.

Business Lessons Learned

The business lessons that were reinforced for me through this experience were:

  1. Partnerships matter:  The only banks I evaluated were ones I had been introduced to through the bank's credit card partners.  
  2. Be careful of the Y/N:  Many bank executives probably still think of online banking as something they have. (i.e "We have that").  New innovations tend to get adopted in that way.  The difference in quality is important.  Having a car is different than having a BMW.
  3. People Still Matter:  Customer service fell to number four on my list because my expectations had dropped so far that I was not inclined to make a decision based on it.  I don't think I would be a satisfied customer if I had signed up at Chase and had a bad in person experience.  And I definitely would not be writing this blog post

Truth in Banker Speak

The advertising industry has benefited significantly from Bank of America's ad budget.  It is hard to imagine a human in North America that does not know about Bank of America's 1.5 trillion dollar pledge.  

I have to wonder if anyone is going to track what this means or if they do it.  

Here is a link to a page on the B of A website with a April 28, 2008 transcript of remarks at the Federal Reserve Public Hearing on the proposed merger between Bank of America and Countrywide Financial Corporation where Liam McGee, President, Global Consumer & Small Business Banking, Andrew Plepler, President, Bank of America Charitable Foundation, and Janet Lamkin, California State President outlined their intentions. 

It is a little long, with each of the three of them taking turns saying the same thing over and over.  Here are the basic details quoted from Liam McGee's part of the transcript:

I am proud to announce Bank of America’s new, and unprecedented, 10-year goal of $1.5 trillion for community development lending and investments. This is the largest community development goal ever by any company in America. In coming years, this goal is certain to enhance quality of life for millions of Americans in need, by:

• helping finance construction of affordable housing throughout the nation,

• providing loans and other needed capital to small businesses,

• supplying consumer loans, including housing finance, for low- and moderate-income and minority borrowers, and

• financing economic development for communities in need.

In addition, our Charitable Foundation is raising its philanthropic giving goal from $1.5 billion to $2 billion over 10 years. This is the most ambitious long-term corporate philanthropic goal ever announced by any company. We are setting this goal despite uncertain economic times.

I am glad that B of A has made a large commitment to community development.  This list however is just a list of things that bankers do.  So the advertisements saying that Bank of America is giving 1.5 trillion dollars back to the community are a little misleading.

Even so, a search on the B of A website for press releases about community reinvestment produced this from November of 2009:  (dramatic music here) 1 billion dollars!  Some simple math tells us that a 10 year campaign starting in April of 2008 is 20 months into its 120 month life or 16% complete.  I am pretty sure that 1.5 trillion is 1,500 billions.  So 1 billion is .067% of goal.  It appears that Bank of America is REALLY going to have to get after this in the remaining 100 months.

Has anyone seen any news items digging into this?  According to CNNMoney we have given B of A 15 billion dollars in bail out money.  

Even with the diminished capacity of the newspapers to do investigative work, this has got to be worth looking in to.