Cheques and balances

A couple of stories that I think reflect some of what is wrong with the banking industry and may have contributed to the financial current situation.

The first happened about eight years ago when we were changing our mortgage. We were sat in front of what looked like a typical bank manager - suit and tie, middle aged, male and more than slightly patronizing in attitude as he made us feel he was doing us a favour by loaning us money. He was sitting at a computer terminal asking us a series of questions and inputting the information into a database. It became clear that he wasn't too handy at using the system and it occurred to me that it wasn't him that wasn't him who was deciding if we could get the mortgage or not but the computer, or at least the database being driven by the computer. I found myself thinking it would be better if he stood to one side and let me input the data myself!

At the time I could see no reason not to cut him out of the process altogether but I later realised that I did actually want him to be a "real" bank manager. I wanted him to have known my Dad, known me from school days - known my circumstances in a way that would allow him to exercise judgement on my behalf and input experience into the system. I found myself disconcerted by the idea of a huge network of decisions being made based on centralised algorithms.

The second story happened on my current trip to Washington. I never use travelers cheques when traveling nor get money changed before I leave but instead rely on cash machines and credit cards when I get to my destination. You can imagine therefore my frustration when I arrived here to find that both my debit and credit cards had been cancelled by Barclays leaving me in the lurch. Call centre hell is bad enough at local or free phone rates but imagine it in a busy city, on a mobile phone long distance, listening to canned music for AGES just to be told that they had cancelled my cards because they had been used abroad! I appreciate that this was done at one level to protect my account but what happened to any sort of judgement? A quick glance at my statements would reveal how much travel I do and indicate that there wasn't a problem. What about a quick call at their expense rather than mine to check?

I often enthuse about the web's tendency to disinter-mediate but maybe the banking industry is one of those cases where good middle men DO add value and maybe more of them doing their jobs properly at all levels would have kept us out of the financial situation we currently find ourselves in.

Comments

[Adrian McEwen]

I think computer-based systems, as currently designed and implemented, do poorly at coping with non-standard cases. I remember reading an article arguing that we need some digital equivalent of margins - places you can add extra information that doesn't fit anywhere else, but that gets carried round the system so that whenever people are involved they can act upon it.

Of course, I too would've thought that your experience would be common enough not to fall into the extraordinary behaviour category with banks, but living in Italy for a year and using my UK bank account opened my eyes to that.

By the end I had the bank's security hotline number on speed-dial in my mobile phone and knew the script well enough to pre-empt their questions in order to get them to unblock my cashcard, because despite having my address as Turin and me using my cashcard almost exclusively in Turin, they'd still block my card on a roughly monthly basis...

[Dave Snowden]

The cancelled cards happens all the time Euan. Its not just being a broad, but if you do an usual pattern it will get picked up. I now carry three credit cards and always have enough cash for the next bill just in case. All backups get activiated maybe 4/5 times a year. I must admit Nat West are very fast on their international calls, fix the problem in seconds and I always thank them - prefer that to having to check things daily.

[Robert Paterson]

Your central question is THE issue - real banking has always managed its risk by "Knowing the client" - this means a person!!!! on both sides.

The fact that all risk got disconnected from this is as you say the core of why we are in this pickle.

By the way HSBC is in a league of its own in terms of its so called customer service

[Geoff]

A common problem I think. I now always carry, on my trips two sets of credit/debit cards all issued by different banks. One pair I keep in my rucksack/hotel room one set on me. This is after losing my cards in the USA on a rtw trip, spending the whole time in Australia chasing up Barclays!
I loved some ones blog where they asked criminals the one place they wouldn't search in a hotel room. The underwear with Nutella spread foiled them all!

[Dan Thornton]

Funnily enough this reminded me of actually entering my own details after my mortgage advisor began to struggle with his PC!

And the fact that he took a real interest in what was happening with every part of our search for a house actually meant he hassled one of the estate agents for possible houses - that hassle meant we saw the house we now own!

It's fairly simple - if there's no value added by someone, then particularly in a financial downturn, they're likely to be let go - whereas a bank manager who was able to sit and help me actually avoid late charges or manage my finances better would actually be a huge asset and talking point for a bank.