As the banking industry marches toward automation, one of its most challenging tasks will be to treat people as individuals, each one unique.
It will not be easy. Improving a bank's efficiency ratio involves making every action as low-cost as possible, but making people feel special is rarely cheap.
Being treated as an individual ranks among the top three wants of the U.S. banking customer. The other two are, respectively, getting problems solved promptly and gaining quick responses to requests (with a quick "no" appreciated more than a slow "yes").
There are always benefits to being individualistic that aren't easily quantified-that is, until you take away the individual. Take, for instance, what a commodity floor trader once told me when I asked him if he would prefer to do all his trading through a computer screen.
"Automated trading would kill my profits," he replied.
The reason, he said, was that he knows all the other traders' idiosyncrasies, things that couldn't be gleaned from a computer screen. He said that one fellow trader's left foot is always forward when he wants to buy, his right foot when he wants to sell. Knowing this gave the first trader an advantage.
Every community banker has many examples of how people must be treated as individuals and the ways in which character is far more important than any other factor in insuring debt repayment.
But look at what has happened to banking anyway. Not only are mortgage and consumer loans granted based on credit scoring, but large percentages of business loans at some banks now are being evaluated using computer models that spit out scores.
Sometimes, this is crazy. People involved in credit scoring tell me that some banks set a cutoff point of, say, 260 points, for mortgage approval. Those scoring 259 are just out of luck.
Let us hope that bankers who use credit scoring are not really so rigid and sure of their computers' evaluation skills.
Those involved in developing credit scoring stress that exceptions need to be built into the system for special cases, such as a couple in medical school who lack an earning record but whose credit rating is certain to improve following their graduation a few months hence.
The key, of course, is compromise. Some banks try to automate everything that the public does not see but maintain personal attention for everything people do see. That is why some bankers are so vehemently opposed to replacing branches with automated teller machines. Branch tellers can cross-sell other retail services and do far more than just conduct simple transactions.
Some bankers report that they are trying to carry water on both shoulders by building relationship histories that can personalize each customer even during an ATM transaction.
Technology is available so that, when a person puts his card in the ATM, it can respond:
"Hello, Mr. Schmidlap, would you like your usual packet of $350 in cash today?" or "Mr. Schmidlap, we know your birthday is next week. Congratulations."
Do you think this is silly? Just remember that the sweetest words most people hear or read are those surrounding their own names.
One item in this column that drew unusual attention was my story about the hotel that wanted to determine whether a guest had stayed there before so it could "welcome him back."
The hotel computer people said this would be almost impossible.
But the staff solved the problem by having the doorman ask, as each guest got out of a cab: "Have you stayed here before?" If the answer was "yes," the bellhop would tug his ear on setting the guest's bag at the front desk, and the receptionist would get the signal and say, "Welcome back."
Community bankers know that you don't feel as though you're dealing with Schmidlap National if you deal with Susan, Harry, or Lynn. Banks should treat their customers with a reciprocal individualized approach no matter how efficient their systems get.
