Why Assume Old-School Banking Is Old-Hat?

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I wanted to hold off on drawing conclusions from BankThink's ongoing What Bank Customers Want series until we heard from more people of different demographics. But Ron Shevlin forced my hand.

Shevlin, a senior analyst at Aite Group and a master provocateur on the Internet, seized on one post in the series – Katya Grishakova's "A Return to Old School Banking" – as an excuse to pull a Jetson

In a post on his Snarketing blog, Shevlin derides Grishakova's affinity for branch banking and other "traditional services," concluding:  

Amazingly, in less than 100 words, the author manages to distinguish herself from practically everyone in (what I'm guessing is) her age bracket.

My take: The views expressed by the author of this particular editorial do not reflect what 'bank customers want.'

Shevlin goes on to herald the era of "new school" banking, though it's never explicitly stated – at least in this particular blog post – what that model specifically entails. Based on his criticism of Grishakova, however, "new school" banking appears to involve never visiting a bank branch, oodles upon oodles of mobile/online banking services and a technological engagement component as a substitute for customer service. (Which, by the way, meh.)

More on Shevlin's fantasy in a moment, but first, a few notes on our series.

We launched "What Bank Customers Want" after noticing a divide among pundits regarding what is currently driving and what will inevitably determine customers' banking choices.

Each op-ed is admittedly anecdotal and not meant to represent the be-all-and-end-all of how customers collectively feel about banking. The aim, instead, is to solicit direct customer feedback that could, in the aggregate, point to trends, particularly among demographics, and supplement other research or oft-conflicting statistics on consumer sentiment towards banking. 

(Case in point regarding oft-conflicting statistics: This Journal article citing data on a record number of branch closures, published the same day as this Financial Brand article citing data purportedly debunking the myth of the branch's decline.) 

Something else which, based on the comments on Grishakova's piece, may have gotten lost in translation: Unlike our earlier Future Model of Banking series, contributors weren't asked to predict what the banking industry will look like five to 10 years from now.

Grishakova isn't analyzing trends. She's not approaching the op-ed as a banking/fintech expert (even though she used to work in finance). She's simply commenting on how she banks and how she would like to bank, under her ideal circumstances.

It's certainly possible, given her profile as a self-employed individual with brokerage or retirement accounts, that Grishakova is, as Shevlin suggests, an outlier. But, if one were to analyze the series as a whole thus far, it's clear that Grishakova is in good company with her affinity for old-fashioned brick-and-mortar banking. (In fact, only millennial Simon Zhen expressed a desire for better digital banking services.)

Baby Boomer Reginald Skowronski – who, yes, full disclosure, is my dad – longed for the days when branches had hostesses and wrote that still wanted his important transactions to start and end inside a branch. And, perhaps more notably, given their youth, none of the student contributors from Game Theory Academy, a financial literacy school in Oakland, Calif., extolled the virtues of mobile banking. (Six students from the school, ages 16 to 22, submitted opinions, three of which were published on BankThink and three of which can be found on Game Theory Academy's blog.)

Instead, each student expressed a desire for better customer service, particularly at the point of sale, and more direct communication about the financial services and products available to them. One student even described problems she had after opting for an e-banking account.  

Again, taken in isolation, the student editorials could potentially be written off as outliers. But their responses are squarely in line with research conducted by Lisa Servon, a professor at The New School for Social Research in New York, who worked four months as a teller at a check-cashing business in the South Bronx and three weeks at a payday lender in Oakland, Calif.      

Servon, as you may have already heard, found underserved demographics prefer to patronize alternate financial services providers that put a priority on establishing close, personal customer relationships. The model she describes resembles a traditional – dare I say, community – banking model on steroids, where firms woo "a million customers with one dollar" and build mutual trust via face-to-face interaction.

As previously stated, I'm bullish on mobile banking … circa, say, 2030, when the simple progression of time will have tipped the scales between customers who grew up with checkbooks and paper statements and those who grew up with iPhones and iPads.  

Our series certainly supports this notion and suggests that, right now, consumer sentiment regarding brick-and-mortar banking more closely resembles what Dave Martin outlined in his Future Model of Banking post. In this scenario, customers will pick the financial provider with the most conveniently located branch– or cell phone store or post office – even if they may never set foot inside. They just like to know it's there.

I'd argue some current big-bank strategies give credence to Martin's theory as well, as they appear designed largely to wean customers off branches. And why frontload fancy flagship stores with expensive technology designed to teach customers self-service if said customers were migrating to mobile banking all on their own?

None of this means definitively that banks should stop closing branches or start opening new ones. That decision will ultimately hinge on a bank's target audience. But it does point to opportunities for banks interested in certain demographics – such as say, the underserved – to innovate around the good old George Bailey banking model

As Martin writes:

Tomorrow's banking winners will be those who find ways to give customers personal touch points the most efficiently. In a technology-driven and commoditized industry, human interaction actually becomes more important than ever in differentiating from the pack.

And he's not the only pundit urging bankers to focus on customer touch points. In a recent BankThink post, Drew McMullen, financial services segment leader for the management consulting firm Sense Corp., argues a firm's success in the mortgage market hinges on personalized service, not automation. 

Finally, one semi-side note. In his post, Shevlin asserts "customers can't articulate what they really want from banks." Given banks' persistent reputational problems, it is dangerous for banks to assume they know what customers want better than the customers do.

Sure, most customers aren't familiar with industry buzzwords. Yes, they may even confuse their personal banker for a teller. And, of course, it's up to the bank – or the banker – to decide whether a particular customer segment is worth pursuing. Banking is a business, not a public service.

But it behooves the industry to consider that customers may choose to patronize a financial firm that gives them – and not tells them – what they want. Because with new competitors entering the financial services industry seemingly every day, a good number of these folks may choose to take their business elsewhere.

Jeanine Skowronski is the deputy editor of BankThink. You can contact her at or follow her at Twitter @JeanineSko.

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