How Does Your Bank Feel About You?
In yesterday’s blog post, we discussed how people feel about the financial institutions they work with. It’s easy to determine the mood of consumers through surveys, but how can you know where you stand with your financial institutions? Of course they all say that they have the best interests of their customers in mind. But actions do speak louder than words, and the actions the banks, insurance companies, and brokerage firms that you work with can tell you a lot about whether they’re more concerned about you or about their bottom line.
The bottom line is important, and institutions need to be profitable to continue to operate and keep shareholders happy. Most institutions are struggling to return to profitability, but some are taking those struggles out on their customer base. There are several areas to watch for to get an idea of how your financial institution feels about its customers:
Fees: Fee revenue has always been important to financial institutions, but some are increasing fees to offset losses in other areas to the detriment of their customers. Some companies have added new fees, such as penalties for too much activity, too little activity, or a failure to maintain a minimum balance. Others are simply playing hardball with customers, less willing to forgive fees or extend grace periods than they used to be. Customers don’t like to be nickel and dimed by financial institutions, but many are counting on fees to solidify their financial position.
Service: Many financial institutions have had to cut back dramatically on personnel in an effort to cut costs. Unfortunately, reducing employees can also have a negative impact on customer service standards. Customers are experiencing longer lines, greater periods of time spent on hold when calling for help, and generally dealing with employees that are under more stress than usual. As banks and other institutions continue to adjust to change, those with good customer service will stand out above their peers.
Lending: It’s one of the basic building blocks of many financial institutions, but many aren’t willing to discuss new loans or the refinancing of old loans with their customers. With unemployment on the rise and homeowners struggling to make payments, many are looking for solutions with lenders. Some are willing to work with borrowers and are helping people to take advantage of lower interest rates. Others have essentially frozen their lending operations, clearly worrying more about protecting their earnings than assisting their customers.
Financial institutions have been through a serious storm over the past several months and many have not survived. Where they go from here depends on many factors, but few are more important than the way they treat their customers.
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