We are emerging from a period
where consumer confidence in the banking sector reached new lows. We
are seeing class-action suits filed for inappropriate overdraft
fees, credit card fees, and ATM fees; mishandled TARP loan
modifications; pension funds that are misleading about risks taken;
and the list goes on. Congress is currently grappling with “tougher
bank regulations,” both as a result of the near economic collapse
and the attention to “inappropriate fees.”
Where does
this leave banks and credit unions with regard to cleaning up the
financial system’s image and providing reasonable returns? Our
recent discussions with CFOs and COOs and our work in the industry
have led us to the conclusion that the remainder of 2010 and the
beginning of 2011 will be all about improving operating
efficiencies. What gains will be made on the revenue side will
result from improved effectiveness of new business processes and
practices. It is time to get back to a common sense approach to
developing market strategies and delivering products and services.
Where
should banks start? The key is to take time and effort out of the
new business process, which delivers the joint benefit of keeping
the transactions simpler for customers and freeing up time for the
new-business staff. Also, we see a more critical view of the service
channels, one that allows customers access to necessary information
in a self-service mode or through a simple bank staff contact.
Another opportunity for improvement will be restoring the
integration of channel alternatives for both service and sales. The
electronic delivery channels have offered this opportunity, and we
are now seeing innovations that make the delivery seamless.
The industry is in dire need of a public relations
campaign to win back the confidence of customers but making sure
that bank policies and practices follow common sense will be a
pre-requisite of such a campaign. There is no room for arguments
defending inappropriate fee practices, poor service delivery, or
fine print in selling products that customers do not need. It is
time to get back to using basic principles to design delivery that
you can be proud of. We see the next 18 months as a time to move
forward on the tangible improvements and let the regulatory
headlines and class-action suits take a back seat. 
