By RICHARD B. KELSKY
For as long as I can remember, people have complained to me about banks. Being a large bank groupie, I have always defended them. I still do. But my thinking has evolved to recognize that some of the complaints I used to dismiss may be well-founded.
I began this journey by realizing that my viewpoint was influenced by my unique realities: (1) I am accustomed to preferred treatment, (2) I have never paid a bank fee, (3) I don’t borrow money, (4) I don’t carry credit card balances, and (5) I don’t use banks for small-scale and walk-in financial services typically provided by a neighborhood financial service center.
That said, I recently had an epiphany: (1) Banks are essentially incapable of delivering small-scale and walk-in financial services, and (2) people who live paycheck-to-paycheck (or thereabouts) can become victims in a bank.
So, here I am, in a small town, needing a $100 gift card. Sounds like a no-brainer, huh? Guess again.
Let me begin by telling you that I stupidly passed up buying that card at the checkout counter of the convenience store where I was getting lunch. All it would have taken was selecting the correct card off a rack and handing the clerk the cash. There would have been no conversation, no interrogation, no attempts to make me feel like a criminal or an idiot.
But I, being a genius, decided to go to a bank — a major bank — to get the card. After all, I have had an account there for more than 10 years, so it would be easy.
I walk in and quietly join the line. By the way, there is absolutely no reason for that line. It only exists because it is moving forward at a snail’s pace – if it is moving at all. Many bank employees are milling about behind the counter, and more are wandering the lobby, but only two are actually waiting on customers.
It immediately occurred to me that people stand on line in banks as if they have no right to expect or demand better service.
Watching the interactions with the tellers, I observed that the customers must accept being ignored, treated as if their time is valueless, treated as if they are stupid, treated as if they are trying to cheat the bank, treated as if they are anything but a customer.
That is, of course, unless they come in frequently, the bank employee knows that they have a lot of money in the bank, or their kids go to the same school.
I tell myself that I can handle the wait. I actually visualize getting to the counter, handing the bank teller $105, and getting the card and my change in only a minute once I reach the window — if I ever reach the window.
Minutes pass, and I eventually get to the front of the line. Almost done —not.
The Indignities Begin
With $105 in my hand, my lunch sitting on the floor, I politely ask for a $100 gift card.
The immediate response (spoken in the loud and scolding tone of a school principal from the 1950s who has just caught a pupil in the hall without a pass) is: “Do you have an account here?” I responded in a quiet tone, “Yes.” Do you have an ID? I again quietly responded, “Yes.” I hand over my driver’s license.
The teller walks to a computer terminal on the other side of the floor. After a few minutes of feverish typing, the teller returns and tells me that they cannot find me in their system.
Just to remind you, (1) I am trying to buy a $100 gift card for cash, and (2) I am an authorized signer on several accounts in this bank.
She then asks, “May I have your Social Security Number?” (Which she feels the need to shout to the entire branch as if to announce “I’ve caught another criminal.”).
Not wishing to announce my Social Security Number, and finding her inability to locate me in their system somewhat annoying — if not scary — I tell her “absolutely not,” and ask for the manager.
I end up with a more senior teller because the branch manager is out to lunch. After all, why should there be any on-site management at a branch of a major bank?
“What is the name of your company?” she asked. In a quiet tone, I told her.
Have you guessed what happened next? After a while, she told me, “I cannot find that company in our system.” By this point, I felt like Jean Valjean in Les Miserables. The silent alarms have been activated, and Inspector Javert will walk through the door at any minute.
And the Actual Retail Price Is …
I protested that that was impossible, but the insanity persisted. After another few minutes the senior teller was talking to me like I was trying to trick the bank into committing the capital offense of selling me a $100 gift card.
By the way, I still had no idea what the bank charge was for that card. They keep that a secret, because you are supposed to pay anything they ask you to pay (if they decide to grant you permission to pay).
A server in a fast-food restaurant has to tell you how many calories are in a Big-Burger with cheese, but bank fees and charges are a matter of national security.
One Heck of a Computer System
I then dug through my wallet and found a card for the account. I handed it to the senior teller, who after another minute, finally found the account. After 10 minutes of putting me into an orange jumpsuit and leg shackles, for the entire branch to see, she announced, “Ha, ha, ha, ha, you see, if I don’t type in the name of the company with the exact spaces and ‘Inc.’ exactly the right way, I can’t look it up.”
Can you imagine how they check the OFAC/SDN list? I can’t.
Never mind. I just need the gift card. She tells me that it will be $103.95 (by the way, that’s 3.95 percent for the privilege of their taking my cash and handing me a card, which is more than twice the permitted check cashing rate in New York and an effective APR of something close to infinity).
I hand her the money, she takes another minute at the computer, and to make change, and hands me the change and the card.
The only reason that I survived this experience was because (1) I am able to defend myself, (2) I don’t have a “lunch hour,” and (3) I don’t give a damn about my relationship with this bank.
Many people are not in the same position.
Most of you know me. My hair is less than traditional, and if you catch me heading to the farm, my clothes may be as far from Fashion Week (except maybe Ralph Lauren) as they can get.
And that’s who I was when I went to the bank for the gift card. Just an ordinary person seeking walk-in financial services. For many people, that’s who they are 24/7. And visualizing them brought me to my epiphany.
When you are insulated from a paycheck-to-paycheck life, it is hard for you to understand the vital role played by Financial Service Providers. If you qualify for a home mortgage, or an overdraft or business line-of-credit, have too much cash to keep in your mattress, and don’t need walk-in financial services, banks are a good place for you. But they may not be a good place for everyone.
1. Banks are essentially incapable of delivering small-scale financial services.
They can’t provide them quickly.
They can’t provide them economically.
They work through disconnected employees.
Their average customer is just a number.
They cannot manage real-time risk (heck, they may not be able to look up an account).
They charge more for ancillary services.
They don’t want to serve people on a walk-in basis.
They cannot deal with anything that does not conform to their world.
2. Ordinary people can be victims in a bank environment.
If I act like an ordinary person, I get treated poorly.
If I have little money, I get treated poorly.
If I dress down, I get treated poorly.
If I don’t know enough to say “no” or “enough is enough,” I get treated poorly.
If I don’t have an account, I get treated poorly.
If I have an account but don’t produce enough fees, I get treated poorly.
If I don’t produce enough fees, I get charged more fees.
Banks cannot handle the transactions required by the portion of our society that banks don’t want to serve in the first place — they just pretend to because it is politically correct.
Part of that political correctness is to attack those who actually do it well, and to support banks who pretend to be making services available to the so-called “unbanked.” (They even created the name “unbanked,” because it implies a lack of something other people have and can’t live without.)
In reality, while television ads make banks look great, obtaining everyday financial services at a bank can be expensive and difficult.
Financial Service Providers actually understand their customers and care about them.
FSPs want to provide services, rather building roadblocks to access. FSPs want ongoing relationships, formed on good customer experiences. FSPs are willing to provide financial services that banks cannot, are unwilling to, or are unable to provide efficiently or economically. All with an amazing transparency — and, in most states, Financial Service Providers are regulated, subject to government audit and rates set by law.
Richard Kelsky is president of TellerMetrix, a provider of POS transaction, compliance, interface, electronic deposit and marketing software to check cashers, payday lenders and retail banks. He is also a New York and Connecticut Bar member, a Polytechnic Institute of NYU and NY Law School grad, a Certified Anti-Money Laundering Specialist and a frequent lecturer on business, legal, compliance, and technology issues. He can be reached at: firstname.lastname@example.org. This article is an expression of opinion by the author and not of any entity or organization.