When saying it louder doesn’t help

In the space of three days, two friends reached out to share their bank-related woes.

Inefficient and inadequate systems and standardised processes are the reality within every bank

This is not unusual, and frankly it is strange that it doesn’t happen daily given what I do for a living… and what I spend my time speaking and writing about.

The two of them did not reach out about the same thing… I don’t even think they know each other. But they hilariously reached out to complain about the same bank. It doesn’t matter which one. It could have been any bank anywhere in the world.

The problems were familiar and, as a consumer, deeply frustrating.

The first one was Friend A needing to go into a branch to sign up for a new product. As an existing customer, they still needed to KYC him… but once they had done that and established his credentials… all the information they needed to onboard him for the new product was already in their system. Or should I say… in one of their systems.

But not the right one for the new product because current accounts and investments are different departments, innit.

So the person in-branch had two choices. To just ask him all the questions afresh and input the answers into the right system or copy/paste them herself all the while apologising profusely. 20 minutes later I got the email my friend had been typing while she was ensuring he had a good experience as a customer while he despaired in the experience she was having as an employee.

Now if you are a banker, this ‘swivel chair reconciliation’ approach is not unfamiliar. It is so common it even has a cute little name, right?

The second story will be equally familiar, by the way.

Friend B did not see the funny side in her experience. And she did not have good service. But she had a very common problem. She went into the branch for KYC and they asked for a whole host of documentation that they don’t actually need from her because she is exempt. It doesn’t matter why she is exempt. It matters that legally she is. And she is a lawyer, so you know. She knows things. Things such as this.

As it turned out, knowing things didn’t help.

My friend explained the situation, citing the relevant legislation chapter and verse to the unfriendly and unhelpful man in the branch, but he was having none of it.

Unlike Friend A’s experience, the person in-branch this time didn’t try to make the experience better. He did not try to find a way to solve the problem. The computer said no and he was done. My friend, Friend B, cajoled and pleaded and explained and shouted.

No dice.

She said what they were asking for was against the law.

Ah.

But is it?

It would be against the law to request less information than the regulator prescribes… and it would be against the law to retain more information than the law stipulates. But there is no law against standardising your own compliance for operational efficiency and asking for the same stuff across the board.

There is emergent regulation seeking to protect consumers from their data being… you know… all over the place. But there is also an implicit understanding by most central banks and prudential regulatory authorities that banks will create compliance regimes to cater to the mean. Sorry outliers. Today is not your day.

So the way we capture identity, say, doesn’t cater to witness protection (why I know this is a story for another time if you haven’t heard it already). Or to people who don’t have surnames (also a story for another time).

For such outliers, there are three options. We either create appropriate options… creating a separate process or set of rules and systems…

Or we demand that they solve for their outlier status themselves (go get yourself a surname, sir, then come back) or we don’t service them at all (and contrary to what many people assume… a financial institution can absolutely choose not to service you because you are politically exposed, because you represent a risk profile they don’t cater to or because you don’t fit in with the way they work).

In one case I’ve discussed recently, ‘refusal’ to serve was because my preferred spelling of my name and given name on my passport are not identical and therefore my paperwork has slight variations in the spelling. They gave me the option to go out and standardise all my paperwork and I didn’t take that option because there were other providers available to me. We both had a choice to make. Accommodating me was not the choice they made. And they were perfectly within their rights to do that, which is something we need to appreciate, sadly, when it comes to our service providers.

We have choices. So do they.

So Friend B is shouting about the law in righteous and absolutely understandable indignation.

And I am trying to explain to her that the law is not the issue here.

Internal compliance and governance is the issue. Her bank has simplified its life because… how many people like her are going to come into the branch? Right. So. The rules and processes and systems are designed for all the other ones.

Neither of those stories is surprising either as a customer or as a banker.

What was surprising to me was my own reaction.

Because I found myself… not defending as such. But explaining. Why we are in this situation. How this is neither incompetent nor sinister.

Just people constrained by rules they didn’t make and probably don’t fully understand, trying to get through the day. Some with more grace than others.

Systems that were the best available solution to a particular problem when they were chosen.

That doesn’t mean they were ever a perfect solution for any problem, let alone every problem. But if they are all you were given, they are all that you have.

Now me explaining all this didn’t help, in case you are wondering.

But neither does shouting. Despairing. Or switching banks.

Because inefficient and inadequate systems and standardised processes are the reality within every bank. And, before you ask for the manager or start writing a strongly worded letter… the management knows… and the regulator knows, too.

They are cutting corners, said Friend B.

Au contraire, actually. They are bulldozing the path to a blanket format for a standardised outcome.

No corners in sight.

But this is not accidental. They are not cutting corners and hoping they are not caught. They are demolishing the corners.

They are standardising for predictability and operational control. Risk management and cost management. And the regulator knows about the swivel chair systems integration (ahem) and the blanket compliance rules. They may not know the specifics, but they know what is happening and why.

And none of this will change if you shout louder.

Or if people see the light. They know. There is no light to be seen. They know.

They know the system is broken and the systems are inadequate and the rules… are self-referential. And they also know how to fix it. They know how to fix all of it.

But until this is the problem they have to spend time and money on, they have another million things to fix too, so get in line and hope that the person across the desk or at the other end of the phone is at least willing to help.

#LedaWrites

Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.

She is a recovering banker, lapsed academic and long-term resident of the banking ecosystem. 

Leda is also a published author – her first book, Bankers Like Us: Dispatches from an Industry in Transition, is available to order here.

All opinions are her own. You can’t have them – but you are welcome to debate and comment!

Follow Leda on X @LedaGlyptis and LinkedIn.