Bank Clients Want Service, Not Services

Your friendly banker has been ballyhooing a vast range of new services in recent years, trying to compete for customers in an era of deregulation. Now comes a study that suggests that most bank customers don’t care much about all those services. What they want a bank for is to keep their money safe.

It’s hardly the message most bankers like to hear. With lots of branch offices already in place, they’d like very much to find more ways to do business with all that foot traffic. Yet some of them have already discovered that it’s best to keep their new activities well out of the way of the traditional retail banking function.

The study, by professors Robert O. Metzger of USC and Sukhen Dey of Indiana University, found that more than 85% of retail customers surveyed had absolutely no interest in any new non-banking products or services developed by their primary bank. What most of them wanted instead was more personal banking service, a reaction to the impersonal automated teller machines.

Metzger and Dey, both of whom are consultants to the banking industry, surveyed the holders of 4,500 retail accounts of more than $1,000 at a West Coast community bank. Even this relatively affluent group--the bank’s average retail customer had an income in excess of $60,000--showed little interest in such services as tax preparation, discount brokerage and insurance. Only 1% wanted tax preparation, for instance, and only 13% discount brokerage.

Apparently, customers simply don’t believe that after years of just being bankers, bank personnel are going to have sudden expertise in some of these other areas.

The study also found that bankers’ hours are archaic considering today’s society. More than half of those surveyed were in two-career families, complicating the task of getting a family member free to go to the bank between 10 a.m. and 3 p.m.

What was most important to the customers? In descending order, accuracy, quality of overall service, friendliness of the staff and speed of the teller lines. Personal service ranked well above the level of interest rates paid on deposits as an attraction (not too surprising, considering that rates often don’t vary much among major banking institutions).

Such views don’t come as a shock to some banking experts. “People sort of look at a bank as a place for putting money in,” says Robert L. Thaler, executive vice president for planning and marketing at Security Pacific National Bank. Taking money out has a certain negative connotation for customers, he adds.

Automated teller machines are popular because of convenience and off-hours availability. But there’s a bit of psychology involved as well, according to Thaler. They allow customers a way to take money out without anybody else knowing about it. Making a deposit, on the other hand, is something customers are more likely to want to do at a teller’s window.

People visualize banks as they did when they were growing up. Deregulation has been too recent to change that, Thaler says. Customers resent getting bombarded with credit cards, even though they don’t hesitate to use them. And if a bank starts “cluttering up its branches” with non-traditional services, it alienates them.

Hence, Security Pacific offers its other services through separate offices, by phone and other forms of contact rather than through its existing retail outlets. Thaler believes it’s the only safe course. That doesn’t mean the services don’t contribute to bank profits. It’s just that the branches aren’t all that important in the process.

The problem for the banking industry, of course, is that even before deregulation, many non-banking institutions had managed to get a toe-hold in banking services. Hence the rush to offer one-stop financial services, an effort that’s likely to continue.

What the survey suggests, however, is that it’s swimming upstream in doing so; that there’s still a strong feeling in this country that bankers are bankers and should remain so. Instead of one-stop financial services, what customers want is service.