You may also find interesting
Are Retail Customers Still The Banks' Focus?
I recently read an article about a town in Staffordshire that has no free ATMs or cash machines left in its centre, meaning that people must drive to the next town for ready money or pay 95p to withdraw funds.
I wondered what the thought process behind this is from a bank point of view and reached the conclusion that it all comes down to cost. Strangely, the banks pay us next to nothing for the deposits that we willingly part with in good faith; they lend those deposits from which they make a margin.They currently offer us very little in the way of interest, although offer us a high degree of certainty that it will be returned with schemes like the FSCS deposit protection, which I alluded to in a previous note.
Banks want to make themselves more efficient, much like any business does, but is that strive for efficiency at the expense of their customers' needs?
This leads me to the subject of alternative finance and why the industry came about. The modern day financial company does not have high street branches and produces easy to use products supported by modern technology, all aimed at giving the customer a great experience. Traditional financial services companies are now selling their expensive assets such as high street branches which although raises valuable money, makes the customer’s life more difficult.
Bank bashing is not really the point here – they are hugely powerful institutions that can move large amounts of capital almost at will, and very efficiently. What they are often accused of is a lack of agility at the customer level, and I believe the new players in the space have made the user experience top of their list of priorities.
Like many of our colleagues in the industry, we have taken advantage and developed what we believe to be straightforward investment products that aim to put the user experience right at the top of the list.