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Departments: First Word


A Change for the Better
If banks can improve customer service, is there hope for airlines?

by Scott Paton

If you’re a regular reader of this column, you know of my disdain for the state of customer service today. Last month I blasted the not-so-friendly skies of United Airlines. This month, I actually have something nice to say about an industry that I’ve long loathed: financial services, particularly banks.

I’ve often been mystified by the financial service industry’s seeming inability to provide decent customer service and earn a profit. For the last 20 years, banks have been closing branches and practicing such customer-unfriendly tactics as charging customers to speak to a real person, requiring customers to pay for checking and savings accounts, charging for access to ATMs and so on. On top of these ridiculous policies, banks have a reputation for treating employees poorly. Few tellers work full-time and most are low-paid. Yet many banks struggle to make a profit.

But I promised to say something nice. Although there are still a lot of really bad banks, the tide is starting to turn. Leading the pack is Washington Mutual, or “WaMu” as it’s known. Eschewing traditional banking practices of charging for checking accounts, making noncustomers pay for ATM access and even safe deposit boxes, vaults and guards, the bank has quickly become the seventh-largest financial institution and the No. 2 home loan lender, and increased its assets 180-fold since 1990. The Seattle-based company has taken a lesson from its neighbor Starbucks and made its “stores”--its term for branches--user-friendly, employing khaki-clad employees (most of whom come from a retail, not banking, background) and playing hip music.

Even more amazing for a bank, WaMu was named one of Fortune magazine’s best places to work this year. It’s no wonder, according to a recent Wall Street Journal article: Everyone at WaMu works on commission, from the branch manager on down. In his or her first year, a beginning teller can earn $50,000.

Fortunately, other banks are responding to WaMu’s growth in a customer-friendly manner. Banks have finally realized that people like interacting with other people. Sure ATMs are terrific and Internet access to your accounts saves tons of time, but most people still want to interact with another person when performing some transactions--especially when money is involved. WaMu’s branch or store network and its huge roster of home loans help it sell other profitable products like home equity loans.

Bank of America’s recent $43 billion acquisition of FleetBoston Financial Corp. is a sign of its renewed commitment to expanding its branch network. Bank One Corp. even sent hundreds of employees out into the streets of Chicago recently to invite potential customers to visit the bank.

If banks can recognize the importance of customer satisfaction, perhaps there’s hope for the airline industry. Maybe airlines could take a lesson from the banking industry to revitalize their demoralized employees and win back disenchanted customers: Stop forcing people to use electronic check-in kiosks, reward employees for outstanding performance (How about rewarding gate agents for filling seats instead of on-time departure?), quit charging customers with inane baggage fees and ticket-changing charges, simplify rate structures and serve decent food.

WaMu is building a better bank and winning customers. If the airline giants build better products, people might just fly them.