A Change for the Better
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
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.