5 things I learnt from working in a bank during the financial crisis…
I remember being at a wedding just before the financial crisis hit. There were eight of us on the table, two I knew and five I’d never met, sharing normal conversation about the wine, the weather, and the wedding dress. As we went round introducing ourselves, the talk turned to careers.
My friend sat next to me shared what he did — and uber-cool job in digital marketing. Stoney faces from the mixed-age crowd. Then it was my turn — a real life bank manager with keys to the safe, a queue at the till, and slightly difficult-to-comprehend opening hours. Much to my surprise, it seems that money really does talk, or at least inspires conversation. The next half-hour was spent discussing interest rates, mortgage payments, and why I didn’t look like Captain Mainwaring.
The years in which the world’s financial system turned itself upside down were hard for many people — both customers, and the huge number of ordinary people who worked in banking at the time, of which I was one. But as the (many) sayings go, you learn the most from difficult situations. Here’s what I discovered about human nature during those turbulent times…
- Perception is reality (and some people really do believe in a big evil invisible man)
I worked with some of the nicest, most caring, and most honest people I’ve ever met. These were people who’d worked in banking for their whole lives, knew the names of almost every customer that came through the door, and were paid a normal, respectable amount for what they did.
Yet when the crisis hit, the million-or-so people who worked in financial services got thrown into the same big pot, seen as multi-millionaire, big bonus bankers who were supposedly at the heart of the interest-rate-rigging collapse, forced to defend their profession to everyone who had an opinion, or at least who had read the papers that morning.
At its height, there was even a craze of bar staff being paid by journalists to take photocopies of receipts of anyone they suspected of working in a bank. I could never fathom why three lemonades and some Thai Sweet Chilli crisps served in a bar in Berkshire would be of particular interest.
The exceptions to this were the regular visitors to the branch who liked to talk to us about ‘them’ — telling us how much they loved ‘us’, our branch, our people, what we did and how we did it, but hated the people behind us in the background, pulling the puppet strings and making us dance to their evil tune.
Having moved to Head Office after my time in the branches, I can confirm, perhaps with some disappointment, that there is no big dark bunker that exists where everyone sits around with a white cat on their laps. Or at least, if there was, I wasn’t invited in…
2. We all suffer from overconfidence (and the rules don’t apply to us)
For a short while after the Northern Rock collapse, people stopped being interested in savings rates. They wanted safety and security for their money — which, of course, is what a bank’s primary job is. People had realised that some things were too good to be true (such as Martin Lewis’ helpful advice for everyone to put their money in surprisingly high-rate Icelandic Saving Accounts). But it didn’t take long for that initial feeling to subside, and people were moving money around again, accepting higher risk to get higher rates.
I was amazed at how quickly people started asking me to lend them money that was going to stretch them too far, given that many of the well-publicised problems were caused by banks over-lending to people. Whilst people seemed to accept this as a bad thing overall, lots of customers still wanted to be the exception to the new rule. They were confident that they could afford the repayments where others couldn’t, that their job was safe, that their bonus would definitely be paid.
Of course, once you see our inherent overconfidence, you can’t un-see it — just ask any group of people if they think they’re a below-average driver, and see how many readily say yes…
3. Customer loyalty is a myth (and not just in banking)
The word loyalty conjures up images of sticking together through thick and thin, rallying round during the tough times and still being together on the other side.
However, for many customers during the crisis, the very opposite was true. As soon as they felt their savings might be at risk they did something about it, ignoring the promises of protection and moving their money to other banks or a safe mattress somewhere. The companies they’d trusted before had stopped being useful, stopped being able to deliver on their promises, and therefore were discarded as quickly as a cheque could be cleared (four days, if you’re wondering…)
You only need to look at another casualty of the recession, Woolworths, to see that this is true across industries. For all the retro reminiscing and sorry-to-see-you-go headlines, customers weren’t queueing up outside to donate money, hoping to save their childhood sweetshop from being slain. Woolworths had simply stopped being useful, and so their customers went elsewhere without a moment’s hesitation…
4. Social Norming is real (and drives people do crazy things)
Money is a hugely emotional subject for everyone, and a big part of my job was to deal with customers who might be angry, upset, and in real need of help. But when the crisis hit, something changed.
It was as if people had been given permission to suspend their personalities upon entering a bank branch, in the same way people turn into crazed pushing machines when they get within 5 meters of a London Underground train. On one particularly feisty occasion, a customer refused to allow me to leave the room we were in for over an hour unless I agreed to increase his overdraft. After repeatedly trying to phone the press to get them to cover his story, he only decided to leave with the promise that he’d be waiting for me outside after work…
I even had one occasion when a customer asked to see me to complain about our choice of (largely inoffensive) music being played in the banking hall. He only calmed down once we discussed what kind of music he liked. Having told me it was classical, I was delighted to let him know that we played some at 9.30am every morning. And from then on, it was the only time of day we saw him…
5. The biggest failing in banking is a lack of understanding (and it impacts everybody, all the time)
Of everything that I learnt during the financial crisis, and in fact during my whole time in banking, one thing stood out more than most:
As a population, we are woefully ill-prepared for managing our money.
When to save, when to spend, how to borrow and how to budget, when to buy property and when to sell, who to speak to for impartial advice. The vast majority of people struggle with these questions every single day, and the financial crisis magnified this lack of preparation to a devastating level. People had no idea what to do or where to turn, not knowing what the right decision was or whose opinion they should trust. And it’s those memories of genuine distress and confusion that stay most vivid in my memory.
The complexities of banking have turned people’s money — and therefore to an extent, their lives — into a game, when really the whole system should be set up to help everyone just do the best they can with what they’ve got. Money remains the main cause of worry and stress for the majority of people, and understandably so given the emotional impact it has, being intertwined with every element of our lives.
So of all the lessons I learnt, this is the one that needs the most action, immediately, whether that be from banks, schools, or government. Without it, people will continue to have their own financial crises on a far-too-frequent basis.
Thank you for reading this article, I really hope you enjoyed it. If you did, I’d love you to subscribe to my blog at johnjsills.com/subscribe for infrequent thoughts about customer experience and future trend, or find me on twitter @johnJsills.
