The bank­ing shake-up


The Citizen (Gauteng) - - BUSINESS - Jerry Schuitema

The growth of tech­nol­ogy cre­ated self-help bank­ing.

Banks’ de­fault po­si­tion to fraud is counter-in­tu­itive to thor­ough foren­sic in­ves­ti­ga­tion in bring­ing per­pe­tra­tors to book. My gen­er­a­tion re­mem­bers with deep sad­ness the per­sonal touch bank­ing and fi­nan­cial ser­vices used to have – the easy ac­cess to au­thor­ity and in­sti­tu­tional cus­to­di­an­ship of your money.

This is largely counter-in­tu­itive to the growth of tech­nol­ogy, which cre­ated self­help bank­ing. Most SA banks un­til fairly didn’t recog­nise the deep nostal­gic void in “we gen­uinely care”.

Some have recog­nised that and are try­ing to en­sure in­no­va­tion doesn’t mean de­hu­man­i­sa­tion. Capitec de­lib­er­ately ad­dressed that void and has be­come SA’s largest bank in terms of clients.

Gone is any sem­blance of cus­to­di­an­ship of clients’ fi­nan­cial well-be­ing. Clients are held vir­tu­ally fully ac­count­able for manag­ing some­times com­plex, con­fus­ing ter­mi­nol­ogy and pro­cesses.

Crim­i­nals, how­ever not only fully un­der­stand the tech­nol­ogy, but clients’ emo­tional make-up and vul­ner­a­bil­i­ties far bet­ter than banks do.

Re­tail banks’ fu­ture suc­cess will de­pend largely on their abil­ity to in­ject a much big­ger scale of sound per­sonal re­la­tion­ships with clients.

One that’s ar­guably very far be­hind in this is Absa, hav­ing lost hun­dreds of thou­sands of ac­counts over the past few years. Much of what went wrong was cap­tured in Hilton Tar­rant’s re­cent Money­web ar­ti­cle “Absa: Here’s what’s wrong with its re­tail bank.” This caught my eye: “The prin­ci­pal chal­lenge for Absa is that most of this ‘strug­gle’ is in­ter­nal. Most of this change is ‘cul­tural’ and will need the bank to change from an ‘au­thor­i­ta­tive cul­ture’ al­most en­tirely re­liant on the ‘back-of­fice’, to a ‘mar­ket-fac­ing one de­fined by re­sults, learn­ing, en­joy­ment and car­ing’. Plus, the bank has al­ways been fo­cused on prod­ucts, not cus­tomers and their ac­tual needs.”

I re­cently had per­sonal in­sight into this. My Absa Credit card was cloned in Novem­ber and drained to its limit. My neigh­bour and oth­ers in this area re­cently had the same ex­pe­ri­ence.

In each case, the bank re­jected any li­a­bil­ity, cit­ing client dis­clo­sure of crit­i­cal in­for­ma­tion. Le­gally this may be true, but I found the au­to­matic re­vert­ing to fine print Ts&Cs, with­out ex­plor­ing highly rel­e­vant ex­ten­u­at­ing cir­cum­stances, as­ton­ish­ing. This robbed Absa of an op­por­tu­nity to un­der­stand its clients and crim­i­nals’ in­creas­ing so­phis­ti­ca­tion bet­ter and, to demon­strate gen­uine care.

It raises some is­sues that have emerged in this age of dig­i­tal tyranny. How­ever, I ac­cept that not all banks are the same, and the re­marks below may be some­what over-gen­er­alised.

In largely ab­ro­gat­ing their role as cus­to­di­ans of clients’ fi­nan­cial wel­fare, banks have ex­posed clients to in­or­di­nate risk, shoul­der­ing no risk them­selves.

Gen­er­ally, the in­dus­try doesn’t un­der­stand its clients well enough to ap­pre­ci­ate the emo­tional po­si­tion they’re put in and how a ‘rea­son­able per­son’ would re­act to such in­ci­dents.

They haven’t done enough to en­sure that clients are fully equipped to deal with highly so­phis­ti­cated crim­i­nals, be­yond their self-pre­serv­ing fine print T&Cs.

Not­with­stand­ing the mis­takes clients can make, the rou­tine re­sponse con­vert­ing clients from vic­tims to per­pe­tra­tors, while the real crim­i­nals go scot free, leaves one with a deep sense of in­jus­tice.

Our eco­nomic evo­lu­tion must find a way of em­brac­ing tech­nol­ogy with­out dis­rupt­ing healthy, em­pa­thetic hu­man re­la­tion­ships.

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