The banking shake-up
The growth of technology created self-help banking. NO PERSONAL TOUCH
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.