Relationship banking is a concept that was birthed in the early 1980’s. The concept was simple, use newly minted technology in the branch to identify better and more highly valued customers in order to deliver a superior level of service to those people. IBM, NCR and others who supplied much of the banking machines in the retail branches had introduced the means to capture the full banking relationship of an individual customer and present a capsulized summary to tellers and platform personnel.
Over the past 5 years or so, Relationship Banking has to be more closely associated with programs that award points not only for credit card usage, but for a full array of retail loan and deposit products. Citi ThankYou, PNC Points, Banco Popular Premia, and Regions Relationship Banking are examples of this style of “bank coalition loyalty”.
My experience at the drive-thru the other day made me question which form of consumer bank marketing would be more effective. A kind family member had given me a check for my birthday and I pulled up to the drive-thru to cash it. When the teller asked if I had an account at the bank, I replied “no”. She responded by telling me that there was a $5 charge for cashing checks for non-account holders.
I knew the threat of Durbin Amendment passage was worrisome to the banking industry and that debit card rewards and free checking accounts were already disappearing. But this?
If the teller had taken time to look at the account the tiny little birthday check was drawn against, they would have noticed that the account was long in tenure and high in value. Very little additional searching would have connected the dots that 3 other people of the same surname in my family had their primary bank relationships with the bank. If a 1980’s style relationship banking construct was in place, the teller could have told me that “there is normally a charge for check cashing, but she was glad to make an exception on my behalf”.
If the teller was really plugged in, they could have offered to open an account for me, linking it to the group and affording me a new set of benefits.
Alas, as banks too often do, policy was followed to the letter with no guiding light from business intelligence as facilitated by technology.
If retail bankers would return to the basic concepts that were at the foundation of now-complex relationship banking programs, customers would find delight in daily transactions and might even develop true brand preference and loyalty for their local bank.
