What Should Banks Be Telling Their Customers?

Opinion  Research Corporation issued a press release highlighting the results of a survey it recently conducted. According to the release:

“Nearly half of those surveyed (46%) said the bank in which they have the most assets was not communicating with them enough. Mutual funds fared slightly better than banks, with 42 percent of respondents that hold the majority of assets there expressing disappointment in the level of communication from their provider.  Brokerage firms appeared to be doing the best job of keeping their customers informed, with sixty-two percent of respondents that hold the majority of assets there indicating that the level of communication has been good.”

My take: Look on the bright side: A majority of those surveyed (54%) did say that their banks was communicating with them enough. And nearly six in ten respondents said their mutual fund provider was doing a good job of communicating.

The problem here is that we have nothing to compare this to. In normal times, how many consumers think that their bank communicates with them enough? And how do we define “communicate” in this regard? Are blatant marketing messages considered “communication”?

Elizabeth Glagowski of 1to1 magazine was right on with her comment on the 1:1 blog:

“At this point, even a simple mass email or direct mail piece to reassure (or prepare) customers would definitely go a long way. am a customer of many financial institutions. Only one has sent me any type of communication explaining its role in the financial landscape. It really made a difference to me as a customer.”

I did a quick check of the largest banks’ Web sites to see if any had posted a message online. The result: Only a few have posted anything. One example: Wells Fargo.

It’s a shame that few banks have established a blog — each day brings new news (is that redundant?) that is great blog fodder for banks to communicate with their customers about.

It’s too late for banks to start a blog now (for the purpose of communicating about the crisis, not in general). But it’s not too late for them to put up a message on their Web sites (especially with nearly of some banks’ customers coming online to check account balances or pay bills on a regular basis).

Not to take WF to task here, but I would suggest writing a letter a little different from what it published. My suggestion would be to publish a letter that talked a little more about the situation itself. Help customers understand how the industry got into this situation in the first place, why other banks are having trouble and — this is the tricky part — how to know whether or not they should pull their money out of the other banks they do business with.

This last part is the one that most banks will struggle with. With some firms running full-page ads touting their newly superior rates, it leaves one consumer (me) with the impression that they’re vultures picking over the newly killed. Banks have got to recognize that few customers put all their eggs in one basket (or bank), and that consumers have a lot of reasons for doing so. It would be nice for my bank to assure me that the piddly amount of money I putin a CD with the bank across the street from them (which was opened because it offered me a better rate for the next 6 months than my primary bank did) is OK to keep there.

The end result of this financial crisis is not going to be the consolidation of accounts with the banks left standing. It’s going to be the opposite — further dispersion of assets across institutions. We Boomers are already of the mindset that we would never have all of our accounts with one bank. This crisis is going to lead a lot Gen Yers and Xers to feel the same way.

So what should banks be telling their customers? The answer is simple: The truth. The truth about what’s going on in the industry, and what customers should do about it (that’s best for the customer, and not necessarily the bank).

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