Are banks a ‘necessary evil’?

DraculaInteresting that, at the same time Finsec’s Better Banks campaign has identified that banking must have an element of community good, research in Britain shows three quarters of Britons would consider borrowing or lending through an online “social lending” community, rather than use their local bank. More than 60% said the main aim of their bank was “to make money for themselves,” while only 15% thought its main aim was to provide a good financial service to customers.

The study found that social lending was growing quickly in popularity, partly because of the increased transparency and “social connectedness” it offers. It is important to note that the study was commissioned by an online financial “exchange” company, Zopa, which competes directly with banks. However, if banks want to remain the preferred lending choice ahead of online social lending companies, like Zopa, they will ensure that customers feel welcomed and valued rather than fleeced.

According to the Guardian, Professor Michael Hulme, who carried out the study, said traditional banking emerged from the study as almost a “necessary evil“. He said: “For most people, banking does not provide any form of rewarding or valued experience, it is simply a necessity. In contrast, the community sites we looked at appeared to offer a much deeper appreciation of the individual far beyond the actual transaction.

Finsec believes that banks can turn around this perception that customers have of them by adopting a business model that favours investment over divestment. You can drive strong customer service and thus customer satisfaction by retaining and training experienced staff, reducing pressure to sell and reducing workloads on staff.

(thanks to the googly for the photo)


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