Banks. Can’t live with them. Can’t blow them up (apparently). Few companies are so disliked as the major banks, historically and currently. Now there is a reason for that. And it’s not all the banks fault. The service they offer can have huge impact on people’s lives, and people will get really disappointed when they don’t get what they want. Banks also  have to follow strict regulations on how they conduct their business. I requires capital, and security beyond what most other companies have to deal with.

But, banks are in the service industry. And as much as we can empathise with the challenges of running a bank (especially in these disruptive times), they are the only ones who can address the issues. But they seem to have no idea what to do. And the lack of customer-centricity, digital transformation and general use of common sense is mind-boggling. Here’s and industry that’s being disrupted on a daily basis, from peer-to-peer payments, via crowd-lending to global transfers, investments, etc., etc. There’s hardly a single business area the banks are in that isn’t being challenged by a fintech startup. And it is not going to slow down.

The banks are desperately trying to catch up, either by establishing innovation hubs, or by acquiring fintechs (and mostly shutting them down). And there is no doubt that banks need to get a better grasp of technology and innovation – but they are missing the chance to start at the most important area – their customers. 

Banks have something that the startups don’t. They have a (fairly) stable customer base. They have hundreds of thousands or millions of customers. But they have been taking them for granted (and for a ride) for hundreds of years. They have made money on every end of every transaction, and had the gall to charge fees on top to do that. 

And they are continuing to hope that disruptive startups like Transferwise etc. don’t succeed winning substantial business. Abraham Lincoln said; “You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.”. But the banks seem adamant at trying. Luckily, history shows that consumers catch up. It may not happen today, but unless the banks do something drastic with their customer service, people will walk away. It’s no wonder the dystopian TV show “Mr. Robot” has a villain company that runs banks and credit cards called “E Corp” – usually nicknamed EvilCorp.

The banks know something is going on (or at least customer facing staff members do). But up the ranks, there almost seems like they have distain for their customers. Every customer interaction is a chance to win, keep or lose a customer. So why aren’t the banks doing something (other than marketing), to actually fix the problem? To help their customers, to create a great experience for every customer who walks in, no matter who they are? It’s baffling, and it marks the point of final decline for banking as we know it. 

They have every opportunity to do something, combining technology and great customer interactions. It’s merely a question of willingness to transform their business – technologically as well as culturally, and they will probably have to get outside help to do so. In a very interesting article, Kiwi Creative Director, Vaughn Davis, argues that AI technology will kill off the bank brands. I agree, but I think their atrocious customer service will expedite the death of the industry. Powered perhaps by Kodak-esque cockiness, they seem to believe that they can do whatever they like.

It’s like the banks are the crew on the Titanic. They can see the iceberg, but they have no clue on how to avoid it, so they go full steam ahead, instead of getting their heads together to figure out the problem. And that strategy will only result in one thing – a sinking ship.

There are notable exceptions, where banks actually treat their customers right. Mostly in smaller regional banks, but some major national banks do as well. It would be beneficial for all – banks, customers, governments, other industries if the banks survived and contributed value to society. But if they keep on this path, they may not be around for much longer.

Erik Ingvoldstad is the Founder & CEO of Acoustic.
Follow Erik on Twitter @ingvoldSTAR, follow Acoustic at @AcousticGroupSG
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