Drive revenue with CX

Financial services

Banks Make It Clear: We’re Sticking It To You With Fees

Harley Manning
Vice President, Research Director
July 6, 2012

An article in Boston.com highlighted the fact that many big banks still don’t understand what customer experience is or why it’s the biggest single driver of business success for most companies.  

Apparently Citigroup is about to join a “growing number of banks and credit unions” that have adopted some version of a one-page disclosure form. That form makes it easier for customers to see and understand fees.

Now don’t get me wrong: Making it easier to understand fees is a step forward. After all, ease of doing business is the second level of the customer experience pyramid and only slightly less important than meeting customer needs.

What has me shaking my head is the next part of the article. It says that these new summary pages come in response to complaints about rising fees, including fees that few customers knew about in the first place, like a fee for getting a paper statement and — my personal favorite — a fee for closing an account.   

A fee for closing an account? Really? I may be old-fashioned, but I’m used to paying people to perform a service for me, not paying them to stop performing a service for me.

Here’s why the whole “fee transparency” thing misses the point: Your bank really, really wants you to open more fee-generating accounts with it. When you add a savings account or CD to your checking account, or take out an auto loan or a home equity loan, you ring its cash register.

Do nuisance fees make you want to open more accounts with your bank? I think not. Do they make you want to keep the accounts you already have instead of moving business to one of your bank’s competitors? No. And as I pointed out in an earlier post, it’s far easier than ever to shift business to a growing number of big bank competitors.

How could banks get you to open more accounts? They could find ways to: better meet your needs, make it easier for you to conduct business with them (and not just by supplying a fee summary that puts a bandage on their 97-plus-page fee disclosure forms), and make it more enjoyable for you to do business with them.

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