Why You Shouldn’t Dump Your Brick-and-Mortar Bank
By Geoff Williams
Here are three ways human interaction is beneficial in banking.
Banking is now a hermit’s dream. If you want, you can bank and never encounter a human being.
Even if you don’t join an online bank, you can easily avoid other people while using a bank with brick-and-mortar branches. In fact, it’s never been easier to do so, thanks to the long-dependable automatic deposit and the advent of smartphone deposits and online services such as PayPal.com and Google Wallet to transfer money to another bank account.
Banks have designed it this way.
“Over the past two decades, banks have worked incredibly hard to remove people from their lobbies by driving them to automated banking channels,” says Kelly Brown, managing partner of the American Deposit Management Company, a treasury management and financial services company that works with more than 600 financial institutions throughout the country.
Some banks have “pushed [customers] even farther by charging them for the use of a teller or lobby-related activities,” she adds.
Is this distance all it’s cracked up to be? Should you switch to an exclusively online bank? Before you become a complete bank recluse, there are several arguments for sticking with the old-fashioned approach of human-to-human interaction – even when you don’t have to. Here are three.
If you are prone to collecting bank fees. Do you get the occasional overdraft fee? Or maybe it isn’t occasional. Maybe sometimes you check your balance only to find utter carnage, with fees galore, courtesy of one unexpected payment going through and numerous planned charges clearing as well.
If you have any hope of a getting those fees waived, it helps if you actually visit your bank sometimes, especially if the staff has come to know you. Not that a relationship with your bank’s staff will necessarily save you, and this isn’t to say you can’t get fees dismissed if you belong to an online-only bank. But it stands to reason that if you get to know your bank’s employees, and they get to know you, you’ll have a better shot at receiving mercy than a fellow consumer who is a stranger to them.
If you’re likely to need a loan. If the bank manager knows your name and has a sense of your character, that may be the edge you need when it comes to getting approved, particularly if you aren’t an elite banking customer and you have a few dings on your report.
But even if you are an elite banking customer and are likely to be approved no matter what, there are advantages to working with people, says Mark Guay, an attorney with his own law firm in Newburyport, Massachusetts.
He does a lot of banking with his brick-and-mortar institution and believes it’s crazy for consumers to abandon the human element of banking.
“Great banking should be relationship-based, not transactional only,” Guay says, explaining that when he goes to his bank for a business or personal loan, he’ll find a point person to work with, so, as he puts it, “I can deputize that person to make sure the loan happens,” and that whomever he is working with can take “ownership of that loan.”
He hasn’t had the same luck trying to get loans via the online route. Guay says he recently tried getting a loan through a bank that has branches but predominantly operates online.
“One minute I was talking to someone in Florida, and then someone in another department in another state, and I was just pushed from person to person,” Guay says. “I was in phone purgatory.”
He says he likes many aspects of online and mobile banking. “Internet banking is good in less complex matters,” Guay says, but when it comes to more thorny problems, like nailing down a big loan, “in my experience, dealing with a person in an organization is far more effective in getting the job done.”
If you value having informed professionals at your disposal. Most banking is pretty basic. You need money, and you take it out of your account. You want to pay a bill, and so you do. But if you have loans with your banks, you might have questions about home equity lines of credit or what type of individual retirement account you need. You may appreciate calling on a human sounding board – and not having to work everything out on your own.
Still, a lot of your opinions about banks and how you feel about interacting with banking technology probably come down to your age, says John Oxford, spokesman for Renasant Bank, headquartered in Tupelo, Mississippi.
His bank’s customer surveys have revealed that, “millennials, for the most part, don’t see the need for anything other than a digital banking experience and look at human dealings with banks as a hassle, whereas baby boomers and up still really crave that relationship-style banking and having a live person to deal with face to face.”
Oxford thinks all of the generations probably have a point. “Are we losing something from not having that human connection? Yes and no,” Oxford says. “We do lose a lot of the personal trust and having someone you can visit that can answer questions and knows his or her client. However, you are also gaining time in your day by being able to do almost anything from an Internet-enabled device. For now … clients want both.”
But it isn’t that customers have necessarily clamored for online and mobile banking. Brown says that all of these services, which make consumers more self-sufficient, were designed to make us like our banks more.
“Banks believed that if they offered products to customers that were all self-service, it would deepen the relationship, thus making it harder for them to leave,” she says. “Additionally, the banks listened to the myriad of consultants telling them that Generation X and Y didn’t want to use the branches for their banking needs.”
Everyone’s personality and banking needs are different, and it may be that you really are better off bypassing your bank branch and even exclusively banking online.
But if you have a branch that’s conveniently located near you, it never hurts to start learning your bank tellers’ names, and for them to learn yours. Sure, you save time by skipping an in-person visit, and perhaps money in gas or teller fees. However, in the long run, if you’re a banking hermit, you may be paying a higher price than you think.
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