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How British Banks broke down.........Courtesy BBC Radio 4.....rvh precis.
In the good old days Bank Managers were conservative,traditional but they changed when some
bright spark advised Banks they had to be `efficient`and `profitable`.They foist products such as PPI,
personal protection insurance,and other cynical expensive products.
Then computers were used to automate and centralise data processing,previously carried out by
their branches.Then decision making was automated.....that`s when the trouble began because the
result was to distance Bankers from it`s customers.
It appeared to be logical and rational at the time but in hindsight centralisation was the problem
and Banks should have stuck to the business model they had that more or less worked.
The name of the game was to sell ``financial products``such as PPI and imposing tough targets on
branch staff in selling them.The targeting was harsh,severe,relentless leading to `casino `Banking
etc,etc.
In Germany we have all the highly computerised,highly centralised back office systems shared with
Banks all over Germany but most people use local banks in town.Banking is still face to face,without
targets and ``Bonuses``to divert staff from providing customers,business and personal with all
financial services.
Long term relationships result in quality lending and `less` defaults.The advantages of relationship
banking are widely recognised but British Banks work on a far more adversary model.
There is hope a Swedish Bank has 100 branches in Britain offering traditional relationship banking
to personal and business customers and due to the popularity of this ( old time ) model of Banking
to the British public and they are opening new branches every 10 days.
They offer basic banking with no targets or bonuses with face to face dealing and lending decisions
are made at the local branch.
Back to proper Banking again,slowly and without difficulty a form of Banking that may emerge which
benefits the British economy as a whole rather than just feeding on it.......
Fixing Britain's Broken Banks......via BBC Radio 4 website or download....