About 50 years back or more, you could safely say that banks had all the power in their relationship with you. With limited competition and the additional hassle of moving your funds from one bank to another, banks didn’t have the concern of bad customer service leading to a loss of clients. It is safe to say that that has changed today.
Banks today cannot afford to be complacent. The relationships with clients, forged over a long period of time, is under threat from exciting and hassle-free FinTech startups and service providers. Many banks have had an issue of unnecessary regulatory or otherwise procedures. Even for the simple issue of single a car loan, many banks make you go through tedious amounts of documentation.
While documentation alone is not a problem, considering that banks purely want to keep you aware of all conditions and disclaimers, the vocabulary or jargon present in such documentations aren’t particularly comprehensible. In addition, terms and conditions that aren’t especially favourable to clients are printed in minuscule font sizes so as to speed up the process.
To keep it short, customer-friendliness or customer-centricity is not something banks have been historically known for. Procedures and bank interests have taken importance over client interests. For example, a simple thing such as overseas fund transfer would cost a bomb to execute. Due to a lack of alternative, banks didn’t feel a need to justify such fees.
However, a couple of decades back, thing slowly started to change. With the advent of the internet and the emergence of Elon Musk’s companies such as x.com and PayPal in the 90’s, consumers started becoming aware of alternatives to traditional financial institutions. These platforms, especially PayPal, offered transparency and simplicity, two aspects that were not at all a part of finance.
Now, of course, the consumer has risen to the top of the priority ladder in finance, much like in any other sector. Banks have to keep up, or risk getting obsolete.