Most personal bankers will create “package deals” including products like, checking, savings online banking, overdraft protection, credit card etc.  Regardless if a customers need or USES the service it’s too bad it’s a package deal.  In other words,

“Which value meal deal would you like today?”

Most banks incent their personal bankers to sell as many services as possible to customers at account opening.  The thought behind this is the more services a customer uses the harder and less likely it is for customers to leave.  Remember the operative word here is USE.

Customer Concern + Product Feature + Bridge + Benefit = Sale.  This is probably very familiar to any sales person out there.  Too many times have I seen personal bankers jump right over the bridge and benefit and ignore the customers’ concerns all together.

How would you like  it if you went to your doctor and said you’ve had a headache for a week.  The doctor looks at you and pulls out 2 tylenol, 2 ibuprofen, 2 aspirin and says “This should work  I’ll call you if I think of something else”.  You’d probably look for a new doctor.  I’d at least want my doctor to ask me about my symptoms and take a more holistic approach.  If we expect this from our doctor we should expect this type of approach from our financial professionals as well.  Doctors take care of your physical health bankers take care of your financial health.

I understand and support the strategy more services = more sales = sticky relationship.  But it should be presented with real benefits to each individual customer.  I expect my bankers to ask customers about their current and past banking relationships, their current finances, their investment style, future plans, etc.  This helps them identify areas where our services can fit and benefit the customer.  So a typical conversation would sound like this:

Mr. Customer based on what you’ve told me you want to “concern”, I recommend “service” because it does “feature” which can help you with “benefit”.

This approach improves the number of services we sell and more importantly benefits the client in some way.  It takes us from an order taker to trusted adviser.

So ask yourself is my personal banker an order taker or an adviser?

Unfortunately with all the bad press surrounding overdraft fees for ATM/transactions opting in for this service at your bank has taken on a negative connotation.

So what is changing?

Recent regulatory changes will impact how your Bank can charge overdraft fees for ATM and everyday debit card transactions for all personal accounts (business accounts are not affected).

In the past, if you did not have sufficient funds in your account, your Bank could, at its discretion, pay these ATM and everyday debit card transactions and assess an overdraft fee as part of its debit card overdraft protection service.

Effective August 15, 2010, unless your bank gets your permission, you will lose the convenience of of this service for your ATM and everyday debit card  transactions and assess applicable overdraft fees.

How does this effect you the consumer?

Well really it doesn’t effect you if you opt in to the service.  If you opt out you may avoid losing money in possible fees.  But what are you really avoiding here.  Let’s take a look at some scenarios.

Scenario 1 – Mary has opted in and attempts a debit card purchase that exceeds her available balance.

Mary Johnson and her family live paycheck to paycheck.  Because she and her husband both have debit cards (and because her husband sometimes forgets to tell her about his debit card transactions), she occasionally overdraws her account.  In the past, her bank has paid some of her debit card transactions as a courtesy to her and charged an overdraft fee the following day.

Although Mary is never happy with the fee, she is usually grateful that the transactions were approved as one time she was purchasing groceries for her daughter’s birthday dinner and another time she was paying for her mother’s medications.

It is now August 20th, five days since the new regulation went into effect.  Mary is paying for her mother’s medication and is unaware that her husband made a large ATM withdrawal this morning.  The amount of the pharmacy transaction is $125.50.  Mary’s checking account available balance is currently $36.50.

Mary leaves the pharmacy with the medication.  Her account available balance will be  overdrawn by $89.00.

Scenario 2 – Oscar opted out and attempts a debit card purchase that exceeds his available balance.

Oscar Smith does not balance his checking account and regularly overdraws his account.  In the past, his bank has paid some of his checks, ACH transactions, debit card transactions, and ATM withdrawals as a courtesy and charged overdraft fees the following day.

Oscar is very upset at the amount of OD and NSF fees he has been charged.  He decided to not sign up , to avoid any additional overdraft fees resulting from ATM and everyday debit card transactions.

It is now August 20th, five days since the regulatory changes went into effect.  Oscar has found a new suit for a job interview the following day.  The amount of the clothing transaction is $191.80.  Oscar’s checking account available balance is currently $175.50.

Because Oscar opted out of Debit Card Overdraft Protection, here is how the transaction authorization will proceed.

The merchant will advise Oscar that the transaction was declined.  Oscar decides to contact the Bank to ask why the transaction was declined.  There are no fees charged because the transaction was not approved.

Conclusion

I myself can relate to both scenarios and although I hate paying the fees it some times is a life saver to have these transactions go through for one reason or another.

I know some of you are thinking “I never overdraw my account I’m very careful with my money!”  You’re right a majority of people never even use this service but let’s remember Murphy’s Law “Anything that can go wrong, will go wrong”.  You can never tell when this law will take effect.  What if something goes wrong with your car and your using your debit card to pay for the repairs.  What you don’t know is your mortgage was mistakenly debited twice from your account.  This leaves you $10 to pay for a $150 repair.  Wouldn’t you want the transaction to be approved.  If you opt out it won’t.

The big question is why wouldn’t you opt in to this service?  The good news is that it is free until you use it.

This week our markets continued to zigzag reacting to more headlines in Europe.  The U.S. dollar benefited greatly  from the trouncing of the Euro.  The Euro fell to its lowest level against the dollar in 4 years after Germany unexpectedly announced a temporary ban on naked short selling in a move to calm the financial markets.   We will continue to keep our eyes on Europe in the
coming weeks as it is clear that the decisions being made by governments around the world have a controlling grip on the outcome of our markets.

Treasuries rallied this week as the sovereign debt crisis in Europe continues to weigh on credit risk, and the significant exodus from everything that is not U.S. government debt continues.  The 10-year note yield dropped 22 basis points this week to 3.23 percent, after briefly touching 3.12 percent.  The yield on the 2-year note finished the week at 0.75 percent for a weekly decline of 3 basis
points.  The yield on the 30-year bond fell 25 basis points this week 4.09 percent, after briefly falling below the 4 percent mark.

After reaching 2010 highs less than a month ago, U.S. stocks have been on a rough ride with major indexes erasing their 2010 gains this week.  The Dow Jones Industrial Average plunged 376 points on Thursday, followed by a swift 125 point gain in Friday’s session.  Be that as it may, the Dow was down 425.99 points for the week.  The Standard and Poor’s 500 Index lost 47.99 points for the week and the NASDAQ was down 117.81 points, a brutal 5 percent.  All three major indexes are now down for the year.  The one certainty is to expect more of the same volatility next week.

In contrast we’ve all been to places where the staff was vibrant and happy.  A business where the people treated you like royalty.  How did that make you feel?  My guess is you’ll love to go back there and probably become a regular customer.

The difference between these businesses isn’t as great as you think.  Sometimes all it takes is a smile, a warm greeting and just a little bit of friendliness to turn any business into an example of great customer service.  So if it’s so easy why don’t all businesses do it?  The problem stems from the top.  If an owner or manager doesn’t smile or greet and treat everyone warmly why should their employees?

We as owners and managers forget just how great our influence is over those we employ.  Our people emulate our actions and pick up on our “aura”.  If we give off bad vibes so will  our staff.  If we have positive energy it becomes contagious.  For example, I make it a point every morning to open the branch doors, smile, greet and welcome customers into the bank.  I ‘ll do this for a good 20 – 30 minutes everyday.  This has a tremendous effect on my staff and starts everyone off on the right foot.  Because they see me do it, they automatically do the same throughout the day.

Having positive energy will help you be a good leader. You’ll pass on this energy to those you are with.  Having a team of people with positive energy in abundance is a marvelous thing. When others see your positive energy, that energy will be contagious and spread to them. People will be inspired by you as you maintain positive energy and confidence.

Commitment to California, Focus on Relationship Banking Enable Bank of the West to Distinguish Itself Yet Again in J.D. Power and Associates Study of Retail Bank Customers

San Francisco, Calif.  –  April 22,  2010 — Bank of the West ranked highest in customer satisfaction among retail banks in California by J.D. Power and Associates – the third year in a row that Bank of the West has received this award in the region.

Bank of the West garnered the highest ranking customer satisfaction score of 782, which was 43 index points above the industry average of 739 in California.

“Receiving the highest ranking in our region from J.D. Power and Associates for the third year in a row is a demonstration of our employees’ unwavering commitment to service. We are very pleased that our customers value our kind of  relationship banking,” said Michael Shepherd, Chairman and CEO of Bank of the West. “We’ve been serving Californians for over 135 years and we are honored by their business and their recommendations of Bank of the West to their neighbors.”

The survey asked customers to rate their banks in six categories: account activities, account information, facility, fees, problem resolution, and product offerings. This comprehensive view into customer attitudes and the high ratings given to Bank of the West, underscore our customers’ appreciation for a bank that provides sincere, personalized service. Customers gave Bank of the West particularly high marks on account activities, account information and fees.

All of our employees, whether in our branches  or in the back office, do a fantastic job of taking care of our customers every day. We know people value the high-quality, personal service they receive at Bank of the West, and  that is reflected in our strong growth in
households and core deposits,” said Andy Harmening, Senior Executive Vice President, Regional Banking Group. “Dedication to outstanding customer service does not ebb and flow with economic cycles. Ranking highest in customer satisfaction three years in a row is a demonstration of our strong commitment to our customers.”

The rankings, published today by J.D. Power and Associates of Westlake, Calif., reflect the results of surveys conducted with more than 47,673 banking customers nationally.  Now in its fifth year, the study finds that overall satisfaction of retail banking customers averages 748 on 1,000-point scale in 2010-a slight decrease from 749 in 2009. Additional information about the study and its methodology can be found at  http://businesscenter.jdpower.com/news/pressrelease.aspx?ID=20100