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Banks are Dumb

Recently, a representative for a bank was trying to get me to refer business to her. She and I corresponded back and forth and finally, I said, "I think banks are dumb." (I was referring to a specific incident where a bank could not qualify a client for a loan, but a mortgage broker got creative (in a good way) and advised the clients just what to do (sell a car to raise more cash for the down payment). We got a CalHFA loan and the clients are happily in their home. In that case, the bank did their automatic underwriting and rejected the client. There was absolutely no counseling the client as to how they might improve their qualification picture. So I made the comment to the bank rep trying to win my business that I think "banks are dumb."

But that is not the first time I have thought that. I actually have a phobia I have identified as "fear of banks," which is related totally to bank incompetence.

I first remember thinking banks are dumb several years ago when I was at a bank for what I thought of was regular business (I think I was opening a trust account for my grandson). I walked up to one of the desks on the side, explained what I wanted to do, and the "dumb" process began. The bank representative got up and walked from one end of the bank to the other. Slowly. Very slowly. I had witnessed this slow walking every time I had been in the bank and thought how utterly ridiculous it was. At this particular time (some ten or more years ago), there was not a computer to be seen in the bank. Being that the bank was smack in the heart of Silicon Valley, I couldn't help but think how absurd this omission was. The bank was all about standing, waiting, and the personnel walking from one end of the bank to the other whenever any business was to be conducted. The total systems incompetence infuriated me. I couldn't help but wonder about about consultant advice they must have just ignored.

I can really get myself whipped into a lather when I start thinkng about the archaic systems and the sheer arrogance of most banks to remain such dinosaurs . . . not to mention the fact that THEY ARE IN BUSINESS BECAUSE WE GIVE THEM OUR MONEY TO MANAGE! Every time I have to go into a bank to set up an account and am met with incompentence or a clueless attitude I know they have forgotten how they got into their super powerful positions.

Someone asked me last week what a good alternative to a bank is and I said "mattress," half jokingly. I seriously think corporate bank business needs to be reformed and needs to modernize and get a real clue that the ONLY reason they are in business is because WE GIVE THEM OUR MONEY TO USE!

Posted by Deborah Ryman, Realtor Beach Properties Santa Cruz County Vacation Homes on 06/29/2009 09:20 PM

Comments (23)

banks, dumb, dumb banks, banks are dumb

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23 Comments on Banks are Dumb

JUN

Hi Deborah, I can't disagree with you on that one, LOL.

If they are begging you for business tell them how much you want to work with them and ask for the contact information on an Asset Manager.

Aloha Deborah,

I couldn't agree more. Banks can have very strict programs that do not fall outside of the box. THey know what they know but it stops there. Their Loan Officer's are usually bound by their guideline's and do not have the flexibility of a LO working at a Brokerage. What they do have over us is a name that is recognized which for whatever reason gives comfort, When I'm competing with a Wells or a BOA and the subject comes up that the client is more comfortable with a name I think " when is the last time you went out for dinner with your Wells Fargo Rep?" In addition a Brokerage will 9 out of 10 times offer better rates as we get them wholesale not retail. It is the only way we would be able to stay in business. Lastly i don't know if you work with Va clients but the VA loan is the only loan out there that would allow for the seller to pay off some of the buyers debt. I just closed a VA transaction very similar to your where the seller not only paid for closing cost but paid off the balance on a $7000 car note. The VA loan is the only loan out there that allows for this. Mahalo and keep up the good work

Hey Andrea: Pray, tell, why?

Gene: Brilliant! I had never thought of that.

Hi Dave: Thank you so much for sharing the info about the VA loan. I love AR because I actually learn real stuff I can use - like tomorrow!

Ooops. I read Andrea's response that she disagreed. Sorry Andrea!

Banks aren't dumb. Some of their employees are. Banks have become the McDonald's of our industry, without the customer service.

So, Andy, why aren't banks dumb in your estimation? They are dinosaurs. Their systems stink. They are too big and too arrogant. They have forgotten why they are even in business. You don't take people's money and then not listen to what the people want and need.

I wouldn't say dumb - but difficult ... yes. He who has the money makes all the rules. I would not have thought that from 99 to 05, but they are making real rules now. We cannot change it so we make it our business to learn and understand that the requirements will not get any easier so we try harder to be better prepared on the next one.

Cathy: I said "dumb" because their business model is outdated. They have horrible, antiquated systems. They do not understand business or economics very well (generally speaking, of course). Their employees may be nice, but they are not sophisticated. They handle all of our resources. Shouldn't they be super smart, super responsive, super sophisticated? I shouldn't be able to criticize their systems for God's sake!

Why do they walk from one side of the bank to the other for everything except a standard deposit?

I can't figure out why anyone would argue with the premise that banks are dumb. Give some real reasons why they are not dumb if you don't think they are. Please!

Deborah,

It is interesting how we perceive the things. Look at real estate. In terms of dumbness Real Estate as an industry would beat banks 10 to one easy.

Call your own office from the sign, and see how long it would take them to find the listing, and the whole office might only have 70 listings. While the bank may have thousands of accounts. I called the Listing office today to arrange getting a key. I told them that I am looking for the key from unit 504 in Oceans One. After waiting and waiting and waiting, the lady could not find the record. She asked me about a bunch of different properties, but could not find this particular, one. Then she asked me for the address. Well, it is like living and working in New York and not knowing anything about Empire State Building, or Chrysler Building. Well, the lady did not know.

You think this is uncharacteristic? Try it yourself. Get into the buyers shoes and look at real estate with buyers (sellers) eyes. You might be up for a huge surprise. At least bankers are not mentioned in who people hate the most, while we are holding the dubious distinction of leading the pack, even beating used car salesmen.

I think we are all in it together, and none of us (individually or as an industry) is dumber than the other.

We are just patting ourselves on the back. Well, if it makes us feel better....

That will teach me to read to fast. I thought of it in terms of banks as lenders - not banks as banks. Yep.... dumb is still not my word - but difficult AND irritating fits very well. Thank you for the post and please accept by humble correction.

Jon: I did not make the observation to pat myself or anyone in the real estate industry on the back. I do happen to think we are smarter than the average bear, but I have never said that aloud before and I know many offices have antiquated systems. My current office is brilliant in their systems and I really notice that and appreciate it.

I mentioned banks in particular because they are so huge and so inefficient and they are using our money yet dictate to us. I don't like that. I think they COULD modernize. I think they COULD train their people. I think they COULD be more sophisticated and COULD respond more to their sophisticated customers. I KNOW they COULD update their systems if they really cared about customer service. I KNOW they COULD train their loan officers to be more than automated underwriters - but I don't mean that in the way of "creative underwriting," I mean it in the way of creative customer service. Actually seeing people as people and not automations.

Cathy: Dumb is the crude word that fits for me, but I accept your definition of difficult and irritating, as well. Thank you!

JUN

Deborah: Banks are far worse than dumb. There are a whole list of better words that could be used some of them also have just 4 letters. They hold our money then come up with ridiculous rules for not wanting to loan it out, and then meet with board members to decide on what foolish acquisitions should be made. Then when they see how much they have screwed up they cry for bail out money until they learn that they are going to be made accountable for the money, then they back off.

You won't get an argument from me on that, Ed. I wish I was around when banks first came into existence - I bet the dynamic was a whole lot different. I don't understand the power dynamic at all . . . we GIVE THEM OUR MONEY, THEN THEY TELL US WHAT TO DO? What is wrong with that picture? I am trying to envision a really progressive banking system - one that is smart and resourceful, and has respect for their customers.

Deborah: My experience is banks love to say the word "no". I heard about a guy who was recently fired from a bank. For years, he was a top commercial loan officer. The reason he was fired was because he hadn't made a loan for at least a year. There is always room for a bank that treats its customers sensibly and even occasionally says yes! Thanks for the post!

Find a Banker to LOVE:) When you find your"Banker Soul Mate", you shall find eternal happiness in life. Banking is a "scale" or "critical mass" business which of course can result in service issues. You can avoid this by depositing $20,000,000 cash and/or marketable securities with your favorite wealth management firm and you will see the level of service that you are looking for.

Don't Hate; Participate!

Deborah, I don't know if they are dumb or not but I can tell you they've certainly gotten rude and arrogant. I have savings accounts, checking accouts, IRA'S an CD's and two our of the three banks I use are downright RUDE in the last two years. Which leaves me to keep transferring.......

Is that what it takes, Thom? I guess I will never get good service.

And Carole, to me it is not good business or smart business to be arrogant and rude to customers. After awhile, there is nowhere left to transfer funds . . .

JUL

You need to rent "How To Rob A Bank" and watch it.

By the way, I don't know what phobia a "fear of banks" is, but fear of money is Chrometophobia or Chrematophobia.

AUG

Deborah,

I haven't gone into a bank in a a long time - maybe even a decade. Guess I might have to if I was opening an account but I suspect I could do that online too.!

Irene: Wow. I admire you! Seriously. I wish I could figure out how not to have to do business with banks! Or better yet . . . I have a fantasy that banks will come out of the dark ages and actually be innovative, professional, and SMART.

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