from the hip

The US believes itself to be a - or perhaps even the most - technologically advanced country in the world. This is a myth, blatantly false. Internet usage, Internet speed, mobile telephone use, Internet phone speeds, and so on, are all among the many areas where the US is increasingly lagging behind the most advanced countries in the world. So is banking and financial services.

I am astonished by the lack of efficiency and the poor customer service of American banks. Here are some real life stories that really shock me, from banks that are all among the top 5 US banks. Here are the cases:

1. Electronic transfer between two customers in the same bank

A friend transferred 1200 dollar to my account. In Scandinavia, the money would have been on my account instantly, as it is a within-bank transaction. Here the bank took 24 to take the money out of my friends’ account, then printed a check and mailed it to me. So, 3 days instead of instantaneously. And unnecessary paper and mail service and postage, all of which, I am sure, customers pay for.

2. Electronic transfer between banks

I paid for something using Paypal. And there wasn’t enough money in my Paypal account, so Paypal withdrew money from my banking account, as they should. However, it took 4 days for this to be processed by the bank. Again, I guess, a check. In Scandinavia this would have taken 1-4 hours, as it is an interbank transfer.

3. Deposit lost by the bank

A friend of mine deposited 800 dollars in her bank. She got a receipt. After a few days she noticed the money weren’t there. She calls the bank. They could not find the deposit, but would investigate. Six weeks 5 long calls, talking usually to two or more people each time, she finally gets the 800 into her account. Now she finds that in two separate cases the bank had given her overdraft fees of 35 dollars that she would not have gotten had the money been where they should. Again she calls. Two calls later the fees are dropped. During this ordeal, the bank never contacted her - she always had to initiate contact.

Now - how it is possible to lose a deposit? How is it possible to not honor a customer’s receipt immediately? Why didn’t be bank get back to her quickly and fix it all? Who made the mistake here - the bank or the customer? It is simply the worst customer service I have ever heard about!

These tales, and others, are so shocking that I wonder how US banks can get away with it? Are American banking customers totally undemanding? Or are they ignorant - don’t know how things are done outside the US and what they should rightfully demand from a modern bank? Do regulatory agencies and consumer organizations not care? Are American businesses unconcerned with banking efficiency? And especially about the banks - do they not care about efficiency? Do they not care about customer service?

It’s easy to fix! Send some guys on a plane to study how it’s done overseas. Buy the software. Do the changes. Get with it! You are lagging by at least a decade!

Or do you just not give a shit?

The American airline industry is in trouble. They were already in it, when the oil prices started to rise. And then the rising costs of fuel just made it worse. And since increasing fuel prices coincided with the economic downswing in the US – which in itself meant less demand for travel – things got a lot worse.

But all the principal actors – all the airlines – still work on the assumption that they all have a future in the skies. I doubt if that is the case, but still, that is - naturally - their working assumption.

So now they seem to be in a state of panic. Most of them, at least. And so they are looking for ways to save money, big and small, as well as ways of increasing revenue. Of course.

Panic sometimes results in great ideas. There is nothing like need to make people think and organizations act. However, it is rarely the case that all ideas born of need are great ideas. And this is definitely not the case for the new fees for checking luggage that several of the hardest hit airlines are now introducing.

That, to me, is a ridiculous idea. The reason the airlines introduce it, is that not a single one of them have the guts to raise prices enough to make their operations profitable. And the reason they feel they can’t, of course, is that there is excess capacity. Which means that they fear they will lose passengers if they increase prices. Then the rational, and perhaps also the only viable long-term strategy, is to reduce capacity.

But the airlines are afraid to do that too, because they’re not sure how long the price of fuel is going to stay high, nor are they sure how long the economic downturn in the US is going to last. So they tell themselves that they are in for the long haul, and that it is important to position the companies for the next boom.

However, doing stupid things and making customers even angrier is rarely a great positioning strategy. And regardless of 15 bucks here and there for suitcases (which it will cost the airlines 10 bucks to organize, administer, and collect), as well as create chaos inside the planes, the fact remains that the US airline industry has far too many companies and far too much capacity. And, of course, most customers are quite capable of adding 15 bucks times two to the price of a round trip ticket!

The US airline industry is going to crash. And 15 dollars will not cushion the fall. Rather the opposite.

I have written earlier, in What’s wrong with American banks about the lack of efficiency, the continued use of checks and their outrageous fees. However, it seems I was much too kind. Some American banks seem to do much worse than even that. Now, according to New York Times,

Wachovia has agreed to pay as much as $144 million to end an investigation that accuses the bank of allowing telemarketers to use its accounts to steal millions of dollars.

So instead of trying to build customer confidence, sharpening up the service, improving efficiency, and building business by producing customer satisfaction, a huge American bank gets involved in a rather petty scam against its own customers for a few million dollars in profit! Elderly customers, at that! Wild! What a great way to destroy a brand name! What a great way to destroy customer confidence - just when they need it the most!

The bank’s actions were “part of a pattern of misconduct” that resulted in Wachovia’s collecting millions of dollars in fees, regulators wrote.

Wachovia has agreed to pay a $10 million fine, contribute $8.9 million to consumer education programs and make restitution to victims that could top $125 million. In a statement, the bank said this “situation was unacceptable and we regret it happened.”

How silly is it possible to behave? When is the American banking industry going to stop treating its customers as uneducated, stupid fools, and instead try to focus on building trust, satisfaction and loyalty by means of excellent service? Or building highly efficient transaction systems using the best available technology and software? In a country that, technologically speaking, is ahead of the rest of the world, but that nevertheless, from an implementation point of view – especially as far as the banking sector is concerned – is 10 years behind Scandinavian and German banks in the use of modern technology? They should improve transaction efficiency and lower costs – not run scams!

And if the high paid executives of the huge American bank are unwilling to or unable to improve their banks and customer service, then why hasn’t there been any regulatory action to just force them to increase efficiency and performance? Do American regulators not know how bad American banking is? Do they not go abroad and study how it’s done elsewhere? Do they think America is still in the forefront – and don’t want to be confused with facts?