Academic journal article ABA Banking Journal

You're Not in the Banking Business

Academic journal article ABA Banking Journal

You're Not in the Banking Business

Article excerpt

What is that supposed to mean? Simply that if you think of yourselves as being in the banking business, you're looking down the wrong end of the telescope. A successful business person, now retired, said to me recently, "Banks are not in the banking business. They're in the service business."

His point is that whatever line of business you're in--a manufacturer of aircraft components, logistics support, publishing, coal mining, or financial services--you're in the service business. That's because all businesses have to find, and then serve, customers. Even if you have a unique niche or product, you can still fail to capitalize on it if you don't provide good service to your customers.

People may overlook poor service for a time if a restaurant or new app is so hot that they have to go to it, or have it. But in a business like banking, where most products and services are offered by all players in the business (and many outside the business)--commodities, in other words--the differentiating factor is service.

Fortunately, service is a rich vein to mine, with many nuances and variations. You have courtesy (a fundamental), convenience, responsiveness, knowledge, ability, initiative, extra effort (pushing to get a response to a customer ahead of a meeting), a "good attitude," clear and timely communication (another fundamental), patience (worth more than gold), and much more.

Even in support functions, employees are serving other employees, who are dealing with customers directly or indirectly. (Okay, some regulatory chores may be a stretch, but for the most part the point holds true. …

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