gleedsaling

A surprise was in store when I (digitally) opened the latest HBR – a contribution from Ronald Coase on “Saving Economics from the Economists”. A surprise because I had assumed that the author of the seminal 1937 paper on “the Nature of the Firm” was no longer with us (Wikipedia tells me he’s in fact going strong at 101). Nice to see his article returns to this subject, with a plea that economics has strayed too far into theory to be useful to “business”. Although I’m not sure the article’s main thesis is right. I seem to recall that the latest Nobel prize in economics went to to professors Alvin Roth and Lloyd Shapley for their work on the best possible way to allocate non-priced resources (for example, scarce places in popular schools). That seems pretty practical to me. And of course, whilst economics may have become more rigorous, the whole field of business school education and research has opened up in ways that (I would assume) a younger Ronald Coase could not possibly have imagined.

To be sure, much of the business school writing lacks definitive guidance for businessmen – but isn’t that just a reflection of what I vaguely recall as “the oligopoly problem” – the appropriate model for many markets today?

But whatever the gripes it’s worth a read.

As I am at present “resting” between assignments, I have had the chance to sort out some of our personal financial affairs. This has led me to dealings with banks & building societies other than HSBC, to whom I switched my main banking relationship 4/5 years ago.

For example, I have had dealings recently with “a major UK building society”. They are currently advertising on TV that, while you do need a bank account, you don’t need a bank. True enough, but there are certain basics you have to get right. In my case, I need to transfer my online account to joint names – so I take a form into a branch (well, OK) and then check a week later online to see if it is, indeed, in joint names. Problem: the internet banking site doesn’t show me if it’s single or joint names – indeed, it shows no name at all. Not a good start given that I want to transfer funds to an e-savings product with them. However – it gets worse. I phone the contact centre. They want to “take me through security.” Only problem – their questions were different from those used to set up internet banking, and ones I didn’t know the answers to (e.g.”what is the overdraft limit on your account” – “don’t know, I never use it”). So I failed security clearance, which always makes me mad. Can it get worse? – yes it can! OK, I said – get someone to phone me back. “Oh I’m sorry sir, we can’t do that, we are an inbound call centre only”. Time to start chewing the carpet. In fact I emailed my query in & they answered – but in the process they had gone down the snake to the bottom of the pyramid (see the graphic below from an IBM White Paper on rebuilding customer trust in retail banking – http://goo.gl/Kvm7B)

The trust pyramid in retail banking – see the IBM White Paper

Contrast HSBC. “Would you like to talk to one of our Premier advisers?” Well, I suppose I ought. Fill in the form, 90 minute slot booked (yawn) – but in fact a sensible 20 minute conversation with one or two good ideas. And they had helpfully suggested I do it before, following the Retail Distribution Review, they introduce charging (a topic which will need another blog entry). So they secure a place at the top of the graphic  – acting in my best interests even with no immediate benefit.

The problem with retail banking is that it generates too many customer experiences that push people down the snakes to the bottom of the pyramid, and not enough that provide a ladder to the top. The good are very good – and are ready to go mobile, exploit social networking etc. But the rest better fix the basics!