When it comes to branding, the banks spend hundreds of millions of dollars every year telling us how great they are. Here are some of the brand promises they’re making.
Westpac = Australia proudly supported by Westpac. (Delighting our customers and helping them achieve their financial goals)
CBA = CAN. (The bank where our customers CAN achieve their goals)
nab = More than money. (nab understands where our customers are at in their lives)
ANZ = Your world, your way. (ANZ helps customers to live the life they want)
BOQ = It’s possible to love a bank. (BOQ offers customers a genuine alternative)
A brand promise, however, is a promise made and a promise kept. This little segment from the Royal Commission illustrates clearly how the banks do NOT keep their brand promises.
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The way I see it, the banks have totally lost their way in their pursuit of profits. They will say and do anything to make another buck, and it’s a slippery slope that started in the 1990s.
CHAPTER 1
Pre-1990s
Banks had ethical and prudential model. For the most part they did the right thing by their customers and by society. They did good business and left a legacy.
CHAPTER 2
1990s-2008
Banks shifted to a sales and service culture, under the guise of “maximising shareholder value”. In reality it was about management greed, fuelled by out-of-control bonus schemes based on KPIs. Massive short-term bonuses had CEOs and managers focus on the short term.
CHAPTER 3
2009-2018
With sales getting harder to come by, the focus shifted to driving down costs in order to squeeze out more profits. Arbitrary targets for cost reduction = back office costs, the systems and compliance. The money-laundering debacle at CBA is just one of many scandals that resulted.
All of this of course went on under the benevolent gaze of the boards who were meant to be safeguarding the shareholders’ interests, and in a regulatory vacuum (ASIC simply didn’t turned up).
CBA was given a $700 million fine just the other day for its money-laundering activities – and 54,000 of them – and its share price rose by 1.5% on the same day. Why? Because the fine was so small (relatively speaking) that investors were relieved. What could the fine have been? What say a year’s profits – that’s about $10 billion, and would be sure to inflict financial pain and hurt where it matters.
Will the Royal Commission change anything? Will anything change after the Royal Commission? And what options do we – you and me – really have?
