I've been on holiday for the past few weeks. But even as I sat on the beach, building sand castles with my five-year old, I still lent a thought to the world of financial services.
An old friend in New York sent me a message over Facebook asking if I knew anything about SmartyPig or banksimple, asking along the lines 'are these
real banks?' She holds an account with ING Direct and was looking around for an account with better interest rates. (We live in an age when the 1% she was getting from ING Direct was the best she could find among the traditional,
real banks)
Being the font of knowledge that I am, I sent her all the information on these new banks, and assured her that they were indeed
real places where she could invest her money. (In the case of US financial institutions, your money is insured by FDIC up to $250,000).
But her next comment intrigued me. "Thanks for the info! I'd heard little info bits that were giving me the impression that these online non-banks were more like Facebook where members could chat about their money wins and woes giving investment advice and
the like. It just didn't sound secure. I think the ones listed here are a completely different animal. Hmmmmm.."
Now, I've written before about how clever marketing and flashy giveaways should not distract the customer from examining the actual banking products on offer. Balloons
and dog biscuits (and Twitter accounts) are all well and good, but banks don't sell dog biscuits, they sell mortgages, and savings and checking accounts - real products for real people living real lives.
However, what if some of these new online banks, with their sophisticated online presence and expert use of Twitter et al, aren't actually getting the message across to the consumer that 'Hey, in addition to being able to contact us via Twitter - we've got
savings accounts too!'?
I am naturally wary of marketing campaigns that resemble the Wizard of Oz 'Ignore that man behind the curtain with the mediocre interest rates, pay attention to the big red lollipop instead.'
However although many people complain about the lack of customer service from the likes of Bank of America or Citi, bank clients tends to be pretty loyal. Maybe it's because, even though I am not a client of those banks, I have a good idea what types of
products they offer.
If a regular bank client, who doesn't work in financial services, looks at the likes of SmartyPig and banksimple and thinks 'are these just social media sites?' - there might be a distinct lack of old-fashioned marketing know how at fault.
Once the great and powerful Oz gets consumers to look at the Emerald City, maybe some attention needs to be paid to the bank behind the curtain holding the mortgage details and savings account rates? After all, isn't that what
real banks are for?