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Why banks need a refresh
Last week I was in East Africa visiting clients there. What a great place. The energy and enthusiasm to be the first, bigger and better was palpable. What I found particularly interesting was how few banks are talking about the prosperity they create. They need to.
It has long been my belief that, having worked with some of the greatest investors of our generation, bankers share a public image that is comparable to that of the cigarette companies. Power, greed, excess, profit - toxic individuals who relentlessly chase the dollar at all costs. Now don't get me wrong, I am not about to up sticks and work for the communist party or start waving anti-banker banners but, I believe the banking and financial services industries need a makeover. They need to start speaking about the good they are doing in a language we understand, drop the socially irresponsible products, shed the old image and start afresh.
It is common for all of us to presume a certain level of understanding in those we talk to about our art. The reality is that because we race along at one million miles per hour in our specialism, we leave everyone else behind unless we are able to communicate our position succinctly and without ambiguity. This is the same in banking. There is a common misconception that the business is all about loaning, credit and fueling the consumerist machine society has created, the end game of which leaves consumers straddled with credit card debt and misery. Responsible banking, and therefore the future of banking is all about banks being held to account for sharp practices like the credit card I saw recently with an APR of 48% alongside the slogan - 'Live Your Dreams Now!'
In Africa, where the population’s income levels vary so greatly, where banks offer micro-loans aimed at small businesses - the motorcycle driver, the seamstress, the street vendor - alongside the big money deals we are all used, the message could be so different.
The impressive economic growth we are seeing in sub-saharan Africa is all about fueling prosperity, unlocking potential - be it big or small.
By offering products that help customers start and grow businesses, the banks are lifting their customers - one by one - out of poverty and into prosperity... and the profits are there for all to see. Take Equity Bank for example. Their profits are massive, yet they maintain a healthy and positive relationship with their customers by listening and empowering - the core ingredients of a true service industry.
Now isn't this a better message than we see in so many so called developed markets? Why is it that Banks are trusted in East Africa and loathed in the developed world? It isn't simply because their message is different, but it is in part. Nobody minds an organisation that helps create a prosperous, educated and smart population, even if they make money from the capital they provide.
Perhaps banks in the developed world can learn from this and start talking about the prosperity they create for the whole community and not just themselves.
