I started working for a bank after graduating from college last year. My job gives me the opportunity to work with all the areas of the massive bank. Because of this I’ve learned a lot about how the bank works behind the scenes. Its thousands of people in a big room counting cash, just like I imagined. Actually the complexities go beyond anything I could have dreamed. I’m proud of my bank, love my job, and my industry. But you can’t help but be annoyed by certain things you love. So I compiled a list of the 9 biggest things that bother me about banks. Don’t let this scare you away, just remember a bank is a retail business. Look at everyone in there the same way you would a car salesmen.

In no particular order:

Everything is about fees
The goal these days is fees. Executives push fees because its immediate revenue. They say so right in the quarterly reports. Fee growth is a metric! Where as money made from interest can take up to 30 years to collect, a fee is instant. This also allows the salesmen to collect their commission and move on. In the process, the consumer is screwed. Additional reading: Banking Industry Explained Part I and Part II

Fees are always negotiable
Its a game of give and take. All branches and bankers are ranked against each other and get kickbacks based on how much revenue is brought in. Every fee on your account goes to the local branch’s revenue. They don’t want to waive those fees because it is literally, money out of THEIR pocket. For new and existing products, a huge source of revenue to the teams and the bank is fees. You don’t have to take on any fees you don’t think is reasonable. If you’re new to the bank and transferring a decent amount of funds from a competitor there’s a lot of leverage to be had on your part.

The best products for the bank, are often the worst for you
My parents were referred to a financial advisor to sort out some investments. This guy managed to convince them to pull their money out of their savings account (paying about 1%) and put it into a money market account (paying less than .05%). Now the bank is making more money off the same funds. He also nicked them with a fee for their trouble. Banks and bankers love people like my parents.

That little person in the glass office is a commissioned salesman
They aren’t an advisor. They aren’t an expert. They’ve had a few months of training on selling bank products. There’s no financial licensing required, you don’t even need a college degree. One recommended my parents open a HELOC (home equity line of credit) for their emergency fund so the cash in the emergency fund could be invested. Makes sense mathematically but doesn’t really account for the unknown.

Regular bank credit cards suck
About their only advantage is overdraft protection, which comes with a fee anyway. I contacted my bank’s credit card team and asked them if they could even come close to a few offers (like Chase Freedom) and the answer is no. Really and honestly, stick with the credit cards you see advertised on commercials, they are the best.

We can see it all
I’m not a teller or a banker, and I can see all of your accounts. Every dime you’ve deposited or borrowed from my bank is visible within a few seconds. Your social, address, phone number, job, income, account numbers, whatever is all visible to me. Direct deposit? I’ll just redirect that to another account. Is your money at a big bank? There are thousands of people capable of stealing your identity in seconds. The key here is to keep your finances simple. An identity thief wants someone with a lot of accounts and varying balances, that way their actions aren’t noticed as much. Of course monitor your accounts and make sure everything is accounted for weekly.

They complicate your situation to increase your reliance on them
Anyone in a position of authority feels the need to complicate things to justify their existence. We all do this, and bankers are no exception. The banker has no incentive to simplify your life. Their sales goals and commission are driven on keeping the customer coming back. The more accounts and loans you have the more reason you’ve got to come back and see your banker. It can start with splitting up a checking account, but you can end up with 6 deposit accounts, a mortgage, a credit card, a HELOC and an unsecured line of credit very quickly. Its all good for the banker, you paid fees on each of those accounts.

You pay more at the ATM than you think
Don’t you just love when you’re short on cash? Dive into the local store to the ATM and pay $1-$3 to have your money withdrawn. If its for a $20, you might have just paid a 15% fee! Well that was for the ATM company’s trouble. Now go check your bank statement, your bank is charging as much as $3 for the trouble too. Recently, I was hit with $1.50 on the front end and then my own bank (and my employer) hit me with a $3 fee. This was waived after some complaining on my part. I’ll stick to just the company machines from now on.

We don’t always play well together
There is a very competitive atmosphere between different groups at the big banks. A business banker can serve your personal accounts and a personal banker can serve your business accounts. There are plenty of cases where teams fight over clients behind the client’s back. There’s also a problem of teams fighting over who gets stuck with a client. Both cases can end up with the client leaving the bank.

By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics.

categories: banking, lists, personal