Money Magazine is not the worst personal finance magazine (that goes to Kiplinger’s) but it’s not the best.  Even if it were, all personal finance magazines tend to be 90% crap.

Case in point, Money recently published an article called “5 reasons banks don’t get it.”  I read the headline online and thought it might be an interesting read.  I thought that the editor’s had done some profound research and learned what consumers wanted and then compared it to what banks offer, of course including some kind of reference to why the banks would offer it (i.e. increased revenues or customer satisfaction).

Naturally, if this had been accomplished I might have linked to the story on Twitter or something, but indeed it was not, so it became fodder.

Here’s the list of the 5 reasons banks don’t get it:

• Wish no. 1: Help you manage your money
• Wish no. 2: Make it easier to save
• Wish no. 3: Deliver real service
• Wish no. 4: Let you bank on the go
• Wish no. 5: Get real about fees

Right off the bat, this isn’t a list of why banks don’t get it, it’s a wishlist of features the editor’s want from their banks.  My guess is the writer had one title for the story, and the editor had another one that would catch the reader’s eye.  It worked.

So because these wishes aren’t granted, this of course means banks don’t get it.  Banks do get it, they get it so good too.  The banks know that most people don’t want help managing their money.  The few that might want help are better off using other resources than the bank, the bank knows his.  Banks also have no incentive to get you to save more.  If you put your money in a local bank’s savings account, they can’t do a whole lot with that money.  They want to push you into CDs and other vehicles that lock up your money for a longer period of time.  And again, if most people can’t figure out how to save on their own with A SAVINGS ACCOUNT, then there’s little that can be done for them.

With the 3^rd wish the writer’s compare the service at a bank to the service at a credit union.  Sure on the surface the two institutions are similar, but they forgot that credit unions are non-profit, and banks are for-profit.  You can’t compare the two.  Credit unions will always win in service and services.  If customers were really after all that service they talk about in the story, we’d all switch to a credit union.  As of yet, most of us haven’t.  The same goes for the 4^th wish.  The writers want to bank on the go, which means they want cool iphone apps and the ability to text message a service to get their balance.  Aside from the fact that many of the big banks offer these services already, almost every bank at least has a number you can call to check your balance.  Seriously, this is a wish that was granted 5 years ago.

Finally, Money wants the banks to get real about fees.  Most banking fees that people talk about are overdraft fees.  Yes, they are too high.  However these fees are meant to punish the consumer for bad behavior.  Frankly, if you overdraft on a regular basis you deserve to get hit with fees.  I think you should maybe get granted one overdraft a year to protect you crazy bank screw-ups like I had one time (the fee was reimbursed).  Sadly, Money doesn’t seem to explain why the banks would cut back on these fees.  It makes the banks money.

So it isn’t that the banks don’t get it at all.  The writers of Money don’t get it.  They are thinking that every consumer is a personal finance junkie like you and me.  They are also thinking that banks should be your friend, coddle you, and deliver great products and services irregardless of the bottom line.  Can banks deliver these services and still make a profit?  Sure.  But until someone shows them how doing so will increase their profit using a Net Present Value calculation with specific cash flows, you’re wasting your time.  You’d be much better off running to Congress to protect you from the big mean banks.

If you want to educate the consumer, teach them the business.  If you want to talk to the consumer like they’re a 10 year old, write garbage like this.

Photo: consumerist

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. Also keep in mind that nothing I say can be construed as financial advice.

categories: banking, media, personal finance