What does a publisher do? Bank mindfully
What does a publisher do? is a series of posts designed to answer that question, interpreted not in the sense of “What functions does a publisher seek to fulfil?” but rather “What operations does a publisher (well, this publisher at any rate) perform?” This is the fifteenth post in the series.
The second post (‘What does a publisher do? Manage stakeholders’) in this series set out a framework for subsequent posts – a framework based on the types of stakeholders a publisher needs to work with. Today’s post focuses on one kind of supplier, namely banks. So:
What, as a small business, do we want from a bank? Nothing, it seems to me, very demanding. Though small business banking is often discussed in relation to loans, that isn’t what we need: apart from an initial loan from the owners (long since paid back), we have had no need for loan capital and don’t expect to have – our business is profitable and cash generative.
No, what we require from a bank, primarily, is a few simple things done well. We want our capital kept secure. We want standard transactions processed efficiently and accurately. And we want to be able to communicate.
Before founding a limited company, we ran a partnership, which banked with Santander. The main plank of Santander offer was that basic services, such as depositing cheques, were free. Why, then, when we founded the limited company, did we not turn to the same provider?
Because, in a nutshell, Santander had proved unreliable on even basic service and, to boot, unforgivably uncommunicative.
The straw that broke the camel’s bank was that we required an annual one-page document, showing the interest paid and tax deducted. It had never occurred to us a bank this request might be beyond a bank’s ability to fulfil. But so it proved with Santander.
Worse, it was impossible to have any effective communication with the bank over the problem. When we penetrated the endless telephone menus, we spoke to people who were not sufficiently informed or authorised to deal with the problem and seemingly unable to pass us onto anyone else (though some assertiveness on our part showed that part of their claims to be dishonest).
So we decided to use Barclays, even though we would incur charges for some services that Santander would have provided free. To date, Barclays have proved efficient – and have provided us with accounts in more than one currency. For us, the main strength of their service is that we can actually talk, fairly readily, to people (in person or on the phone) who seem well informed and sufficiently empowered.
Which is not to say I feel any loyalty. I feel extremely uncomfortable about banking with a company that fixed the Libor rate. If I knew where to switch to, I would have no hesitation in doing so. But the culture of the other big banks is equally diseased.
Although the banks all make humble noises about the need to learn from mistakes, blah blah blah, I don’t believe they have the ability to do so unaided. The poison is too deep. The managers who need to drive the change have themselves been infected.
There will need to be a process of what economists call, following Schumpeter, creative destruction. There will need to be a generation of newcomers to the market, founded on an ethos of respecting customers. When faced with such competition, the cowboys – that is, the big banks – will need either to heal themselves or get taken over.
So I’m scanning the horizon for newcomers. Cambridge & Counties Bank looks a promising candidate, though their range of services is narrow and we haven’t yet had time to investigate them.** I expect other candidates to emerge in due course.
In the meantime, we are in any case following our policy of not relying on a single provider. For our savings accounts, we have turned to a mutual building society – in part because the rates of interest are higher, but also because a foundation stone of our security management policy (outlined in a previous post in this series) is to use more than one provider for each type of service.
Running a business isn’t easy: at any one time there are many things to think about. One would rather not have to think about banking service – banking should be boring. But that sector’s self-destruction, based on disrespect for the customer, means that mindlessness is not an option.
The good news is, by seeking opportunities to switch accounts away from the diseased, small businesses can help to heal our ailing society.
** We have now (2 Oct) – and have opened an account with them. We’ll see.