Wednesday, April 20, 2011

Big Bank or Little Bank? Big Bank.

A Big Bank ends up being more convenient and has better customer service than a Small Bank

People like to run down Bank of America.  Yes, they have some problems with their loan portfolio and the stock price has taken a tumble from the glory days.  But it remains profitable and even pays a token dividend.

On some consumer complaint websites, you'll read diatribes from poor people who bounced checks and discovered that the bank charges you for this, and moreover really doesn't want the business of constantly insolvent people.  So consider those complaints with a grain of salt.

But in terms of customer service, and the fact that they have branches, well, just about everywhere, makes them far more convenient to use.

Mom and Pop's Country Bank might give "good old-fashioned down-home service with a smile" but they only have two "in-network" ATMs you can use, which is a definite problem when traveling.  Who wants to pay out-of-network ATM fees, just because you are on vacation?

(And now you know why the big banks charge them - to run the smaller banks out of business!).

And in terms of websites, Mom and Pop's Country Bank is a little crude.  Cletus went to computer school, and it kind of works, sort of.  But Pop still thinks the computer will go "haywire" - and thus he created rules that you have to go to your "friendly local branch" to "set up" online banking or bill pay - as well as to change any aspect of your account.

In terms of Internet Banking, the big banks have the little banks by a long shot.  And even in terms of telephone banking, they have them beat.

But what about that "good old-fashioned down-home service with a smile"?  Well, from what I can tell, there is little difference between the big and little banks, and in fact the big ones might have the little ones beat.

You see, what I want from a bank is professionalism, not for them to be my friends.   Because they aren't my friends, and I know that.  What I want them to do is not screw up my account.  And Mom and Pop's Country Bank is more likely to do that.  In a heartbeat.  Lurleen ain't no good at figurin' and ciperin'

What about loans?  Mom and Pop's County Bank knows you and will loan you money more readily, right?

Not exactly.  I obtained a Mortgage from Bank of America in Georgia after filling out only a few pieces of paper.  They had previously done a Mortgage for me in Florida, and thus they "knew" me.

Mom and Pop's Country Bank required an entire binder of documents, including four years of tax returns, asset statements, and even proof of citizenship!  So much for a loan on a handshake.

I did get a loan like that once, from a small bank (Burke & Herbert) but  I was talking to Mr. Burke at the time.  In terms of service, that bank was OK, but it certainly wasn't very technically sophisticated.  Tellingly, I moved my business to another bank within a few years.

In America, we like to root for the underdog.  So we like to think the small Mom & Pop bank is a good thing and an alternative to those "heartless conglomerates".  And while the folks at Bank of America won't bake me a pie or anything, I find I can rely on them better for what I want out of them - Banking Services.

Mom & Pop's Country Bank tries hard - well, not that hard, actually.  But regardless, they just miss the target, in terms of convenience, customer service, technology, and, well, everything.

So that leaves the only reason to bank with Mom & Pop's Country Bank as an emotional one - a way of supporting a business because you feel sorry for them.

And I am not sure that is a good reason to do business with anyone.