Real estate mogul and TV personality Donald Trump said in a recent interview with GoBankingRates.com regarding the reputation of the banking industry that banks should increase their transparency with consumers.
“They need to be more upfront regarding their products and services,” Trump said. “People are being bombarded with information, and the competition has become fierce, which leaves the customer confused and angry. The only way banks can regain the trust and confidence of Americans is to be clear and honest in their dealings. There’s a lot of skepticism at this point, and the damage needs to be repaired.”
Other participants in the discussion included “Rich Dad, Poor Dad” author Robert Kiyosaki, The Washington Post banking reporter Danielle Douglas, former Merrill Lynch President and Smith Barney CEO Sallie Krawcheck, Reuters financial blogger Felix Salmon and a number of other banking experts.
Kiyosaki said banks could engage more in micro-finance to provide small loans to millions of small businesses.
“By servicing this underserved market, they would build up a database of responsible micro-borrowers and cull the cream,” Kiyosaki said. “Anyone in business knows that one of the greatest assets of a business is a database of responsible customers and their lifetime value.”
Douglas said banks need to improve customer relations to “make it easier for customers to talk to a representative when they have concerns” and to re-think their fee systems.
“Perhaps the biggest thing is disclosure—the idea that a lot of banks don’t let their customers know in full what comes with their accounts,” Douglas said. “Be transparent with these things, let people know what’s going on and allow them to make a choice of what they want to do from there on out.”
Krawcheck said the key for banks to regain their trust is to “quit messing up.”
“Here’s an idea: to improve customer satisfaction, pay bank employees based on customer satisfaction and trust instead of based on shareholders, shareholders, shareholders,” Krawcheck said. “In other words, shift AWAY from incenting risk…and TO incenting trust.”
Salmon advocated moving funds from big banks to credit unions as during the “Move Your Money” campaign but said big banks won’t likely be disappointed because many individuals who move their money were not profitable for the banks in the first place.
“So when you ask what banks can or should do to ‘rescue’ themselves in the eyes of these small depositors, I kind of envisage these shadowy executives rubbing their hands and saying, ‘Why on Earth would I want to rescue myself in the eyes of these depositors?’” Salmon said. “’Because, frankly, these depositors mean nothing to me—they’re nothing but a headache.’”