Banks are giving consultation a bad name

They are at it again.  This week Lloyds have announced a further 49 branch closures due to the “changing needs of customers”.  It’s possibly a sign of the times but, in isolation, could leave some rural communities without any local provision.  Of course, Lloyds will consult the Unions – but what about their customers?

My local branch of the Co-op bank is due to close next month so I was intrigued to pick up their “ethical policy” on a recent visit which states that democracy is one of their core values.  The last page of this policy is even entitled ‘customer consultation’ but only relates to feedback on the policy itself.

I was caught off-guard by the closure, I had no idea it was happening despite being a customer.  So what notice do they give those affected that the branch will close?  They write to all customers who actively transact at the branch.  Not all the customers who have an account at the branch, only the ones that transact regularly.  They also write to community representatives – but even then I don’t think this would fit our model of stakeholder identification.

So I was pleased to find a follow-on document called “branch closure impact assessment” (good practice under the access to banking standard) which was on a neat pile in the bank lobby.   The document went on to explain how the bank had come to a decision and some of the pre-closure assessment details (but no details of pre-consultation engagement!).

Amazingly the branch closure assessment criteria are all documented.   For example, the decision considers a wide range of factors such as the number of customers who regularly use the branch and the cost of running the premises.  This gives me confidence that the decision was made methodically – but there is no evidence of scoring or option appraisal to go by.

As it happens, deposits at this branch outweigh withdrawals by 7% so it’s hard to understand why it’s not sustainable.  I’ve heard that branches actually gain more deposits when they close, it seems like reverse logic but people tend to bring in the cash that they are keeping at home.  This would be a terrible reason to close a branch so I’m hoping it’s not true.

According to the blurb, the impact assessment will be updated after the branch has closed – to include stakeholder feedback.  Given that the decision has been taken, feedback seems a little futile – nevertheless the customer services number is given.  It’s the only way to provide feedback.

If you call the number the first thing you hear is “please enter your 8 digit account number”.  It’s no place for stakeholder feedback – it’s a maze of customer service scripts and dead-ends.  I would be very surprised if any customer feedback about this specific branch makes its way back to the right place using this method.

The section entitled “community engagement” does not provide a list of community events or invitations to speak in person.  Instead it is a simple acknowledgement that they will write to six local stakeholders.  The list includes MP’s, the Council, Age UK and the FSB.  Hardly those directly and indirectly impacted!

Wouldn’t it be amazing if our banks consulted properly in line with their values and took decisions based on stakeholder feedback? Anything less just isn’t meaningful.  For what it’s worth, I think it’s time for the regulators to step in.

This is not consultation, it is lip service.  This is not democracy, it is a dictatorship.

About the Author

Fraser is an expert in the evaluation and use of participatory technologies gained from six years’ experience at various European consumer electronic laboratories.

Read more about Fraser

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