August 31, 2004

Everyone in the industry talks about "financial products and services." And to this point, I have dutifully repeated the phrase in my writing and unwittingly reinforced its usage. Bankers mention "products and services" almost as much as they talk about what's supposed to happen "at the end of the day."

Maybe it was that summer working in my uncle's clothing warehouse, but when I think of products, I picture plus-size women's suits on hangers, not checking accounts. A product fits on a rack or in a cardboard box. You can attach a price tag or an RFID chip to a product. You can return a product for store credit. You can even shoplift a product. But a mortgage? A credit card? Those aren't products, those are loans.

And, as for "financial services," let's talk about service. As far as I'm concerned, service is getting the order right and not spilling the soup on my lap. Service is letting me sleep on an airplane rather than waking me up to deliver a cup of lukewarm coffee. Service is saying, "Mr. Schneider, you forgot your watch in the hotel room. We'll overnight it to you."

Now, if the typical bank ran that hotel, it would pawn the watch and send you a coupon for what was left after shipping, handling and a "winding fee."

If the typical bank ran a restaurant, the sommelier would cackle as you ordered a bottle of vinegar using your high-school French and then serve it to you with an uncorking fee and a restocking fee.

If the typical bank ran an airline, well, they couldn't do much worse.

In my experience, retail banks have strayed far from "financial services." They're in the business of waiting until people screw up and then charging them exorbitant fees when they do. And they do.

Make just one mistake and you're hit with a penalty, and your rates get jacked up. I could be talking about banks or I could be talking about highway patrolmen handing out speeding tickets. Sure, we shouldn't overdraw our accounts and we shouldn't speed. Just don't call it "service" when you pull us over. That is, unless you're going to let us off with a friendly warning.