Every time I’m waiting in line to deposit a check at a bank, I wonder what the hell is taking so long. Who are these people with huge envelopes full of cash? Why does the elderly lady always have to argue with the teller about why her ATM card isn’t working? What are tellers thinking when they see massive bank accounts from punk kids? I’ve invited a blogging buddy to share his insights. Enjoy!
RAARGH!!!! I’m ARB, the Angry Retail Banker!
Over at my blog, I offer “An Insider’s Take On Retail Banking.” But today, I’m going to talk about people instead.
People. The general public. The customers who bring us the moolah. When you work with them and their money, you get to know them a bit.
I’ve been in banking for ten years. I’ve seen and dealt with people from all races, religions, and socioeconomic classes. And when you work in retail banking, you start to get insights into how people work.
Money is the most powerful force in the universe, right up there with gravity, compounding, and bacon. It finances wars and it finances dreams. Having it can buy you freedom and your life; the lack of it can make you a slave to strangers. People’s relationship with their money is very complex, and nowhere does a person interact with their money more than at a bank.
Because of this, you can learn a lot more about people when working in retail banking than most other places, because a few numbers on the screen can tell one hell of a story if you take the time to read it.
We Financially Neglect Ourselves
Sam recently asked if Americans are so financially unprepared that they couldn’t even meet a $400 emergency expense. It’s true; we are financially unprepared. But it goes beyond simply not having an emergency savings account.
We treat opening up a bank account like ordering food at McDonald’s: “I just want a checking account and a debit card. Just give me whatever account has the lowest minimum. How long is this going to take? Because I’m meeting a friend for lunch at McDonald’s in fifteen minutes where I’m going to put way more thought into what I want for lunch than anything I get from here.”
Because we’re not taught in schools the importance of managing and moving our money properly, we don’t treat its movement and management with any sort of care. No talking with a loan officer about protective lines of credit or an investment advisor about socking money away for retirement. No talking about how to protect your money from bank fees or how to safely use your debit card without the risk of it being compromised. People don’t even consider putting beneficiaries on their high balance accounts!
No wonder global card fraud damages are estimated to reach nearly $28 billion this year and upwards of $32 billion by 2019 according to The Nilson Report. We don’t even take a look at our bank statements unless they come in the mail! To say nothing of quickly checking an ATM for a skimming device. How do people know if their money was stolen?
Between the lack of financial education and the lack of financial caring, the typical retail banking client digs themselves into a financial hole.
We Are All Living In The Past
When it comes to our financial habits, we are stuck in the past.
Look at retirement savings. People still think that the way to retire is to throw their money in a savings account, despite a decade of historically low rates. They think their pensions will take care of them and 10% CDs are right around the corner!
“When are rates going back up?” is a coming question I get. Never. Sorry.
This is why traditional retirement might be a thing of the past. Check out this heartbreaking story about retirees now living in poverty after the Teamsters Local 707 pension fund dried up. The scariest part about this story is that more pensions are going to follow suit—including state funded pensions—leaving millions without retirement funds despite decades of work.
I guarantee you not one of these people ever saved for retirement because they they thought they’d have their pensions and Social Security to live off of forever. It’s why I deal with 50+ year olds with $18,000 IRAs earning 0.1%.
Well, the current generation isn’t too far off. So many Millennials don’t even invest in their 401k’s and are expecting massive inheritances to bail them out when the retirement age comes. Sure, their parents are the wealthiest generation ever, but what if they decide to leave the money to someone more deserving?
We live in the past; we see that the government and the retirement plans just “took care” of our parents and grandparents when they retired and figure everything will just turn out alright. We don’t realize that we live in a different reality where you must save diligently, invest intelligently, and work on your side hustles or else we will work for an employer until the day we die.
And you wouldn’t believe how many people have never started saving for retirement. I know because I get people in their fifties coming in looking for advice so they can start saving for retirement.
It’s not just in these manners that we are stuck in the past. People also don’t seem to realize that the heavy financial regulations that they demanded be put on the banks actually exist.
Customers refuse to comply with our AML (Anti-Money Laundering) regulations, claiming that as a customer they have every right to exchange thousands of dollars in cash without a paper trail (they don’t).
Business customers get testy during the opening process when we need more documentation or information about their businesses, claiming that it’s none of our business (it is). We’ve got to follow KYC (Know Your Customer) laws.
Decades ago, you could open a bank account with an out-of-state ID. Now? We need valid ID with a local address, a utility bill, and business formation documents with a full explanation of how you do business and proof of business (if your account is a business account).
People don’t seem to realize the golden age of the pre-9/11 world and the pre-Great Recession era is gone forever. We asked for regulations; we got them.
Combine that with people clinging to their paper statements, paper checks, and bank tellers, and is it any wonder why some people take forever?
Related: How Much Should I Have Saved By Age?
People Have More Than You Think
When you think of rich people, you think of fancy suits and Maseratis, right?
What you don’t realize is that many people are practicing Stealth Wealth, quietly saving and investing their money while keeping the appearance of an Average Joe or a Plain Jane.
Or they’re some bats***t crazy psychos who fell into money because “the Lord works in mysterious ways” (translation: “God hates you”).
If there was a person who I would never have believed had a six figure bank account, it’s the nutter in this story. Short version: A chronic alcoholic threatens to physically beat up my supervisor, forcing me to call the police. The guy had been a regular customer up until that point. He looked, sounded, smelled, acted, and really smelled like an alcoholic, but had over $100,000 in his bank account at all times. What the hell!?
While this was the only rich alcoholic that I ever had to deal with, he wasn’t the only person woefully unqualified and undeserving of the amount of money they had. It’s amazing to deal with a person with over a quarter of a million dollars in a savings account who can barely understand simple sentences.
Or when someone with over $400,000 in an account thinks that it’s okay to pee on a teller’s car “because I’m a premier customer.” That actually happened, by the way.
Fortunately, real Stealth Wealth is also practiced by seemingly ordinary people. It’s refreshing to meet someone who’s normal, friendly, and down-to-earth, who drove to the bank in a “regular” car or came by public transportation, and then open their customer profile to see a million bucks sitting in a number of different savings accounts.
I’ve spoken to a number of these people, and there seem to be a few themes common among all the customers with tons of money in the bank.
1) They tend to be very financially savvy and experienced. They are far from investment professionals, but tend to know about the stock market, municipal bonds, and various financial instruments. They like to have interest and growth calculations done before investing their money into any financial solution. They know all the pros and cons of different types of investments.
2) They tend to not just own their primary residence, but to have either bought it entirely in cash or made accelerated principal payments to the point where the property is paid off ridiculously early. More than once, I’ve spoken to couples who have only been in their homes a couple years and yet own them free and clear.
3) They tend to own their own businesses. Multiple businesses. This is the big one. Rarely do my high income customers make tons of money from a W2 salary. Very often, these are investment properties held in LLCs, but they can be anything. Consultancies, management companies, wholesalers, you name it. Anything that often requires them to yell at somebody over their cell phone mid-conversation. Then there’s blogging as the best business in the world.
When it comes right down to it, working in retail banking has taught me that you can never judge a person’s financial worth by the clothes they wear, the car they drive, or even their bank account balance. Or, as it sometimes seems, by their mental state.
People Think They’re Smarter Than The Professionals
Just recently, a woman came in to pay her $32 charge off so that she could open a new account. I noticed that she had two Social Security numbers on our system. The one she gave me had an account sent to collections in which she owed that $32; the other one had an account under it in which she owed $986.
She was “shocked” and said she didn’t know about this and would come in the next day to speak to the manager. I never saw her again, just as I predicted. I also took the time to note everything on her account so that she doesn’t get one over on the bank, opening up a new account when she still owes us money.
People in this country don’t have respect for the time or wisdom of a professional. They speak to a financial advisor and decide that the advisor doesn’t know what he/she is talking about because they can’t offer a double digit guaranteed interest rate in this low rate environment.
At best, they hold the expectations of professionals to be Law And Order caliber experts who can deliver fantasies. At worst, a professional in their minds is some MIT/Harvard suit with no knowledge of how the real world works.
This isn’t native to banking, but here, it leads to people trying to scam the bank because they think we don’t know things or share information.
It’s why people fight to deposit other people’s checks, or convince us their fee is a “bank error,” or get us to open accounts for fake businesses.
Why is that people think their doctor never knows what he’s talking about, or why all lawyers are shady and immoral, and why they think they can trick the bank.
They think they are. They aren’t. See: Dunning-Kruger Disease
Tips For Being A Happy Retail Banking Customer
What sort of Angry Retail Banker would I be if we parted ways without giving you some tips on how to be a happy retail banking customer? Your happiness erases my Anger (capital “A” is intentional).
1) Minimize Fees
First off, fees. Very easy to avoid. Says who? Says you, according to a survey by the American Bankers Association in which 55% of you say you pay zero bank fees.
Pat yourselves on the back, everybody!
So for the 45% of you who are still inexplicably handing your bank your hard earned cash, here’s my advice. First, stop using non-bank ATMs. Don’t even use a competitors’ ATM. Use only your own. Chase will charge you a fee if you use a Citibank ATM, but not if you use a Chase ATM. Brilliant, right? Right.
Next, overdraft protection. Have it. Overdraft protection is not the thing that allows your debit card to put your account negative when you have no money. Overdraft protection is the thing where if you spend more money in your account than you have, money sweeps into your account automatically to cover the shortfall. There will likely be a transfer fee involved, but it’s better than the $35 fee per item.
Next, higher level accounts. These are great things to have, if you can afford them. Because you know what’s cooler than a low monthly minimum? Having an account where you still stay above that minimum, but pay nothing for checkbooks, bank checks, stop payments, and wire transfers. Listen to us when we recommend you put your money into the right account, not just the cheapest.
And last, take care of yourselves financially by checking your statements periodically and reporting unauthorized charges to the bank. We’ve learned today that people don’t do that, and by being the exception to that rule, you can avoid the fees that come from someone else using your money.
2) Know How Much Of Your Funds Are Available
Second, we’re going to talk about funds availability, or not spending money you don’t have.
You see, your bank may make that check available next day, but the money isn’t really there. The check isn’t clear yet. It can still bounce.
That’s why your teller won’t give you the money. We can’t authorize debits on funds that we know can still bounce.
My advice? Give your checks at least three business days to clear before you spend any money. And understand that the bank has every right to put an extended hold on checks if they have any reason to suspect that the check might not be paid. Because in the end, a check is just a fancy IOU with no guarantees behind it. And nothing more. Just a piece of paper with stuff that could easily be put on a Post It note.
3) Omni-Channel Banking
Believe it or not, all banks have multiple channels available for you to use for your daily banking needs. Branches, telephone, ATM, online, and mobile.
Sometimes one isn’t available. The ATM’s down, you forgot your online banking password, the branch is short staffed.
It’s channel diversification.
Too many people don’t know how much money they have because their paper statements haven’t arrived in the mail yet. It’s 2017; this is unacceptable.
Too many people come into the branch and wait for me to finish dealing with a long line of customers and a giant stack of time-sensitive paperwork, instead of just calling the 800 number. Call.
Making use of all banking channels available to you will make your banking experience that much easier.
Gain Control Of Your Financial Life
Having a job in retail banking has given me a lot of insights about people, for better and for worse. Many people are spoiled or clueless because they’ve never worked a minimum wage job or a job that forces them to deal with people. I’m glad I have ten years experience in retail banking because it’s given me valuable insights into other people.
And learning about other people is how you make yourself a better person. If you have any questions about retail banking, feel free to ask!
– The Angry Retail Banker