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Is the banker obsolete?

Technology is the enabler, not the disruptor

Is the banker obsolete?

It seems that each day there are fresh warnings that the banker in the banking relationship is obsolete. The steady encroachments of fintech businesses into the traditional domain of commercial banking lends a certain urgency as well as inevitability to this way of thinking.

I came of age in a different time and in a very different environment technologically from today’s millennial bankers. So it’s not surprising that I’ve got a different and less draconian view of the industry and the viability of its various business models.

I don’t believe that the lender in a lending relationship is an artifact. Nor do I think for a minute that a majority of our customers do either.

There’s a need for the personal touch and I don’t mean this as a deferential “nod” to customer service. So many of our colleagues talk of customer service but darn few really understand what it is and means to our customers.

Getting it right

Perhaps some of you read this week the newsletter of one of banking’s prominent credit services consultants, Jeff Judy. His column had an interesting story of a relatively large non-profit that set out to realign its banking relationship to better suit what it needed to serve its clients. 

There were four requests for proposal sent out and four responses received. One was outstanding and memorable for the care and attention to the prospective client’s interests and needs.

On the other hand, another read like a series of canned talking points—rote responses appropriate to any occasion or any need. The remaining pair were of only average quality. All they succeeded at was touching the bases of the RFP.

One bank had listened carefully. One hadn’t listened at all. And two seemed distracted and distant.

Recognize who is really in charge today

If a banker is indeed becoming irrelevant, than the RFP responses could have been—and should have been—reduced to a utilitarian formula of the most service for the lowest cost. But the winner was not even the lowest-cost provider. Why not?  Doesn’t that seem counterintuitive in terms of what we see and hear today?

When you strip away all the mindless chatter about technology and banking and how customers don’t visit branches any more, there’s one dominant message to me—though I’m not sure everyone’s hearing it. The new reality is that the customer wants to determine the terms of engagement.

But the operative word is “engage.” You can’t engage with an organization that isn’t listening, and is obviously not interested in listening.

Engagement can range from personal contact at the customer’s place of business to a series of electronic interfaces and contacts, or a virtually infinite set of possibilities in between.

Today’s customers want to do it their way and not necessarily the bank’s way.

Thought of in this light, technology becomes the enabler, not the disruptor. Give the customer what he wants. Sounds pretty simple.

What makes a banker worth knowing?

If the customer values your advice or mine, particularly in a lending relationship, the overwhelmingly important issue to that customer is whether we are competent and experienced enough to deliver value. There’s a big difference between knowledge and experience.

When I started out many years ago, my bank nurtured me to assist me in gaining the experience I needed to be credible and useful to customers and prospects alike. I was mentored in a “soft” way by pairing me up with an experienced person and assuming a “junior partner” role in various banking relationships.

I was taught to listen with a fine ear and present my views clearly and simply. I learned the importance of knowing when to talk and when to remain silent.

Some of my new business calls weren’t very effective but with the help of both prospects and experienced partners, I made progress and soon enough shed my training wheels.

You can’t do it from a desk

One lesson I learned early on, which I’ve mentioned several times in these columns, is how the customer appreciates a visit at his place of business by the banker.

This was a lesson learned more than 40 years ago when the terms of engagement were more set by the banker than the customer.

The situation might be appear to be different today but don’t let anyone try to convince you of that. The customer wants to see you on his turf and is pleased to host your visit.

Many of my colleagues used to avoid (perhaps evade is the better word) customer calling with a litany of excuses: takes too long, traffic too heavy, I can make ten phone contacts in the same amount of time it takes to make one in-person business call, etc.

The future seems relatively similar to me as the past I’ve lived and worked through. The customer wants what I’ve got in terms of contact and business input so long as I’ve got something useful to say.

To help you must hear, to hear you need “ear”

As noted earlier, experience is not knowledge. But how much experience is enough to be credible? 

No doubt more is better. I was probably a more skilled father with my fourth child than my third and certainly than with my first. But successful bankers whom I know are good learners and invariably, they are good listeners.

For good listeners, learning becomes cumulative. For persons with a tin ear, learning is linear.

Pay attention to signs of pushback by customers who are unwilling to forego the contact with the banker. You’re the one he or she wants to see if you have anything intelligent to offer. And if you can listen, you are already ahead of the current crop of bankers who feel that technology is the answer to everything.

One other thought. If something seems counterintuitive, maybe it is in this day and age. Pay attention.

Ed O’Leary

Banking Exchange Contributing Editor Ed O'Leary, a veteran lender and workout expert, spent nearly 50 years in bank commercial credit and related functions, working with both major banks as well as community banking institutions. His last job before retiring was as the CEO of a regional bank headquartered in Alburquerque, N.M. He earned his workout spurs in the dark days of the 1980s and early 1990s in both oil patch and commercial real estate lending. O'Leary began his banking career at The Bank of New York in 1964, and worked at banks in Florida, Texas, Oklahoma, and New Mexico. He served as a faculty member and thesis advisor at ABA's Stonier Graduate School of Banking for more than two decades, and served as long as a faculty member for ABA's undergraduate and graduate commercial lending schools. Today he works as a consultant and expert witness, and serves as instructor for ABA e-learning courses. You can e-mail him at [email protected]. O'Leary's website can be found at

In mid-2016 O'Leary's "Talking Credit" blog received a bronze excellence award for the Northeastern Region from the American Society of Business Publication Editors.

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