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Ethics of the “last mile” of bank service

In the event, does your bank deliver?

“There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. He aims to fix that. “There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. He aims to fix that.

Telephone companies call it “the last mile.” This is the final connection between the recipient and what may be multiple providers of a particular service. It’s how the service is delivered.

What makes this so valuable to a phone company is the fact that it is the “pre-wired” or last link in a particular technology for receiving or delivering a particular service. It’s not necessarily the only way “in or out” but it’s more often than not the established way.

But the channels, as important as they are, cannot guarantee in and of themselves a successful and satisfactory transaction. There is a performance component to a successful outcome.

Bankers sometimes overlook this basic fact. In the rush of the typical workday, volume and activity become the reference points of how we’re doing and scant attention sometimes is paid to the quality of execution.

What does “great service” really mean?

If any of you have ever had input into or helped craft your company’s mission, vision, and values statements, you’ll agree with me that the words are important. They are meant to convey a sense of the business opportunity at hand.

But what do all these words really mean?

We may choose the words. But the recipient, our customer, defines the success of the encounter.

We’re in a service business. Everything we do is fungible with the sorts of things that other banks our size and in similar business lines do. So how am I different from you?

Well, there could be some proprietary aspect of what we do and who we are. We have intellectual property assets such as trademarks and copyrights. These do differentiate us properly from our competition.

But in the big picture of things, it’s the way we deliver what we do to the end user that ultimately and definitively differentiates us from all the others.

Watch out for disconnects

The older I get, the more struck I often am with the significant disconnects I see between what we say and what we do.

Stop for a moment and think about the significance of that statement. That’s really beginning to sound like a definition of ethical behavior.

• Do we do what we say?

• Do we deliver what we promise?

• Are we who we say we are?

If we’re really serious as an enterprise, we should consider the differences in outcomes between what we say (promise) and what we ultimately deliver. If the variances in service produce a level of significant dissatisfaction in the customer, then we are compelled to examine our behaviors.

To the extent that any shortfalls in what we deliver versus the customer’s reasonable expectation derive from our voluntary activity—something we knowingly have failed to do—then we have entered the arena of ethical behavior.

Certainly not every aspect of customer service can be considered as within the sphere of ethics.

But what troubles me in this day of suspicion and mistrust in a vast array of human interactions, personal and commercial, is the way we are so casual about our customer service.

Just because we say in our Values statements that we value customer service doesn’t make that statement factually correct.

Making it so requires resources to become reality—training, monitoring, incentives, and sanctions … and a strong management hand. Just because the advertising copy in our ads tout our “great customer service” doesn’t mean that we consistently deliver it.

We seem at times to blur our understanding of fact versus fiction.

Keep the faith at the last mile

My urgent point is that we must align our pronouncements with our actions. And frankly, we often don’t.

The crux of the matter: Are we simply careless and inconsistent in our execution? Or have we failed to make the willful commitment to perform at the level of our promises?

If these disconnects didn’t regularly exist, there would be much less for the Consumer Financial Protection Bureau to do.

If the anatomy of poor customer service can be reduced to a simple idea of “broken promises” then we have entered the realm of ethics.

Every customer interaction on our part can be likened to the traditional phone company’s last mile. We own it and we own the result. Poor customer service has its own sanctions in the form of customer attrition.

But if we as owners, directors, and managers approached the universe of customer service as ethical activity—doing what we promise to do to the best of our ability—only then can we truly say that we have begun to address the insidious problem of reputation risk.

If we’re not credible in the mainstream of our mundane activity, how are we to restore the public trust?

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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