Every year, banks notify us that we need to update our background information for the accounts we opened and deposit our money in. They say it’s a rule of the Bangko Sentral ng Pilipinas or BSP, the governing monetary authority of the Philippines, where I live & work. All depositors must comply to enjoy the bank’s customer services.
That’s not true, of course. The BSP does not require banks to compel their clients to update the latter’s records every year. It is the banks who make such rules which probably originated from their overly cautious legal departments which are then approved by their boards of directors.
Banks tell us that the updating of records will improve their services. This is also not true. It’s the other way around. If we don’t update our records, the bank threatens to make it hard for us to enjoy their services.
The updating of records is a burdensome & time-consuming task. There are always so many requirements to work out. Documents must be signed & submitted. For corporations, notarised certificates & resolutions are needed. It can take up to a month to get all the stuff together. But the banks don’t care. They insist their clients comply, or else.
Banks compel clients to update records because they fear liability if scammers steal from their depositors’ accounts. The updating of records strengthens security measures such as the depositors’ authority for withdrawals and the verification of signatures. Banks would rather put clients through the inconvenience of updating records than to risk security breaches in financial transactions. Scammers and fraudsters are the reasons why institutions such as banks, push for compliance.
Compliance is not service. As much as banks & institutions try to spin compliance as a way of getting good service, it’s not. Whatever benefits there are in complying with whoever’s rules, we as clients don’t get them; the banks & institutions only do.
Compliance is beneficial to the banks, or in general, to the enterprises or institutions mandating it. Service, on the other hand, is for the benefit of clients or customers, aligned with the fulfilment of our needs & wants.
When enterprises or institutions, such as banks, require compliance, they impose burdens on us as clients on top of whatever we already are paying for in prices or fees. We can say that the work we put to comply is a hidden charge tacked on to whatever we’re paying for.
Many enterprises & institutions give a lot of lip service when they say they prioritise service above all else. Nothing could be further from the truth. They don’t. They treat customers like us as nothing more than numbers for statistical measures. Banks see us as account numbers. Airlines see us ticket numbers or as boarding passes. Governments see us as taxpayers with identification codes (e.g. tax IDs, social security numbers). We are just shopping carts of items at grocery check-out lines.
Entrepreneurs have capitalised on poor customer service as they break into markets traditionally held by big business firms. They do so via innovative strategies that get around the barriers the big businesses put up to keep rivals out.
Small upstart banks, for example, have grown big for putting customer service first over compliance. One bank, for example, reduced the number of requirements for compliance while another offered the service to assist clients in preparing and picking up the needed documents. Another bank waived fees for online transfers and added tellers to shorten the waiting times of depositors. These banks grew as clients appreciated the extra mile they invested in for service; some have beaten rivals who refuse to prioritise service over compliance.
But it’s not just banks where entrepreneurs innovate.
The Zoom app for virtual conferences gave us the opportunity and option to not having to go through the inconveniences of air travel to meet with counterparts at different locations.
Ride-sharing services such as Uber, Lyft, and Grab broke the monopolies of taxicab companies & traditional couriers in major cities thanks to the conveniences they provide via their mobile apps and their quick service.
The start-up e-commerce fashion company, Shein, became a worthy challenger to Zara and Uniqlo via its low-price offerings of various items coupled with fast delivery services.
When businesses like banks become big, they tend to sacrifice service for compliance to rules that benefit them more than us, their clients. As much as they may try to rationalise, compliance is not service. We as innovative entrepreneurs recognise this and capitalise on this. We as customers won’t hesitate to switch the moment we could when someone else offers less of a burden for the services we insist on.
Ellery's Essays 