Bad Process Drivers - or Why the banks suck at looking after their customers

(This is the second in an occasional series of posts recounting real life process issues I have encountered)

Question: Which of the following are good reasons for having an activity in a customer facing process workflow?

1 Legal requirements
2 Governance requirements
3 Value added processes
4 Internal needs

There could be lots of debate over this but I suspect the one which is least likely to be debated is the last one - Internal needs.

Having customers jump through loops to satisfy an internal requirement is - in my opinion - very bad process design. And unjustifiable too.

Let me tell you a story to illustrate my point.

The Bank Job

For almost thirty years now I have been a customer at one of the big four UK high street banks (No names, but Julie Walters might recognise them) . I opened my first account at my local branch and have stayed with them ever since, despite the fact that I moved away from the village I grew up in and moved abroad. Over the years things have changed. The local branch became part of the nearby city branch. The local contact number was replaced by a centralised country-wide support function and I lost the personal touch with the branch. But things continued to function appropriately with my account.

Then about three years ago I opened a business account.

I didn't want to open a business account. I actually wanted another personal account that I could use to keep my 'sole trader' things separate from my 'regular' things. I ended up being contacted by my nearest branch who mandated that I open a business account for this. I didn't want to do this but they insisted it was the only way. So I did. I filled in all the forms, provided documentary evidence of who I was and what I was doing (despite having been with the same bank for almost thirty years), and even had a telephone interview with my 'personal business manager'.

All so that I could give them my money.

Being a business account of course meant that I was now subject to bank charges: charges such as transfer fees, monthly account fees and - my personal favourite - the deposit fee. This is where the bank charges you a fee to put your money into your account.

I grumbled silently about these fees, realising that they were an integral part of having a business account and for three years we carried on with barely an issue.

Until last month.

Last month I decided to incorporate my business. I wanted to change the legal status from a 'sole trader' to a 'limited company'. This involved registering with Companies House in the UK, and getting an official company name and number.

Unfortunately the name I was using for my sole trading activities was already taken as a limited company so I had to take a different name. This wasn't a problem for anyone. Until I tried to change the name on my business bank account.

Initially I went through the central help desk number I mentioned earlier. They told me changing the name was no problem and I had to pass it on in writing to my business manager at my local branch. Details of this individual were provided and I duly forwarded a letter to him with all the details.

A week later I received a phone call from a lady at the branch. She had received my note and was calling to tell me that I couldn't change the name on the account and that I would need to open a new bank account. I asked her why and she said because your new company is a different legal entity and couldn't have the same bank account. I asked her why a different legal entity needed a new bank account given that the new bank account would be identical in all respects to the old one except for a name change. She repeated her previous statement. I pressed her again on why I - as the customer - had to jump through the bank's hoops for something as simple as a name change. She had no answer to that other than to say she was unable to change the account name.

On top of that this was not a change that could be dealt with over the phone and I would need to come in to the bank for an interview. I told her I would be in to see her on Saturday. But she didn't work Saturday. I told her I was working outside the local area during the week and was unable to get there except on a Saturday. She arranged for someone local to my place of work to contact me with a view to me being interviewed during my lunch break.

The following week a pleasant sounding young lady from the local branch contacted me and said she had been told I wanted to open a new business account. I told her no I wanted to change the name on my existing business account to something different. She said I couldn't do that and would need to open a new account. I asked her why. She couldn't tell me exactly why. I asked her to put me in contact with someone from the branch who could explain it to me. She said she would have somebody call me back.

A little later I received a voice mail which basically said the following "There is no legal reason why you need to open a bank account however the bank needs you to do this for internal reasons".


So coming back to the question at the start of this literary missive: what is the one reason not to add an activity into a customer facing process workflow? Internal reasons.

In this case the bank had mandated that the change in status from a sole trader to a limited company had credit risks associated with it which would need to be mediated. But rather than mediating these risks internally and then changing the name of the account, they had decided that the paying customer would have to open a new account. The steps the bank would need to take would be identical in both cases. The only difference is that once approval had been given the bank would then create a new entry on their systems rather than updating an existing one. This adds no value at all to the customer - indeed it takes value away because now I have to update my bank details with places that I may have given them to already. Don't get me wrong, I understand that there are things which need to be checked, validated and confirmed when limited liability companies are concerned. I understand that the bank as a fiduciary duty to try and minimise the risk to itself and the potential for fraud and loss. I just don't understand why - if it has to do all this anyway - it can't do it on an existing account rather than a new account.

My final thought on the subject was this "If I have to open a new account for this business why should I open it with your bank? Why don't I go to one of your rivals?"

One more example of bad process losing business for a company.

This is an example of a phenomenon known as Hutber's Law which states that 'improvement means deterioration'.

How many unnecessary internal process steps do you have in your customer facing processes?

Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.

All information is Copyright (C) G Comerford

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