I have become hyper aware of two contradictory narratives about banks since joining HelloWallet. The first is the populist narrative that banks are evil and gouge consumers with useless fees from ATM charges, overdraft fees and interest rates. The narrative is not new, but HelloWallet has increased my interest in the details and they are stunning. For example, the overdraft checking fee ‘market’ – yes there are people who call it a market – is $31.5B a year according to Fortune. By random contrast, Google generated $37.9B revenue in 2011 with 56,000 people innovating, manufacturing and patenting cool software. How a similar-sized revenue stream could exist from shady bank practices and bad money management behavior confounds my Horatio Alger-like view of capitalism.
The second narrative stands in stark contrast to the first. This self-constructed narrative asserts that banks are exciting and empowering. Capital One will summon super powers from your wallet to fight Visigoths and Chase helps prodigies elevate to super star athlete status. My favorite, Citi bank Private Pass, transforms a man recently dumped by his bored girlfriend into a cool guy who hangs out with Alicia keyes and Giada De Laurentiis. “Who’s boring now?” Citi triumphantly asks. I suppose if Citi is enjoying the spoils from the multi-billion dollar overdraft market, the least they can do is splurge for a date with Alicia Keyes for one of its hapless customers.
I want banks to be boring –like the Bailey Savings and Loan from the classic movie, “It’s a Wonderful Life.” Responsible and boring. I realize banking is a commodity market and Alicia Keyes represents clever and competitive marketing. But the cool banking narrative seems audacious when compared to the details behind the first evil bank narrative. And at a time when the application of behavioral science to end temptation and improve bad behavior is hitting the mainstream, it seems like there are better ways to address that first narrative than distracting from it with pandering and fantasy. Help people grow their money, avoid fees and understand the trade-offs of their banking decisions rather than offering new temptations. Of course, I am biased, because at HelloWallet we believe that thoughtfully applied behavioral science is the future of money management and pretty cool. What do you think, Alicia Keyes or Jimmy Stewart?