A frustrated bank leader sat alone in her office amidst stacks of analysis showing the slow erosion of the net interest margin – once the bank’s engine of profitability. The leader had watched the margin ebb like the wick of a burning candle, despite the monthly efforts from skilled advisors and analytical staff. New target marketing with better data analytics had been bringing in new customers and doing it cheaper than the former “shotgun” approach of broad media advertisements, but margin stubbornly refused to grow.

To be alone with thoughts, the leader avoided the lobby patrons and slid quietly into the rainy evening finished with work. Walking head down deep in thought, the leader didn’t notice the dark figure ahead until it turned, stopped, and blocked the way.

“Forgive me!” exclaimed the leader. “I almost ran into you in all this rain!”

“I am here to answer your questions,” said the man with the black overcoat under a splattering umbrella dome.

The leader’s tired mind lacked the energy to fear this strange apparition, and besides, the hint of a genuine smile calmed the leader’s tangled thoughts. “Okay, I’ll play. You can answer any questions?” The leader focused on the small dots of glint that were the man’s eyes. They hung there with such authority that the leader carried on with, “Then how do I make the margin rise?”

“What is a margin?” asked the man.

“Oh brother, I thought you knew the answers!” said the leader, now looking for a path to squeeze by this odd person standing in the rain. But the man’s gaze pressed down, waiting patiently as the symphony of pattering raindrops played their murmuring tune. “Fine. I am talking about the net interest margin. It’s the gap between the rate we charge borrowers and the rate we pay depositors.”

“You’re talking about people, right?” asked the man.

“Not all – some are businesses,” the leader said.

“Are the businesses run by people?” The man smiled.

“True,” the leader sighed.

“Then you must capture the hearts of those people, and they, not you, will grow your margin.”

The leader laughed. “Oh, you know so little about banking! We manage our margin with complex analysis of rate sensitivity and detailed customer demographics run through massive algorithms to calculate the next-best-product for our balance sheet. We choose our targets with sophisticated data analytics powered by artificial intelligence, then unleash a personalized digital targeting and retargeting campaign to lure them in!”

“You love your company, that is honorable. But do you love your customers? Most importantly – do they love you?” the man asked.

“We have excellent products, top people, and superb systems,” the banker retorted.

The man nodded. “I see. Then, you do not need me.” The man turned to walk away as he said – “But I thought you wanted your margin to rise.” When only the outline of his black coat remained, the leader heard, “You must earn their hearts, to earn their wallets.”

Nearly shouting into the darkness, the leader added, “But I can’t just give everything away to make them love us!”

“Love is behavioral, not monetary or mathematical. Your customers do not care about your analytics. People who love you pay more than people who do not,” echoed the man back.

As the leader paused in the dreary night, some faint words floated to her from the gloom that the man disappeared into. “…the educated banker knows how to sell … the successful banker knows how to love – an be loved.”

By Gren Blackall – writer, a retired banker, and deposit analyst

Published: 02/07/21 Author: Chris Nichols