Kristin R. MoyerA brilliant colleague of mine, David Furlonger, challenged my hypothesis that lenders should focus on rebuilding customer trust (see previous posts here, here and here). Blasphemous? Maybe not.
His point is that in a market with low to no credit growth, customer trust is a moot point. There are few alternate suppliers of credit in an environment like this. Customers are essentially locked in with their current lenders – in fact staying with a bank can actually improve the chance of getting a loan dramatically. For example, one bank told a colleague that they would not lend to anyone who isn’t an existing customer.
Some markets, like the US, are simply not in a position to address customer trust beyond government oversight and requirements for more transparency.
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1 response so far ↓
1 Jeff Mowatt August 24, 2009 at 1:49 pm
I’m not familiar with how it was in the US at the time I first went for a mortgage loan, but this was very much the scenario for us in the UK. How long one had been a saver had great influence on success.
These were the days in which the mutual societies flourished.
Then in a feeding frenzy to compete with traditional banking, they demutualised en-masse to gain access to money markets.
As the credit crunch arrived, requiring massive government support, what had once been rock solid institutions, we published our manifesto for an economic paradigm measured in terms of benefit to people, rather than profit based on abstract numbers.
http://www.p-ced.com/about/background/