Your bank is a retail outlet. As you walk in the front door of your bank it is the same as walking into your favorite retail store. In fact, complete with salespeople waiting to introduce you to their latest offerings. Unbank.
Record Profits
In recent years banks have consistently reported record profits and while doing so have increased our exposure to debt globally.
Unbank Means Thinking Differently
If you were taught by your parents that the banker is someone to trust. Possibly, someone who can help you someday. Further, someone who can provide sound advice on how to manage your money. You must begin to think differently.
The bank representative or personal advisor you deal with at your branch is getting commission for each of the products you sign up for. In fact, they will be happy to set you up with chequing (checking) account, high interest savings, safe deposit box, mortgage, line of credit, equity loan, and credit card. Actually, even an investment account.
These are the products your bank sells that you can see.
Security in Unbank(ing)
Banks know that the more products an individual has with them the higher the likelihood that that person will stay with their bank.
This provides the bank with security and greater potential for income. Additionally, it leads them to a strategy of cross selling.
Banking is a highly competitive market. The banks cross selling strategy begins with the front-line teller. Keep in mind the cost of acquisition of a customer to the bank is much lower when they sell an existing customer more products. In contrast, to when compared to attracting a new customer.
No Data Collection In The Unbank
While you are greeted and handled by the professionals in your branch the bank will be collecting data on you. This data will help the bank to understand their customer. Moreover, tailor their sales strategy to you in the form of products, services and offers. Your bank may also be selling your data to leverage other lucrative partnerships. Indeed, a product they sell that you can not see.
Unbank(ed) Goals
Most banks tailor financial advice to you, their customer, using short surveys that help them understand your goals.
This aggregate data collected from customers can assist the bank in tailoring company strategy and future products to their customers’ needs. Just like any retail outlet that incents a customer to complete short surveys. In consequence, this helps the business generate insight into customer needs and desires. Indeed, this is marketing strategy.
Recognize What A Bank Truly Is
And so, this can help you tailor your financial decisions in a way that helps you gain and/or remain self-sufficient financially.
In some ways, banks are predatory in nature.
Generations of people have been taught that banks can be trusted. Moreover, if you need financial advice see your banker. Additionally, even taught your bank is there to help.
The bank will certainly help you get the highly leveraged mortgage when your career and earnings stabilize. It is true, they will call you just before Christmas to offer you the amazing gift of a blend and extend on your mortgage interest rate. Actually, failing to tell you the fine print that will affect the penalties associated with the new terms.
They will help you borrow against the equity in your home to buy that boat you just must have this year.
First, this is not help. Secondly, it is feeding an addiction. Finally, it is sales.
We Are All Addicted
We are all addicted to (currently cheap) debt. And, our trusted banks have learned tactical sales skills. In fact, skills that allow them to insert a financial tap into your arm to they can monitor your pulse. And, offer you that next great product when the risk exposure works in the banks favor.
We need banks, and banking products. We need to be informed and defensive to ensure we have input into our financial future.
If you really want to be financially independent, unbank.
Build your financial knowledge and experience. Moreover, make your own informed decisions. Indeed, recognize that you can purchase some exciting products at the local bank next time you are on a spending spree.
The more financially independent you become the more desirable you are as a banking customer. You are the thing of value in this relationship. Consequently, the less you need a banks product to realize your dreams the higher your value to everyone.
Additionally, all of our posts in the Personal Finance Series can be found here.
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