-Caveat Lector- from alt.politics.media ----- As always, Caveat Lector. Om K ----- <A HREF="aol://5863:126/alt.politics.media:93515">END OF BANKING & CASH FOR 'LOSERS'</A> ----- Subject: END OF BANKING & CASH FOR 'LOSERS' From: Secret Squirrel <[EMAIL PROTECTED]> Date: Tue, Jan 26, 1999 8:10 AM Message-id: <[EMAIL PROTECTED]> ====================================================================== SCAN THIS NEWS 1/24/99 Big Bankers Plan Your Electronic Financial Future Not Everyone's Going to Like It "Where are no-frills customers to go? Well, biometric ATMs may be an option. They identify users by fingerprints, facial dimensions or distinctive marks in the iris of the eye." -------------------------------------------------------------- "In the brave new banking world, the 'unprofitable' customer will find that bankers don't want you -- or your money..." So states a banking industry publication in their report which tells how mega-bankers are developing programs and systems that will, for many classes of people, mean the end of traditional banking altogether. The CEOs of the mega-banks were sweating out the details at their Las Vegas-hosted convention in December of 1998. The focus: How best to transition the country to a system of totally electronic commerce without instilling rebellion. Many of the "finer points" of their plan have now been revealed thanks to the bankers symposium. Under the electronic banking system of the future, only the rich and well-to-do will have access to traditional bank services and accounts. According to the January 1999, Bank Rate Monitor article entitled "Big Banker is Watching," several software companies have unveiled new programs tailored specifically for the banking industry's future needs. The programs, known as "Customer Relationship Management" are designed to monitor almost every detail of each and every customer's financial activity. With this tool, bankers can quickly and easily weed out the unprofitable ones, and zero in on the ones they want to tap. Little will be left to chance with these CRM aces up their sleeves. For example, Epsilon Software Development Company has developed their version of CRM programming which, the article states, will "change how you interact with your bank -- or whether you interact at all." Some of the other major players in the CRM game include AT&T, IBM, Unisys, Diebold, FairIsaac (who alone generates half the 4.5 billion credit reports in the U.S. annually) and Microsoft -- all of which demonstrated CRM products at the Banking Administration Institute summit. According to the article, in the "CRM-ruled future," consumers will bank almost entirely via phone and the Internet. The few bank offices that remain will operate like car dealerships, staffed by sales reps, not tellers. Bank employees will get a commission for each mortgage, loan, or investment portfolio for which they close a deal on. Sales reps will use CRM software to identify profitable customers by analyzing such factors as the customer's salary, age, marital status, debt, number of jobs and residence changes, education and property owned. New customers will supply detailed data in order to open an account. Established customers will routinely update their data so that the CRM program can track - and predict - their "changing luck." Of course, it will all be "voluntary;" anyone who does not "volunteer" simply will not get service[d]. Data will also be collected and shared throughout the rapidly expanding system of credit bureaus and data-warehouses. According to the Monitor, customers identified as "losers" by the CRM system "might" get checking accounts -- but only at a price. First Manhattan Consulting Group's executive vice president Seamus McMahon is quoted as saying, "you charge them higher fees because you don't want them -- make them know they're not welcome." The article goes on to say: "Unprofitable customers will pay an additional price in terms of service. Each time a customer calls or emails a bank, the sales rep need only type his name to view his CRM profile. 'You answer the cash cows first,' said McMahon. 'The losers can wait 20 minutes if they call in a question. The losers will just make you drown.'" Banks of the future will want to make a profit off their more affluent customers through cross-selling a variety of banking-related products, and CRM will facilitate their capitalizing on that potential. The CRM software will alert bank sales reps when a profitable customer buys a new business, so they can pitch employee insurance, pension plans or corporate credit cards. And, with "facial recognition" surveillance cameras installed at each of the bank's entrances, they'll "know" their "target" as soon as he walks through the door. A company called "FairIsaac," (perhaps best known for its credit bureau rating system), has developed software that can notify the bank officials when a profitable customer has a baby. As part of their service, it will email a balloon-festooned Congratulations! while the bank mails out home improvement loan applications with photos of nurseries attached. I guess this adds new meaning to the phrase: "There's a sucker born every minute." Likewise, if there is a loss in the family, the CRM software could trigger an offer for a small loan to cover funeral costs. Talk about targeted marketing! As reported by the Monitor, one of the leading Internet and database consultants for bankers, Oracle Corporation, has suggested collecting more than just demographic and geographic data about customers. It recommends a CRM that warehouses "psychographic" data: hobbies, political opinions, magazine subscriptions and "actions," including clubs joined, recent purchases, restaurants and designer boutiques frequented. The article says that, attending bankers were "giddy" about such possibilities. The Las Vegas atmosphere apparently allowed the bankers the opportunity to loosen up a bit about their true feelings towards customers. The Monitor states that, off the record, most bankers were blunt. Banks don't want a no-frills checking account customer whose average balance is less than $1,000 and who pays his low interest credit card debt in full each month. Unless he's paying off a loan on a Lamborghini or a mortgage on a mansion, he'll be treated like an unwelcome poor relation. "Raise his ATM, credit card and account fees till he leaves" is McMahon's advice. Large banks consider small-time customers to be a loosing proposition. In fact, "they may prevent such troublemakers from opening accounts in the first place," according to the Monitor. To help with the "weeding out" process, some banks are already using computer database systems such as the one developed by "Debit Bureau" which tracks consumers' check-writing histories. Debit Bureau even downgrades a customer for reports of lost or stolen checks. Additionally, Debit Bureau produces what it calls "household-specific demographic data," which potentially could be used to identify low-income neighborhoods. Some have raised concern that this could result in discrimination against targeted social and ethnic classes who don't "profile" well in the CRM system. Of course, with "direct deposit" now being mandatory for all federally-funded welfare, unemployment, AFDC, and foodstamp transfers, there's really no need for a bank in the 'hood anyway. Poor blacks, Hispanics, and white trailer-trash will have better chances at winning the lottery than at obtaining a loan from one of the new bread of high-tech, CRM-savvy bankers. Most banks have already begun the demeaning practice of fingerprinting walk-in customers as the first step in driving away the unwanted. The pressure to filter out unprofitable customers will be great. According to the article, "Bank tellers who ignore Debit Bureau's bad grade and open an account for such a customer anyway now may pay with their jobs. On Dec 1, 1998, Debit Bureau added Audit Report to its software repertoire. Audit Report notifies a bank teller's boss when an account is opened notwithstanding Debit Bureau's identification of the customer as a high risk." But don't be discouraged if you're not of the privileged class, there's a special place within the new banking system for the outcasts. The article concludes: "Where are no-frills customers to go? Well, biometric ATMs may be an option. They identify users by fingerprints, facial dimensions (Mr. Payroll) or distinctive marks in the iris of the eye (Sensar). Once a person is in the database, he can cash his paycheck at a biometric ATM for a fee of 1 to 3 percent of the check total. Biometric ATMs are being upgraded to issue travel checks if a customer doesn't want to lug a month's cash earnings home on the subway." --------------------------------------------------------- "Know Your Customer, in the Biblical Way," should be these bankers' new friendly motto. But don't think of them if you really NEED the money, your odds will be better with the lotto. ------------------------------------------------------------------ Big Banker is Watching http://www.bankrate.com/brm/news/bank/19990122.asp ------------------------------------------------------------------ [Thanks to Mike Beasley for supplying this link] ======================================================================= Don't believe anything you read on the Net unless: 1) you can confirm it with another source, and/or 2) it is consistent with what you already know to be true. ======================================================================= Reply to: <[EMAIL PROTECTED]> ======================================================================= To subscribe to the free Scan This News newsletter, send a message to <[EMAIL PROTECTED]> and type "subscribe scan" in the BODY. Or, to be removed type "unsubscribe scan" in the message BODY. 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