An interesting example of the exercise of people power has come to light over the past couple of weeks. It concerns a disagreement between the banking giant HSBC and a number of their student and graduate customers. For a number of years, as an inducement for students to open an account with the bank, it has offered a facility whereby overdrafts run up whilst at college – up to a limit of about £1,500 to £2,000 – are left as interest free loans for a short period after graduation – generally no longer than two years.
This is part of a tactic to attract the custom of graduates, who, over the course of a lifetime, are unlikely to change banks and who are likely to generate a stream of profitable business for the bank (checking accounts, mortgages, insurance, pensions, savings, investments, wills & trusts, and so on). It is a common marketing tactic amongst the UK retail banks.
In July, the HSBC announced that it was to withdraw the facility with immediate effect, even for existing customers who had opened accounts on the understanding that there would be a facility after graduation, and who had relied upon that inducement in placing their business with the HSBC to begin with. The story came to our attention through a report in the Guardian (read report).
The student body, galvanised by the National Union of Students, and using Facebook as an organising vehicle, planned a campaign to protest against this unilateral change in their banking arrangements. The idea was to use the smart mob to clog up the banking facilities of the HSBC in selected cities across the UK. The protest would be non-violent, and would consist of several hundred students all turning up at a selected branch, at the same time, and querying the notice of charges sent to them as customers. It would generate a fair deal of negative publicity – particularly as the HSBC brands itself in the UK as ‘the listening bank’.
In the face of this, according to the Guardian (read report) the HSBC has relented and has scrapped the plans. The NUS are claiming this as a major victory of the small guy against the corporate world (see link). This may be a bit of an exaggeration, but the tenor of the claim is in the right direction.
In the UK, for many years, the retail banks have treated their customers with complete contempt. They realise that, in modern society, not to have a bank account is to become a non-person, who cannot be paid a salary and who cannot receive state benefits. The banks are in an oligopolistic position, and it is often alleged that they abuse this market power to the detriment of their customers. Indeed, there are now so many cases before the courts where customers are suing their banks for alleged unfair and illegal bank charges, that the judiciary are complaining about how the volume of cases is starting to paralyse the Small Claims Courts.
We see this as part of a longer trend – one that large corporations need to heed. The communications revolution and the internet have delivered a vehicle to activists to organise a campaign against companies. Turning this around, as a futurist, we now ask companies what they would do if 80% of their customers turned up to their outlets at the same time, on the same day, to complain about poor service or to return allegedly faulty goods. Or to call the Chairman’s office, or the company’s auditors, or the company’s bankers, and so on. The new technologies have given the customer a new voice.
I wonder how many organisations plan for this Wild Card.