Friday, April 25, 2008

An Attachment to Analogs and Antiquities

The biggest banks in the world are reeling from losses brought on by the mortgage crisis. Many are struggling to maintain their stability in the face of the global impact on financial markets, where the erosion of share prices have wiped out investments and expected margins. But in the small town of Oakwood in east Texas, America's smallest bank goes about its day-to-day business the same way as it did more than 30 years ago. The Oakwood State Bank uses analog equipment, typewriters, manual posting of transactions, and employees that would have been retired more than a decade ago.

Oakwood used to grow cotton. Today, it is simply known as a town that used to be. All the businesses that thrived there decades before have disappeared. Its 84 year old President R R Wiley doesn't mind being an institution capsulized in time, in the 1970's to be exact; and he seems proud of the fact that the bank is an old world bank, "we're run by antiques" he proudly quips. George Solomen, a data processing salesman has tried selling computers to the bank for 20 years, but he concedes that his failure had caused him to root for this last holdout against modernization.

The bank has 600 Checking Account depositors, no Savings Accounts, and every statement is manually typed by 75 year old Lela Coates. Posting is done by her assistant, 71 year old trainee JoAnn Bing. Bank President Wiley says no automated voice system can match Lela's voice recognition abilities, and no computer has ever won the hearts of its customers; even if Lela tucks the old posting machine every night and practically prays for it to work again the next morning. The bank's customers are happy with the set up and many have repeatedly expressed that the bank takes good care of their needs.

The ages of the bank's officers and employees may be the single most important factor in retaining its customers because of their knowledge of the nuances of each depositor, besides being of the same age bracket or older. The difficulty of adjusting to and getting used to technology is eliminated, and it gives them the confidence to perform their own transactions without fear of looking silly or being duped. Also, the personal relationships established over many years had developed mutual trust and respect between the customers and the bank's personnel; strengthening the bonds beyond mere business transactions and impersonal interaction.

This ideal situation of antiquated equipment operated by old people for clients as old or older than they are may receive a sudden jolt. The old machines could be orphaned units - parts no longer manufactured nor serviced. Computers may be the only option if the existing machines conk out. The passing away of its "specialists" could impact on voice identification or posting and filing of statements. New employees would have difficulty adjusting to the manual mode while dealing with the customer base who might resent their lack of personal knowledge on each account. They could lose customers!

There is a sense of nostalgia about living in the past and a level of comfort in the stable order of people and surroundings, even if the only thing that's advancing are their ages. The danger lies in the shattering of this comfort level when people pass away or sudden change is resorted to by the circumstance of their conditions. To an outsider, the town's bank might be mistaken for members of a nursing home allowed to perform role playing games in a make believe bank to keep their brains functioning; but the bank is real, the personnel are salaried, and the customers are faithful. Regardless of how stagnant their growth is or how small their profits are, they are still better off than most of the biggest banks in the world. And their income is enough to sustain their simple needs, medication, and health requirements.

There's a lesson here for the "financial wizards" of Wall Street and the technology manufacturers of automated banking systems. This is Banking Anthropology 101, please take out your pencil and paper.



Philippine Updates said...

In the Philippines, I am not sure about Allied Bank. But in the sister company that sells Absolute mineral water, they use age old typewriters and carbon papers. Young employees bring in their own PC's. At our own Dept of Foreign Affairs, Bert Romulo almost blew his top when he saw typewriters in this year's budget. But after an aide said; "Sir, brownouts..."
he grudgingly signed the budget.

SheR. said...

New technology doesn't even prevent the countless scams in banking industry. Why not we just go back to plain ol' paper and pencil for all transactions instead of computers? At least the only form of virus to worry about is flu.

durano lawayan a.k.a. brad spit said...

Hi JC,

This is so hilarious and so Third World!

I'm sure he was stupefied at the Assistant's response, but what can he do? The government that he is a part of has not done anything in the area of energy development.

Of course it's a costly thing and biofuels are being re-investigated as a viable energy source because of its impact on food supply and food prices.

Meralco has raised prices anew, so aside from having nothing to eat, the people will turn off their electric fans, sweat more, need more food, and need more cash to purchase. The increase in minimum wage is too small to satisfy anything, but raising it further will also make us uncompetitive in terms of outsourcing jobs and labor costs.

Maybe we should think of other lines than BPO's. This is not healthy and it puts the future of the Filipino professionals in jeopardy because of lack of sleep, bad food, bad habits, ill advised lifestyles.Frankly, I never liked call centers; and this is the accomplishment of Mar Roxas that he's so proud of? It's bad for our youth and bad for our future. I say we develop newer and better industries. :-) --Durano, done!

durano lawayan a.k.a. brad spit said...

Hi Sher,

This is so funny too.

You're right of course. The technology has even created bigger scams and billions of losses. Then, there's no danger of losing work or work stoppages because of computer viruses.

The flu is the only virus to fear... right! LOL! That's funny. :-) --Durano, done!

Tommy said...

LOL...That was a hilarious post D. It kind of makes one wonder in our technologically "advanced" day and age. Perhaps our rush to automate has left quality and service by the trash can on the way in? Outsiders looking in would never appreciate such a antiquated way of doing business, and my guess is those who run the bank and their patrons could really care less what "outsiders" think....Priceless...


Kim said...

a 71 year old trainee !!!
how heart warming to see these people doing it their way....
I hope that they can hold onto their system Durano....

upyours said...

My brother-in-law banks with an antiquated institution like this. It's not like he has no other bank to choose from. He is a successful lawyer and quite tech savvy, yet he chooses to bank with an institution where the youngest teller is in her late 50's. Some are so advanced in years that their chins quiver like old grandmothers. Making deposits takes at least an hour, withdrawals longer and they all have to be done over the counter. His reason? It takes forever to take money out that nobody borrows money from him. Sometimes they even have to forego meals because of the time spent trying to take money out. In his case it's not so Third World, it's so Ilocano.

durano lawayan a.k.a. brad spit said...

Hi Tommy,

Sometimes it's worth looking into. Technology is supposed to benefit man but a lot of people are being harmed by its effects - there's food, medicines, communication, banking, and marketing.

The impersonal nature of technology has removed a considerable amount of human touch, such that people are seeking more personal interactions as in personal service, problems and difficulties,truthfulness or full disclosure of information that are written or explained in layman's terms. And, more so with automated or computer generated mail which you can't dispute; and call centers who are thousands of miles away from where your problem is. Looking for someone responsible to talk to regarding an issue (Paypal, Google, Alexa) :-) can be frustrating.

The system in this bank may be antiquated but the service and personal relationships are strongest. We may have sacrificed that human aspect for speed, volume, productivity, profit and coverage which was what business is all about: building relationships that last and a loyal customer base. Everything is about change and technology in the fastest possible manner.

We have forgotten the adage haste makes waste.Yet technology has not prevented bigger scams nor bigger losses; bigger health problems and bigger survival concerns; more diseases and more ailments from a stressful lifestyle concerned with mass production and input/output mentality.

To these bank customers, the service and confidence they get, coupled with the trust and respect that go with it is more valuable than any technology that may increase or speed up their "convenience". :-) --Durano, done!

durano lawayan a.k.a. brad spit said...

Hello Kim,

The bank may look like a place from the past like a 1970's magazine, and its personnel may seem like rebels from an old age home, but their customers are happy and the bank is healthy.

Imagine all the big banks (Societe Generale, Bear Stearns, JP Morgan, Citibank etc.,) losing money, but this small local state bank is turning in a profit uninterrupted for the last 50 years.

A look at their financials reveal that their deposits amount to $2 million, their assets are $3.5 million, and their earnings are at $ 1.43 million. These guys are running a healthy operation and are loved by their customer base of 600 depositors.

Compare that to the big banks where their return on assets are negative, and their earnings are also negative - running into billions. And their depositors and stakeholders are unhappy with them. Yet, they are supposed to be professionals and experts in banking and finance.

The comparisons may be a bit unfair but I just love the development of this story and its many valuable lessons in human nature and relationships. It's something most of the big businessmen have discarded because of their insatiable greed and bottomless avarice.

I hope too that they succeed and continue to have profitable operations. And may their systems last to lend more substance to the argument that not all technology is good for mankind - and even those that are good are being abused to the point where it is detrimental to a large number of people. :-) --Durano, done!

durano lawayan a.k.a. brad spit said...

Hi Upyours,

This concern of yours is not about technology, well partly - but more about stinginess! LOL!

The reason he selected a low tech bank was so he would not be the target of relatives or friends borrowing money eh? I suspect he would have another account in some high tech bank for his own needs that he doesn't tell anybody about.

This antiquated bank where he places his money and where the tellers are quiverring due to old age must be paying high interest on savings because of the time it takes to withdraw. By the time your money is withdrawn, it has earned a small interest due to the time gap.

I guess that is to encourage the account holder to give the excess interest to the teller for her retirement fund! :-)--Durano, done!

SheR. said...

And guess what I've lost faith in all the financial institutions.. I haven't had a bank account for more than one and half years. Banks are stealing my hard earned money! Why I should pay them for services when they used my money for investments!!!

Right.. I used to work for banks.. so I pretty much understand how they work. So my concerns are not unfounded...

Let's have a campaign to close all money sucking banks! :P

durano lawayan a.k.a. brad spit said...

Hi Sher,

Both my parents worked in banks and my sister is also a banker, and I understand very much what you mean.

Banks are usurious institutions. The banks were actually started by the Knights Templar, those leaders of the Crusades who controlled all the money of the Catholic Church. They used the money for transactions that allowed people to travel from point to point carrying only a piece of paper where the money deposited in Point A will be withdrawn from a Knight in Point B. At both points, fees were charged - something like today's ATM's on horseback.

The bank charges can be oppressive especially on loans. That's why there are times when I'm not too sorry to read about their losses (mostly because of their own greed) or robberies. :-) --Durano, done!

Tapline said...

Brad,,,,Great Post....This is soooooo New England.It takes me back to the town clerk in her own home doing the towns work. My cousin, the validictorian. Held the highest marks in her class. She was the only student in her class. Life Magizine wrote an article about it.......stay well....

durano lawayan a.k.a. brad spit said...

Hi Tapline,

Your cousin, a valedictorian went back to her hometown to work in some old fashioned entity in New England? When she could have continued in a modern job in some big city?

Well, that is something similar to this story, opting for the old ways of doing things. Did she return because of the beauty of the place, the environment, or was she fed up with the fast paced urban life that's full of stress and unhealthy fast food? Is she still there?

Make a post about it Tap! :-) --Durano, done!