We’ve all had to endure help desks or the ironically named “customer service officer” when trying to resolve an error, a fault, a bill error or some other issue. Usually, after going through a frustrating automated menu, with the repeated message beginning with the lie “you’re call is important to us…” you’ve eventually reached the limits of authority of the poor jub you’ve just explained your issue to.

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual – Galileo Galilei

The dreaded words are uttered, “I just have to transfer you to…”, then crickets and around 30 seconds later you begin your explanation all over again. If you’re lucky, this process is repeated only a few more times before you hang up in despair and frustration. You write emails or letters, make more calls and write more emails. You may even write to the CEO of the company that is frustrating you or even your local member of Parliament.

In the end you just give up and contemplate the competition and wonder if they’re any better.
Now those of you that know me will think this article is about banks (it is) – as they are guilty of the above. But the banks don’t hold a candle to the sheer audacity of the telecommunications industry.

Anyone who has attempted to contact Telstra, will tell you how excruciatingly polite and patient the staff in the Philippines are. They will also follow up with, they couldn’t help.
As someone who has been battling Telstra for almost 10 years, I know how the problem can be easily resolved.

Give the people that answer the phone authority to resolve our issues…and put a contact email address on your bills so customers don’t have to go through all that pain.

Fantastic service without authority is useless. It’s a waste of time and money.

Banks are also guilty of this. But it’s not their fault. Here are the two critical reasons as to why they’ve evolved into these bureaucracies.

  • Basel III; and
  • Sarbanes Oxley

In the past, good, experienced bankers had authority to approve transactions up to a certain amount. As an analogy to prove my point…at one stage I had joint authority (with a senior credit manager) of up to $500 million. That was in 2005.

In a later role (2013), I had authority to approve a maximum of $500,000. So heavily conditioned that it rendered even that meagre authority useless.

In fact, I recall approving a cash-secured bank guarantee for a client at Christmas-eve one year for an amount less than $100k (remember the client posted cash as security for the entire amount of the guarantee which they couldn’t withdraw without the bank’s approval).

Early in the new year I received a letter of reprimand for exceeding my authority.

Why have we travelled so fast to this point? The GFC changed everything. In finance, bankers speak of times pre-GFC and post-GFC. It was the most profound financial event in a century.

Globally, governments were brought to their knees as their banks collapsed. Nations were rendered insolvent. It was a biggie.

What is as momentous is the reaction by regulators and central banks to the GFC (that re-action has been ongoing now for six long years and it appears has no end in sight). Basel III was born and banks had to play ball. All authority was cancelled. All innovation was stopped. So how did this trickle down to the humble call centre? Well it shouldn’t have.

For that you have to blame something called Sarbanes Oxley or SOX. This gem was the US senate’s response to the massive collapses leading up to the naughties (such as Enron and Worldcom). SOX introduced more stringent requirements for company boards who in turn (fearing jail time) implemented non-sensical and militant regimes of compliance into every level of their listed companies.

Common sense was abandoned for the now ubiquitous tick-a-box approach to assessing compliance risk. Any company doing business with the US had to play ball – all our major banks deal with US entities (a lot of funding is raised from the US) and they all have a presence there.

See, I told you it wasn’t the banks’ fault. Blame the US senate and European central bankers. I’m only half joking here.

Cast your mind back to the GFC years. Australia had a few high profile corporate collapses as liquidity dried up and banks pared back lending. Massive write-offs ensued as the banks’ loss reserves were boosted (most of which were reversed in later years). Banks found it difficult to refinance their wholesale funding facilities from offshore. The federal government guaranteed banks and all was well again.

With Basel III, our regulator (APRA) – who until then had been held up globally as a model of bank regulation – went nuts. It imposed stricter interpretations of Basel III on our local banks with greater capital requirements.

Remember, our banks weren’t in danger of collapse (as far as we know).

APRA’s heavy handedness has not ended there. More recently, it has severely restricted the flow of funding to retail borrowers with the well publicised restrictions on mortgage lending. It appears as though APRA is trying to manage the economy (which has traditionally been the role of Treasury and the Reserve Bank – although you could argue that APRA is a tool of Treasury).

So how do you overcome all of this frustration? You can’t. However, you can reduce it and for that there’s only one way…outsource it. Talk to an independent broker that has no affiliation to one bank or another. If you’re in business, they will even introduce you to a good banker that will shield you (as much as is possible) from all of the above.

Me? I’m still wondering why Telstra does what it does and gets away with it.