Lessons in Banking: Outsourcing Jobs Overseas

In 2006 and 2007, when I worked as a customer service representative for one of the largest banks in the country, they had already moved whole departments to India and the Philippines and maintained call centers in both countries.

My job involved talking with representatives in these countries and transferring customer calls to them on a daily basis. Most of these overseas employees spoke good English and were courteous, competent, and well educated. Unfortunately, they were subjected to more than their share of verbal abuse from customers and disrespect from fellow employees in the U.S.

I have worked for the past five years at one of the largest credit unions in America. They don't outsource jobs overseas and I don't think they ever will. I don't know of any credit unions who do.

But I also know that the global economy is a reality that is not going to go away. Big business is going to keep outsourcing jobs overseas and it's unrealistic to expect our government to stop them, although every election year, the rhetoric seems to suggest otherwise.

That said, I think issues of taxation and regulation of business should be considered on their own merit or lack thereof. I don't buy the assumption that if big businesses have more money to spend, they are going to spend it creating jobs for American workers.They may and then again, they may not.

Lessons in Banking: Personal and Political

My first series of posts, Lessons in Banking, has been written largely to help me articulate and process for myself the ways in which my short-lived career at a large bank impacted the way I think now about big business, the financial industry and government regulation. I had spent most of my adult life as a stay-at-home mom and spent many years helping my self-employed husband in his small business. 

I've worked for two other companies for longer than I worked at the one I've referred to TBTF (To Big To Fail) Bank. One of them was a true "small business" with about twenty employees. I've been working at one of the largest credit unions in the country for the past five years now. 

Nowhere else have I witnessed  the intense concentration of greed, deception, denial and lack of accountability l that I observed in less than two years working at a low level position in one small corner of one of the world's largest banks.

I never felt comfortable being associated with TBTF and had frequent little crisis of conscience while working there. In 2006 and 2007 my concerns about TBTF were limited to how their practices impacted their own customers and my own conscience. 

Headlines from fall of 2008

 

What was not on my radar at the time was how TBTF Bank and other huge banking corporations like them had the power to cripple the US and global economies, bring financial ruin to people and families far beyond their own customer base and to exert huge influence on our elections and elected officials. I still am far from astute in my understanding of business and economics, but I did come out of the experience with some personal and hopefully humble opinions. 

By the time the sub-prime mortgage crisis came to a head and the economy was in crisis, I had left TBTF Bank of my own accord and had been happily employed at the credit union for almost a year. As economic events unfolded in 2008 and beyond, I often looked back and tried to process what I observed at the bank in 2006 and 2007 in light of the bigger picture. 

As an American citizen, I think it's important to remember all businesses are not created equal. The words, business, government regulation, pro-business often seem to be thrown around rhetorically with no distinction between sizes and types of business. Some of the rhetoric would convince us that any government regulation of business is inherently wrong. In my opinion, businesses large enough to wield destructive power over our nation and the world had better be held accountable and there is no one to do that other than a government elected by the people and for the people.

October 2009

 


 I hear and agree with warnings against placing our faith in government, but is "In Big Business We Trust" a better option? People who trust in God should recognize both other alternatives as forms of idolatry. 

And as citizens of a democratic republic, we have more influence over our government than we do over multinational corporations, although even that is being diluted as their  influence in government grows. We do need healthy businesses unhampered by unnecessary regulation, but I have come to believe that some government regulation, especially of  large and powerful businesses, is absolutely necessary.

Lessons in Banking: Feeding Frenzies

When I worked at the TBTF (To Big To Fail) Bank customer service call center, mortgages were king in the couple years leading up to the economic meltdown in 2008. Customer service representatives were under pressure to convince callers to open and apply for all types of new accounts and loans with a big emphasis on mortgages and home equity loans. 

We earned commission for each new account we could convince a customer to open. After mortgage loans, checking accounts were especially profitable, probably because fees associated with them were a big source of revenue. Even if the customer never used that checking account and ended up closing it with a zero balance, the rep who convinced them to open it would have already received their commission. 

Nobody in management would have ever admitted that checking accounts were opened without a customer’s knowledge and consent, but I saw it every day. Part of my job was to call people who had brand new accounts and everyday I talked to people who had no recollection of opening a new checking account, but who had recently called customer service. 

In fairness, most of these new accounts had been opened with the customer's consent, but because there was so much pressure to sell checking accounts and so much money to be made doing it, reps used all kinds of tactics to sell them. 

In banking, there are two major types of fraud or  compromise that occur on checking accounts and they each need to be dealt with differently. The first involves the debit card. If a debit card is lost, stolen or compromised, that debit card number has to be closed and replaced with a new one as quickly as possible. As soon as the debit card is closed, there is no further risk to the account it is attached to.

Compromise of an actual checking account number as opposed to the debit card number is much more complicated and nothing short of closing the whole account and opening a new one will eliminate the risk.

Large scale debit/credit card compromises are fairly common when a retailer or payment processing company has a theft of data that includes debit and credit card numbers. When this happens, banks are notified that a large group of their customer's card numbers may have been stolen and need to be closed and replaced. In these situations, all that needs to be done for each customer affected is to replace their debit card with one with a new number. It's inconvenient, but not nearly as inconvenient as closing the whole checking account and transitioning to a new one, which involves switching direct deposits, automatic bill payments, ordering new checks, etc. 

Two such large-scale card compromises took place while I worked at TBTF Bank and both were high profile in the media, triggering panicked customers to call in even as the bank was sending letters and new cards to them. No one earned commission just for closing and replacing a debit card, so sure enough, customer service reps had a feeding frenzy advising customers to close their checking accounts and open new ones over the phone.

I heard this going on all around me, knowing full well that it was unnecessary and a terrible inconvenience to the customers. I don't necessarily think management was encouraging this and they may not have been aware of it, but they should have been. There just wasn't that much accountability. 

Lessons in Banking: Tricks of the Trade

One day in 2007, the TBTF (Too Big To Fail) Bank customer service call center introduced something new and trained us all on it.  The IVR System Bypass wasn't quite like gastric bypass, but it was hard to stomach and it did make me want to throw up.

Certain customers had been identified as good prospects for new accounts, particularly mortgages and home equity loan and lines of credit. When these people called the automatic phone system to do something like check their bank balance or activate a debit card, they would be transferred to a representative who would get a pop-up on their computer screen telling them which product they were supposed to pitch to the caller.

To the customer, it seemed like they had made a mistake following the recorded prompts or keying in their information. Now I work for a credit union and I know that sometimes these things do happen and callers will randomly be kicked out of an automated phone system to a live rep. 

At TBTF Bank we knew very well something else was going on, but we were expected to pretend otherwise. We were supposed to tell the customer that we'd  be glad to help them with whatever they needed, but in the process we were supposed to try to engage them in a conversation that could transition to a sales pitch. At the end of the phone call, if we had not managed to transfer them to a sales rep, we had to log the reason why. Of course we earned commission for every loan application that was submitted or new account opened as a result of our successful sales pitch.

In this, as in other sales incentives, I didn't perform very well, because my heart just wasn't in it. This was just another little crisis of conscience that kept me actively seeking other job opportunities during the year and a half I worked at TBTF Bank.

Lessons in Banking: Mortgage Mania

So much has happened in the US and world economies and in our political landscape in the past six years. Some of it  has given me cause to reflect back on my experience in 2006-2007 when I worked in an entry level position for a bank that was to become a major player in the sub-prime mortgage crisis. My time at "TBTF" (Too Big To Fail) Bank  helped shape my opinions about federal regulation of large banks, something I'd never had much reason to think about before. 

Customer service representatives at TBTF got extra money in their paychecks for each caller they could transfer to a "personal banker" who would take a loan application or open a new account for them. Even if a loan application was declined, we were still paid for talking the customer into submitting it. When customers told us that they didn’t think they would be approved because they had already been denied credit multiple times, we had everything to gain and nothing to lose by encouraging them to try again "just in case your credit has improved by now." Of course every time they applied, their credit score took another hit. 

Mortgage applications were the ultimate prize. We were expected to ask everyone if they were a home owner or if they wanted to be. It didn’t matter how young or old or poor they were. We were supposed to try to engage every caller in a conversation about the benefits of home ownership and get them transferred to a mortgage sales representative. People who already had mortgages were encouraged to apply for a home equity loan or a refinance. These people were just calling to check their account balances, order checks, report a lost debit card...  

One day I heard one of my co-workers trying to talk a young college student into applying for a pre-approved mortgage. My conscience didn't permit me to try very hard to go after these incentives and I never came close to meeting the sales goals that were set for each of us, but as long as I did well with the actual customer service aspect of my job description, I managed to earn my base pay and remain in good standing.
 

When news began to break about problems in the economy due to sub-prime mortgage lending, my supervisor was quick to tell us that TBTF Bank had very high lending standards and had never engaged in sub-prime lending like those other unscrupulous banks and mortgage companies out there. I think she may have honestly believed that.