EQ: Banking on emotion

DBS Bank has finally acquired some EQ. Its decision to reassert the POSB brand name shows that it has finally realised the tremendous importance of the emotional factor, even in the conduct of business.

New economy or old, there continues to be business deals - including multi-million dollar deals - struck on the basis of friendship and good feelings rather than hard facts and figures.

This is a fact of life. It may be changing but it is not going to go away completely. Emotions are important. Very important. Good that DBS has acknowledged it finally. Good for the bank, good for its customers.

Like people with high EQ, the bank's management is now humble enough to admit that it had made some mistakes in the past, one of the biggest of which was to take the advice of its US-based consultants to drop the POSB name when the two banks merged.

As an editorial consultant to this newspaper, I have to be careful with what I say about the usefulness of consultants.

But I enjoy jokes and I like to share this one with you: A consultant is someone who takes your watch and then tells you the time.

In the case of DBS, however, its consultants did not even tell them what they already knew or could have discovered for themselves.

The consultants gave bad advice. Yet, the bank has only itself to blame for acting on bad advice. Words like ''good'' or ''bad'' are too judgmental.

And of course, it is easy to pronounce a piece of advice as being ''bad'' only after its ill effects have been felt.

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Different realms

So let's just say that consultants AT Kearney had advised DBS on different realms. The consultants were operating on the realm of logic and were concerned about efficiency and bottom-line profits.

POSB customers, however, reacted from the realm of emotion. They were concerned about how they felt.

They were unhappy when branches were closed as part of streamlining, or when they were made to pay service charges - penalised, punished - if they failed to maintain certain minimum balances in their accounts.

And, they felt unhappy when a name that they grew up with was going to be dropped, vanquished from their vocabulary. How can? Why they do like this one?

Never mind if other banks, other corporations, do the same things. POSB is supposed to be different. It is the Singapore heartlanders' bank.

It is the bank of young children and old folks, the bank of the poor that is not ignored by the rich.

POSB is the only bank whose interest earnings (up to a limit) are exempt from income tax and the only bank that has branches that are open till 7pm.

It is the bank with the most automated teller machines and, yes, the most customers.

There are so many things special and unique about POSB that the very idea of destroying its identity is almost unthinkable. Yet, until recently DBS had been trying to do just that.

Anyway, that's past. The bank is now working hard to win back the hearts of its customers, for example, by turning its ATM and credit/debit cards into discount cards.

It is also going back to schools to win over the hearts of impressionable youngsters. Yes, POSB had better do it quick before these youngsters open accounts with Citibank, ABN Amro and other banks with a more elitist, less grassroots, image.

DBS executives still try to explain the policy change in terms of logic and bottom lines, saying that each brand name has its value. POSB is associated with efficient savings -accounts services, DBS with financial advice, credit products, etc.

That may be true. But the bottom line is still about feelings.

The best advice that any consultant can give DBS, POSB or any other company has to be this: Don't ever hurt - don't ever ignore - the feelings of your customers.

Then you'll be okay.