Hedge Fund Notes Disconnect Between Bank Strategy and Execution. Duh.

Second Curve Capital is a hedge fund, managing hogsheads of cash in long-term investments on the stocks of banks and financial services. Most of the year is spent over ponderous goblets of brandies, smoking fine cigars at financiers’ gentlemen’s clubs, absorbing the exuberance and doldrums of bank CEOs and presidents.

But once a year, Second Curve takes to the streets, adding to their intelligence what it’s like on the ground as a lowly consumer. The results? From telling moments of candor:

    Mr. Brown’s favorite experience came at a Chase branch, where he opened a checking account. When a Chase employee asked where he currently did business, he said he was a Citibank customer. “I’m surprised you want to switch,” she replied, matter of factly. “I have my account at Citibank.”

To moments of surreality:

One team’s photos showed a sign in the window of a North Fork Bank branch, complete with a skull and crossbones and a message that read, “Closed: Poison.” When the team arrived at the next North Fork branch, the employees there had no idea what was happening nearby.

As Second Curve notes, “When you walk the streets and look at what’s happening, the gap between strategy and execution becomes obvious.” Gee, we could have told them that.

Get Out of That Rut and Into the Shower [NY Times] (Thanks, Mark!)

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  1. KevinQ says:

    This sounds perfectly reasonable for a modern retail establishment – which is what modern banks have become.

    “Would you like a home loan with your deposit today?”

    “Would you like to try our combo? A Visa debit card and 6-month CD for only $49.99?”

    A. Retail employees aren’t paid enough to shop at their own location, if they think that another store is better – whether it’s a bank, a video store, or whatever.

    B. Shit may roll downhill, but useful information takes forever to make it from those who have it down to those who need it. That one store wouldn’t have been told that another was closed for poison doesn’t surprise me – the district manager is probably a busy man, and he doesn’t have the time to call each and every store and tell them that somebody is trying to kill them.

    K

  2. What’s sad is that Second Curve Capital is unusual in it’s practice of actually finding out how these companies do business rather than it being the norm.

    But I agree, there isn’t anything surprising in the article.