Bank of America and the Royal Bank of Canada last week took fairly divergent tacks in trying to move long-running narratives forward. While BofA leaned into data to make its point, RBC relied on emotion.
“Technology can’t replicate the energy, spontaneity, big ideas, true sense of belonging and fun” of being in the office together, RBC CEO Dave McKay wrote in a memo seen by Bloomberg.
Missing from the memo, however, was a concrete expectation spelling out how many days a week employees would ideally be in the office.
“As we move into the fall, I’m asking our leaders and colleagues to come together more often in person to work and collaborate,” McKay wrote.
Hybrid arrangements at the bank let most employees work in the office two or three days a week, and those policies are in place for most teams and in most regions, Rafael Ruffolo, a spokesperson for the bank, told Bloomberg, adding that the bank aims to have any new arrangements set to launch by the end of September.
Timeline is also crucial. As the COVID-19 pandemic hits the back stretch of its third year, banking’s favorite bellwether holiday — Labor Day (celebrated in Canada, too) — beckons. And perhaps this year’s iteration comes with an evolution of messaging:
In Year 1 (2020), banks were still growing accustomed to life with COVID and, by and large, approached Labor Day with a “let’s-aim-for-this” attitude. Some, of course — think Morgan Stanley and Goldman Sachs — set more aggressive timelines. But a mid-June uptick in the COVID infection rate forced Citi and JPMorgan Chase, for example, to push back planned July returns.
Year 2 brought a new variant and another summer swell in the COVID caseload. Banks, again, were divided — with hard chargers betting on a return to the old normal. “We want people back to work, and my view is that sometime in September, October it will look just like it did before,” JPMorgan CEO Jamie Dimon said. But banks like Wells Fargo, U.S. Bank and Truist sided with caution, delaying office returns.
In Year 3, it seems, even banks that some observers may not peg as aggressive — many of Canada’s banks have only instituted at-work return policies over the past six months — appear weary of empty offices. “We’re a relationship-driven bank,” McKay wrote. “Direct human connection is core to our culture and how we bring our purpose to life for all those we serve.”
Without a concrete in-office expectation, RBC’s appeal to employees is all emotion.
A 90% drop
Bank of America sought a different path last week — not on office returns but regarding its overdraft policy. The bank said Wednesday its revenue derived from overdraft-related fees and services fell 90% in June and July — its first two months after reducing overdraft charges from $35 per instance to $10 — compared with the same months a year ago.
“It’s a pretty dramatic shift for our clients, which is what we intended to do,” Holly O’Neill, the Charlotte, North Carolina-based lender’s retail-banking chief, told Bloomberg.
Timing is as a key component in Bank of America’s messaging, too. Last week’s press release comes ahead of a yet-to-be-scheduled (but definitely-in-September) Wall Street oversight hearing in front of the Senate Banking Committee. The panel’s chairman, Sen. Sherrod Brown, D-OH, has indicated in letters to the CEOs of Wells Fargo and U.S. Bank that he looks forward to hearing their feedback (in Wells’ case, regarding racial disparity in mortgage lending, and in U.S. Bank’s, a fake-accounts scandal.)
For Bank of America, the overdraft numbers may serve as a proactive talking point to use at the hearing. And it may be no deeper than that. The bank added it expects its overdraft component next year to drop to 97% below what it was in 2009 — an odd stretch of time to measure (i.e., not a round number such as a decade) until one considers Bank of America’s current CEO, Brian Moynihan, took the top role in 2010 and can say at the hearing, “This is what has happened on my watch.”
From a broader view, Bank of America noted that consumer overdraft fees comprised less than 0.4% of its second-quarter revenue.
“It’s not core to how we make money,” O’Neill told Bloomberg, adding it’s “not a free service because we do take losses on clients who overdraft.”
The common word
There is one word, though — balance — that ties together BofA and RBC’s messaging on very different topics.
“We were striking a balance by continuing to provide the service at a relatively low cost,” Bank of America’s O’Neill said of overdraft fees.
Likewise, in his plea to tip the scales a tick toward in-office attendance, Royal Bank of Canada’s McKay said, “For hybrid to continue to work effectively, we need to get the balance right and be a bit more deliberate about when and how we organize on site.”
