A small step to cupid

The big banks are expected to show weak results due to the slowdown in the Canadian economy. So here’s a growth opportunity for them that arrives at a particularly good time.

First, some background. The U.S. Federal Reserve Board has, according to Bloomberg News, just published a study showing that credit ratings have a strong correlation with the stability of a romantic relationship. The closer the credit ratings of two individuals are to each other, the more likely it is that the couple will stay together. And the higher the absolute credit rating of each of the two partners, the greater the chance of the relationship lasting. The language of the study steers well clear of the romantic, however. Try this one: “Among the relationships that survive two years, a onestandard deviation increase in the initial average credit score implies a 37 per cent lower chance of separation during the third and fourth years of the relationship.” Yes, that’s what I would have guessed myself—had I not become all dewy-eyed reading it.

But there is an interesting nugget in there. The study tends to confirm the simple assumption that couples who do share the same attitude toward financial responsibility will tend to stay together; those who don’t, wont. A matching sense of financial responsibility is important in a relationship, and a credit rating is a simple measure of financial responsibilty. That would be helpful to a bank in determining whether or not to extend credit to a newly minted couple.

But I said this was a growth opportunity, not just an improver of lending decisions. How does that come in? In a word, Ben, it’s matchmaking. If I can find out from my bank whether I’m a credit rating match for my would-be partner, and that match is as solid a signal of relationship success as I am going to find; why should I bother throwing good money after bad to use a website that puts me in touch with people who like the same music as me (bluegrass) and share the same favourite colour (yellow)? From where I sit, it seems to me the banks are sitting on a potential goldmine.

I grant you there are a few hurdles to be overcome in order to conclude that the idea is practical. Confidentiality is one of them. You can’t expect a banker to be showing me the credit scores of all their other clients, nor would I want mine to be known to anyone else. But bankers are nothing if not souls of discretion. And most times they are also trustworthy. Who better than a banker, then, to entrust with the task of matching my credit rating with another’s, and letting each party in on the happy results? It would certainly add to the banker’s job satisfaction, and the bank would get two clients for life, assuming the relationship pans out the way the Fed study says it will.

I also grant you that matchmaking services don’t fit the traditional business model of a bank. But why not innovate? A generation ago, who could have imagined banks operating insurance, investment and trust companies? Bankers could doff their pinstripes in favour of, say, Sears’ new Wayne Gretzky Collection. Banks themselves could adapt their decor so as to appear less intimidating (“Welcome to RBC: Try Our Waterbeds”). They can also hire Dr. Phil surrogates to train staff in sensitivity to matters of the heart (“At BMO, we don’t count your money because we trust you”).

So the challenge, it seems to me, lies more with the consumer of the service than the provider. Can customers warm up to an institution that once offered itself up based on the extra quarter of a percent interest rate on a savings account and that will now want to play Cupid instead? Perhaps we’ll see some action in the middle of February.

When you think about it, it’s perhaps mildly surprising that banks have not already intervened in more major life milestone events. Sure, they’ve got the basic financial transactions, like making a will, investing your money and buying insurance coverage. But they could go further still. Our credit rating matched couples are likely to become parents, so why not solidify the relationship with CIBC Baby Furniture? Their child is going to skate or play hockey, so why not a Scotiabank Sporting Goods. And that child is going to want to become a driver, so why not TD Auto Repairs as a route straight to the customer’s loyalty.

It’s one small step for the banks to start playing Cupid. I’ll leave it to you to decide whether it’s a giant leap for mankind.

dsimmonds@wellingtontimes.ca