The banks seem to be copping it at the Royal Commission, and there have certainly been some fascinating revelations. I wonder where this is going to lead in terms of recommendations?
The Royal Commission forms an interesting backdrop to the magazine that fell out of the Australian newspaper a few days ago. It was supposedly all about “The Future of Banking”. The articles were all to the effect that the banking scene will inevitably “change” over the next few years.
Admittedly, my interest in the banking system these days is in relation to making payments (not so much borrowing). Perhaps it is on the lending side of their business that banks are most likely to have to change. Hopefully, this will enable their staff to go to being bankers (who assess risks) instead of “product salesmen” (and “dumbed-down” at that), as it is said they have become.
And, yes, maybe things on the payments side will be delivered differently: the advent of “paywave” seems to have been popular. But is cash really going to disappear? While the local coffee shop has a surcharge of nearly 2% for any electronic payment, and I was quoted a surcharge of 1.5% if I chose to use a credit card for a recent transaction, it seems to me that we have some way to go before we reach a cashless society. Perhaps the “New Payments Platform” will reduce these types of costs?
But to get to the point: the articles in the magazine contained a lot of statements along the lines of the need for financial institutions to be “responsive” to the needs of customers. But, hey, let’s not get carried away here. For the vast majority of us, it’s not rocket science. Our basic everyday need is to have somewhere to keep our money and the ability to make payments with a minimum of fuss without (at least in my case) incurring a transaction cost. And, yes, “Paywave” is the sort of thing that appeals to me – except when there’s a surcharge involved. But I get irritated when I have to monitor my “everyday” account to make sure that there are adequate funds in it, because the account in which I keep my modest surplus funds (to obtain a token rate of interest) isn’t the one from which payments are made.
For a short time, I had an account with U-Bank, which offered a sweep facility between the transaction account and the interest-bearing account, but after working out what was going on (maybe I’m just slow?) there were still “strings” attached: the interest bearing account only paid interest if a minimum monthly amount was paid into it, which of course called for anther layer of complexity to set up arrangements to ensure that this happened (and then to monitor them).
I could go on, but let’s leave it at this: financial institutions (and perhaps the commentariat?) need to distinguish between technological change and “mindset” change. Just because their customers appear to be using the shiny new things provided to them, such as “Smart ATMs” or apps on their phones or whatever, doesn’t mean that the institutions are meeting the “needs” of those customers.