There is a lot wrong with the world – famine, war, poverty, child labour – the list is long and painful. While whingeing about the banks in Australia seems insignificant and a little petty in comparison, I feel I just have to get it off my chest.
The Australian newspaper today published the findings of an independent audit it commissioned on the nation’s banks, and the introduction to the story says it all really. It reads: “The major banks are making $450 a year more from each average home mortgage today than before the global financial crisis as they exploit weaker competition from non-bank lenders.”
This comes little more than a week after the banks said they were too poor to pass on interest rate cuts by the Reserve Bank of Australia. “Increased costs” they claimed. If they really want to know what it feels like to suffer from increased costs, they should try being a client of themselves for a while.
When I first moved to Australia 10 years ago, I was astonished to learn that upon opening a bank account, I would be charged for a myriad of things. The most baffling to me was a charge associated with “account keeping”. Seriously, what does it cost to keep my account?
Next, I then learned that not only would the bank charge me to keep my money, it would also charge me to take it back – ATMs, cheques, setting up direct debits, and all sorts of other ways of spending my hard-earned would incur a charge. To a young lad from England, who got a pencil case and all sorts of other goodies when he opened his first bank account – a Griffin Saver at Midland Bank – this was all a bit hard to take. In the end, I chose Westpac, because at the time, they allowed me eight transactions a month before charging me to withdraw money from my account. The account set-up fee was a one-off, too – nothing to “keep” my money. How very generous of them. Thanks Westpac – no really, thanks. And I say that with no hint of sarcasm.
To be fair to Westpac, they offered far less account charges than any other bank at the time, hence why I went with them. They’ve been pretty good to me since, and other than the occasional huff about an increased charge, I’ve never really had cause to complain about their service. How customers of the Commonwealth Bank of Australia, NAB, ANZ and others cope I can only speculate, but the NAB in particular seems way out of step with the moral behaviour expected of decent human beings when it decides to pass no relief to its customers in the wake of rate cuts by the RBA. Why? It’s disgusting.
On top of all this, lower tier bank workers are losing their jobs while the executives that decide their fate live off multi-million dollar bonuses. Let’s not even start on their annual wage packages. It really does anger me – if you hadn’t noticed.
What would be more refreshing than anything is a new bank, set up by honest investors who want the best for their customers, not themselves. Imagine that bank’s chief executive making a statement that he is not taking his $5 million bonus this year. Instead, he’s going to put it towards keeping some jobs afloat, and soak up some external costs to allow customers to benefit from interest rate cuts on their investments. He’s also going slice his annual salary from $7 million to $3 million, because that extra $4 million can probably be better spent, too. Being the CEO of a bank, he’d know all about investing a slighlty decreased income wisely enough to keep him living quite nicely for the rest of his days – even if he retires in a couple of years.
Wouldn’t it be nice?
It’s all about looking outside the box at the real world for a change, but it seems bank executives have lost touch completely with that world and anything that exists beyond the screens of tumbling numbers and profits.
So my message to bank CEOs everywhere is simple: “Wake up, and start serving your customers, rather than continuing to completely rip us off. How do you sleep at night?”