Free banking to be axed, warns leading bank

Soldato
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I think this was always going to happen.
Basically rather than a few getting charged when they do things wrong, like going into the red, spending money that isn't theirs and basically being unable to look after their own finances instead we'll all have to pay monthly fee's and maybe banks will also be a little more selective of who they want as a customer.

I'm sure the "Get your money back from the bank due to unfair charges" thread is still looming.
You know the one - where those people constantly going in the red and receiving letters each month and not going into their banks and having a conversation with a human are encouraged to claim back money!
Well I'm sure that site and many others haven't helped the situation.
However as always the short-sighted actions of a few ruin/spoil things for everyone else.
 

Sem

Sem

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stoofa said:
I think this was always going to happen.
Basically rather than a few getting charged when they do things wrong, like going into the red, spending money that isn't theirs and basically being unable to look after their own finances instead we'll all have to pay monthly fee's and maybe banks will also be a little more selective of who they want as a customer.

some banks purposely let you go overdrawn and spend money you don't have so they can charge you
 
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BUSH said:
I wouldn't mind paying for my banking, but i'd expect an improvement in service such as branches open later during the week, open all day on saturdays, faster cheque processing. Somehow i think we'll get charged, yet still get the same poor levels of service.

Yeah, there's quite a few things about banks which aren't very customer friendly on the face of it. In fact not so many years ago many banks were closing very early during the week and were closed at weekends.

Faster cheque processing is definitely something I'd like to see, but then I'm not sure how feasible it is.
 
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HangTime said:
Yeah, there's quite a few things about banks which aren't very customer friendly on the face of it. In fact not so many years ago many banks were closing very early during the week and were closed at weekends.

Faster cheque processing is definitely something I'd like to see, but then I'm not sure how feasible it is.
totaly unfeasible realy
its all silly, when the moneys "cleared" its not realy cleared at all, takes MUCH longer.
 
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growse said:
Consumer banking, as a business, has to be profitable as well, and serves no purpose if it just loses money. The bank would survive quite happily without a consumer arm - many US investment banks make huge profits on investment banking alone.

Us investment banks don't have a choice. There is the Glass-Steagall Act. Otherwise, a large proportion would be involved in similar activities :)
 

DRZ

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HSBC made over 1Bn a year from the unfair / unenforcable (in legal terms, not my personal opinion) fees they levvied on people who went overdrawn.

I have never EVER been charged but I have seen people being charged £25 for going £3 overdrawn for 1 day.

The way I see it is "so what" if there is a charge for a bank account? Last time I looked, a bank account was a service provided by a bank. Name another service you regularly use that is free? Why should the freeloading bank customers be subsidised by the people who go a few quid overdrawn (and can sometimes get sucked in by spiralling recursive charges)?

No, look at this properly - you have asked for a service and that service may cost you money. Think of it like a phone, tv service or your internet connection and it makes sense...

Charges for using a service > legally unenforcable, disproportionate charges on those that can least afford it not to mention them breaking the banking code in the process...
 
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VeNT said:
totaly unfeasible realy
its all silly, when the moneys "cleared" its not realy cleared at all, takes MUCH longer.

Why? As far as i'm aware, on continental europe cheque processing is miles quicker than in the uk, and things like electronic transfers are quicker as well. What goes on that means it takes normally three days to move money electronically from one bank to another?

a quick google:

http://business.timesonline.co.uk/article/0,,13130-1936966,00.html

At present a personal cheque takes at least three working days to clear. High street banks in the UK are among the worst in Europe — on average they sit on transactions such as standing orders for about three days.

British banks have lagged their European counterparts by failing to invest in systems to speed up transfers.

that suggests its british banks dragging their heels rather than it being unfeasible.
 
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carvegio said:
Us investment banks don't have a choice. There is the Glass-Steagall Act. Otherwise, a large proportion would be involved in similar activities :)

My point is that these banks are perfectly happy without a consumer arm. Of course if they could, they'd scape a few extra billions here or there.

It's very simple - when the banks started out, they realised that they could make money by charging people for going unauthorised transactions. No-one challenged them in the courts, so they continued doing it, and they knew that free bank accounts was attracting more business than if they had charges for them. Now that the charges are contested in the courts, the banks can no longer charge so easily. Therefore they charge people for accounts. Sure, they may lose some customers, but they make up for the lost potential income from those people making mistakes by charging everyone for accounts.

The bank don't care if the charges are legal or not, they're just there to make money, like every other business is.

Also, £1Bn in revenue is just over 1% of revenues totalling £91Bn year end 2005. It's not a big deal from the bank's point of view. They probably pull in a bit more in loan interest, but the consumer banking arm isn't that high up on the list of priorities of investment for most banks.
 
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This sucks. For years I had totally been depandant on my parents who wouldn't let me have any control on my finances other than a debit card. Then online banking came along and I could start doing more stuff, and now they're going to charge me for keeping my money? gah..arg...
 
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ste_bla said:
Happens in other countries so why not

Only thing is I hope we get better current rates if they intro fees otherwise its yet another way of making monies

Yeah come to Canada, the banking system sucks here. You get charged to make withdrawels over a certain amount of transactions(12 or 15 is normal for a basic bank account), you can get unlimited transactions but it costs you more money, the basic bank accounts don't appear to have Visa/Switch functionality and the banks don't open on a Saturday or Sunday as a general rule, not to mention that during weekdays they normally close at 4pm before I've even finished work. Not that I'm bitter you understand ;) but I was very glad that I'd be coming back to the UK with an infinitely more customer focused system or maybe that is about to change for the worse.

I've also experience the banking system in Finland fairly recently, you still get charged a monthly fee for the account but it is oddly a whole lot more user-friendly and easy to work with even though English is only the second or third language they speak there.

I can understand that the customer arm of banking doesn't generate huge revenues but I'd like to think that banks would keep the accounts as fee free as possible even as a form of public service if you will, I don't particularly like the thought of paying money for my account to stand still as it were. Unless you have a fairly large balance on a current account you won't receive enough in interest to offset say £2 fee per month so unless you keep adding to the bank account you will be losing money just for it to sit there. I'm aware that I'm hopelessly naive to think that banks might even contemplate providing a service just for the public with little recompense but maybe the goodwill generated could/would influence the business customers so it may not be quite so inefficient after all.
 
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Banking isn't free ATM anyway. I get paid 0.1% interest on my salary that is invested in my current account, 20%+ if I go overdrawn + credit cards, ~8% on any loans, £2.75 to withdraw cash....

What banks are these people with who say they get 'free' banking??????
 
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carvegio said:
Us investment banks don't have a choice. There is the Glass-Steagall Act. Otherwise, a large proportion would be involved in similar activities :)
It was repealed in 1999, iirc.

Prior to that, it was effectively toothless, as most banks had already circumvented its provisions.

And no, banks are not required to have retail consumer divisions. They choose to, however, as they can leverage off those relationships to build retail business accounts, from which they can build higher value added lending relationships, and then they can start to provide the fun services, in the capital markets and investment banking areas.
 
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Samtheman1k said:
Banking isn't free ATM anyway. I get paid 0.1% interest on my salary that is invested in my current account, 20%+ if I go overdrawn + credit cards, ~8% on any loans, £2.75 to withdraw cash....

What banks are these people with who say they get 'free' banking??????

Why do you keep your money in a 0.1% interest paying current account then? There are plenty out there that pay a lot more than that. Regarding creditcards, if you pay them back in full each month you pay no interest. For loans, well do you expect a bank to lend you money and not make anything on it! Where do you withdraw money in the UK where it costs you £2.75 per transaction, there are free ATMs still in this country.
 
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z3b3dy said:
Why do you keep your money in a 0.1% interest paying current account then? There are plenty out there that pay a lot more than that. Regarding creditcards, if you pay them back in full each month you pay no interest. For loans, well do you expect a bank to lend you money and not make anything on it! Where do you withdraw money in the UK where it costs you £2.75 per transaction, there are free ATMs still in this country.


Most of the big banks offer pitiful interest on current accounts. Credit cards are free if you pay them of, but they still charge the shop 1.5% (or whatever it is) for EACH transaction (thus a fair number of shops charge CC fees), also most banks charge for overseas transactions... The loans are at a rate higher than the base rate, so they are making a profit. And free cash machines seem to be rarer and rarer!

Some banks are better than others, I was just pointing out that all those features that I mention, most people use some of them, and thus do actually pay their bank in some form or another. So I still can't where you get completely free banking from :confused:
 
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Banks are scum.

This whole lousy house of Capitalist cards will collapse one day.

I will change my name to Max and drive arround the desert in a dune buggy with .50Cal machine guns on it.
 
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DRZ said:
The way I see it is "so what" if there is a charge for a bank account? Last time I looked, a bank account was a service provided by a bank. Name another service you regularly use that is free? Why should the freeloading bank customers be subsidised by the people who go a few quid overdrawn (and can sometimes get sucked in by spiralling recursive charges)?

Well said. I for one welcome banks starting to charge. It might mean they actually have to improve their services in order to stop people moving to cheaper/better rivals. At present most banks offer roughly similar levels of service and most people simply can't be bothered with moving.
 
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Samtheman1k said:
Most of the big banks offer pitiful interest on current accounts. Credit cards are free if you pay them of, but they still charge the shop 1.5% (or whatever it is) for EACH transaction (thus a fair number of shops charge CC fees), also most banks charge for overseas transactions... The loans are at a rate higher than the base rate, so they are making a profit. And free cash machines seem to be rarer and rarer!

Some banks are better than others, I was just pointing out that all those features that I mention, most people use some of them, and thus do actually pay their bank in some form or another. So I still can't where you get completely free banking from :confused:

It seems to me though that you're against anybody who makes a profit then! Should I feel ashamed that the companies I own make profits on what we charge our customers. Yes they're not at the level of banks but still where do you draw the line? Regarding transaction charges, well a network has to be maintained to keep these transactions running, I have no idea what the running costs are but I'm sure they're a bit of money.

Given that I have no loans, pay my creditcards off in full each month, keep my money in high interest accounts and other investments and use a Nationwide account for my international travel I can see how I get free banking
 
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z3b3dy said:
It seems to me though that you're against anybody who makes a profit then! Should I feel ashamed that the companies I own make profits on what we charge our customers. Yes they're not at the level of banks but still where do you draw the line? Regarding transaction charges, well a network has to be maintained to keep these transactions running, I have no idea what the running costs are but I'm sure they're a bit of money.

I ain't against banks making a profit, it is a free market, they can do as they please. It is up to the customer. I personally pay for my bank account, because the service & extras I get, I think are worth the fee. It's just the people claiming that the banks aren't making any money on 'average' customers don't seem to see the hidden charges!

Given that I have no loans, pay my creditcards off in full each month, keep my money in high interest accounts and other investments

So you've never payed a withdraw fee, or never paid a CC fee, e.g. when booking tickets, holidays etc.? Admittedly, it is possible, but highly inconveinent as it means you'd have to pay by cash/cheque for many things! I personally don't mind paying, even if just for the fraud guarantee you get with most CCs.

and use a Nationwide account for my international travel I can see how I get free banking

Nationwide isn't a bank, it's a building society.
 
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