MSE News: Call to end free bank accounts

andy_allblack

Forgot to add, I wonder who will break ranks first????? Neither, they will probably end free banking at the same time.

rn018b5249

Bailey isn't living in the real world. Go on Twitter with this line people: the banks secretly earn money off the average balance held in every account in the country. Now pay for a bank account? Am I hearing correctly? Here we go again. It's a tiresome tune I've heard several times already. You see, the swindlers are not content with bringing down the country and eating up a massive proportion of the country's reserves, forcing all these cuts. And now we have a senior Bank of England person advocating charging for bank accounts. Wakey wakey Mr Bailey. The world changed after your associates took all our money, making us a very poor nation with an expensive infrastructure. Like having a company with heavy direct costs and marginal income and no growth. That's a good company to have isnt it. (rhetorical). Marvellous. I really appreciate your comments. Let me ask you Mr Bailey, What should the swindlers pay? Maybe nothing perhaps? Maybe everyone should pay the swindlers more. Is that it? Sounds like it to me. What a foolish idea from someone with such a high profile position. I hope you're not taking over from Mervyn King. Why aren't the swindlers being made to pay, Mr Bailey? Struth, you'd think he was a member of the coalition with that idea.

innovate

rn018b5249 wrote: »

Bailey isn't living in the real world. Go on Twitter with this line people: the banks secretly earn money off the average balance held in every account in the country. Now pay for a bank account? Am I hearing correctly. Here we go again. The swindlers are not content with bringing down the country and eating up a massive proportion of the country's reserves forcing all these cuts. And now we have a senior Bank of England person advocating charging for bank accounts. Wakey wakey Mr Bailey. The world changed after your associates took all the country's money, making us a very poor nation with an expensive infrastructure. I really appreciate your comments. Let me ask you Mr Bailey, What should the swindlers pay? Maybe nothing perhaps? Maybe everyone should pay the swindlers more. Is that it? Sounds like it to me. What a foolish idea from someone with such a high profile position. Why aren't the swindlers being made to pay, Mr Bailey? Struth, you'd think he was a member of the coalition with that idea.

And exactly what are you proposing to do to prevent the charges coming for everyone?

innovate

nomoneytoday wrote: »

Why should I have to pay for banking?

Do you really think we aren't already paying for our current accounts?

No service is free in this world, and as far as current accounts are concerned, they are being funded from overdraft interest and charges, no interest on credit balances, other charges, measly interest rates on savings accounts, silly "perks" like overpriced insurances etc etc etc.

Charges for current accounts don't need to be bad news all the way, as manifested by the Santander 123 account. Their £2 monthly charge can, for most people, be very easily re-couped from the cashback, and/or the interest, they are offering.

Not saying this is the model all other banks should follow - - it's just an example of a bank offering value for money - - - for just about everybody. Some other banks might want to continue to offer "free" current accounts -- but let's not kid ourselves, someone is paying for them - - and that someone is their account holders.

bert&ernie

The problem with "free" banking is that it perpetuates the regulatory 'whack-a-mole' in relation to how revenue is generated.

Throughout my career in retail banking, most of the projects I have worked on have been about regulatory compliance and/or revenue enhancement - itself usually in response to changes in regs. There is really very little innovation in terms of the services offered to customers. Regulation, rather than competition and innovation, is the main source of disruption.

The regulations are typically about treating customers fairly and lending responsibly. This tends to cut off or curtail a particular revenue stream and the bank needs to find another to replace it. The regulator then deems this to be 'unfair' and the game of 'whack-a-mole' continues. It seems the only source of revenue that is commercially 'off-limits' is simply charging people for the service that they actually receive.

There are good commercial reasons for this. The retail banking market in the UK is actually quite competitive if dysfunctional due to the perceived difficulty of switching/customer apathy. Charging structures are so byzantine and opaque that its hard for a customer to work out what they are likely to pay anyway, so switching is still something of a lottery for the less sophisticated.

I'm not sure I know what the answer to this is, but I can see why "free" concerns the regulator. Its not the only industry that has this problem - its also seems to be a particular problem with web content. Once you introduce the consumer to the prospect of getting anything for "free" it becomes very difficult to build a sustainable funding model.

Basic banking services are as essential as utilities and, just as we have social tariffs for gas and electricity, we need to ensure that the most disadvantaged in society can access them. But this doesn't imply that we all have a 'right' to 'free' banking.

Joe_Bloggs

I am sure the correct term for 'free' banking is closer to 'free if you remain in credit' if you read the terms and conditions. This is may be harder to achieve for low income earners without savings buffers to call upon in times of need.

Thus there is a cross subsidy of those who can't budget and pay fees to those who can budget and are paid bonuses to and / or get monthly rewards.

I wonder why Andrew Bailey did not mention the payday loan situation if he was so concerned with fairness.

I last got a note from an ATM three months ago. All of my spending is done with cashback credit cards. These are not free as they pay me.

J_B.

louiser123

i was made to have a bank account so i could be paid my wages, i was also told i have to have a bank account to enable me to gain a mortgage. therefore as this was not my choice and i was made to open one i would like my wages paid to me in cash please like i was years ago, after all that option was taken away from me i had no say in it! i have no overdraft i have my pay put in monthy and some bills paid out dd and i pay on my card or withdraw when required. i dont get charged for anything but they use my money to place on the money market so i guess they are making enough. if my bank decides to charge i will move one that does not.

OutofDebt-NOT-OutofDanger

......and it could mean lower costs for other services

As the regulator I would hope that he would make sure that it WOULD mean lower costs for other services.

He believes the price of banking to consumers varies too much depending on the services they use

And the point is??? Why shouldn't someone using more facilities pay more than those who don't?

"I also worry that the banks may not properly understand the costs of products and services they supply.

Then they don't deserve to be in business. The fundamental requirement of a busines is to be profitable. How can a business remain profitable if the bosses don't know what their costs are?

"And I worry also that this unclear picture may have encouraged the mis-selling of products that is now causing so much trouble."

So customers who had a paid for account didn't get caught up in the PPI mis-selling scandal? That's news to many people who are currently reclaiming the premiums from these greedy bankers. Be real, the only reason that banks (among others) sold PPI was for GREED and PROFIT.

martinaj

Dr Andrew Bailey, who is yet another "banker" without any banking qualifications, suggests that those customers who enjoy free banking caused the PPI shambles. As for "free banking", he conveniently overlooks the billions we customers leave on our current accounts for which we receive little or interest but which banks lend on at rates of 10, 20 or even 30 percent. As for banks not being able to properly charge customers for other services, they wouldn't be making their huge profits and getting their huge bonuses if they undercharged! This eternal student, currently Bank of England Executive Director, has absolutely no experience of retail banking. He sits in his ivory tower, getting steadily promoted up the ranks, and has no idea how ordinary people live. Which muppet appointed him to his new role? Keep your hands off our "free" bank accounts, Dr Bailey.

Joe_Bloggs

@louiser123
I think you did well in shielding your sealed pot from the bankers. I do worry about inflation and corrosion eating away at it. I gave my stash of old coppers to a local charity shop, it took many trips. I had cornered the market in loose change so it was not worth my while counting and bagging it .
J_B.