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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 19th Sep 12, 8:07 AM
    • 2,324Posts
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    Former MSE Helen
    MSE News: Which? campaign demands banks put customers first
    • #1
    • 19th Sep 12, 8:07 AM
    MSE News: Which? campaign demands banks put customers first 19th Sep 12 at 8:07 AM
    "Which?'s new Big Change campaign wants banks "to work for customers, not bankers" ..."

Page 1
  • jalexa
    • #2
    • 19th Sep 12, 8:17 AM
    • #2
    • 19th Sep 12, 8:17 AM
    The single thing which needs to be done first is separation of retail and investment banking. Until then the question (and answer to) "of 2,060 people surveyed, 65% said they didn't trust bankers" is a nonsense question.

    The word "banker" is irrelevant to retail today. Computers look after the "banking". Anybody selling a bank's product is a salesperson selling financial products not cars.
    • JuicyJesus
    • By JuicyJesus 19th Sep 12, 9:59 AM
    • 3,482 Posts
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    JuicyJesus
    • #3
    • 19th Sep 12, 9:59 AM
    • #3
    • 19th Sep 12, 9:59 AM
    And who precisely is expected to pay for this?

    Oh right, the banks. I forgot. We still expect them to go to the ends of the earth for everyone but make no charge whatsoever.

    Two-thirds of those surveyed also thought bankers were unlikely to lose their job if they lied or cheated.
    Good of the survey to use the term "bankers", which is vague enough that it could refer anyone from your local cashier up to someone in a tower in the Square Mile.

    Which? executive director Richard Lloyd says: "We thought we'd seen banking at its lowest point when the public were forced to bail out the banks but since then we've seen the Libor rate-rigging scandal and continued mis-selling.

    "All while the bankers who presided over corruption continue to enjoy hugely inflated pay and bonuses.

    "Consumers are continually being short-changed – we need to see Big Change in banking now. Customer service should come before sales, standards and ethics must improve, and bankers must be held to account.

    "We want banks for customers, not bankers."
    I'm sure that sounds lovely and all, but it's remarkably vague, conflating (possibly deliberately) front-line retail staff with those who caused nationwide financial scandals.

    Regardless, with banks being business I'm sure they'll be all ears... assuming you can fit it into a way that they can do it and still make money from their retail operations. Base rates are low. Deposits pay !!!! all interest for the bank or for the customer, and where they do pay for the customer they definitely don't for the bank. Interest rates on lending are down, as is lending in general because people are, generally, considered higher risks than they used to be. If banks do not cross-sell products, where is the money to subsidise free banking and all this lovely customer service going to come from?
    urs sinserly,
    ~~joosy jeezus~~
    • N.I.M
    • By N.I.M 19th Sep 12, 3:29 PM
    • 2,248 Posts
    • 7,050 Thanks
    N.I.M
    • #4
    • 19th Sep 12, 3:29 PM
    • #4
    • 19th Sep 12, 3:29 PM
    And who precisely is expected to pay for this?

    Oh right, the banks. I forgot. We still expect them to go to the ends of the earth for everyone but make no charge whatsoever.



    Good of the survey to use the term "bankers", which is vague enough that it could refer anyone from your local cashier up to someone in a tower in the Square Mile.



    I'm sure that sounds lovely and all, but it's remarkably vague, conflating (possibly deliberately) front-line retail staff with those who caused nationwide financial scandals.

    Regardless, with banks being business I'm sure they'll be all ears... assuming you can fit it into a way that they can do it and still make money from their retail operations. Base rates are low. Deposits pay !!!! all interest for the bank or for the customer, and where they do pay for the customer they definitely don't for the bank. Interest rates on lending are down, as is lending in general because people are, generally, considered higher risks than they used to be. If banks do not cross-sell products, where is the money to subsidise free banking and all this lovely customer service going to come from?
    Originally posted by JuicyJesus
    I preface this by saying that nothing in my post is an attack or attempt to cast any form of aspersion on you or anything you've said.

    The above quoted post is EXACTLY how the banks view this situation. End of the day they are here to make as much money as they can, officially for the shareholders, unofficially they want to line their own pockets. Sorry folks, welcome to the free market and capitalism.

    Do I agree with the banks, hell no. Do I like that I'm getting screwed over by them so the execs can get obscene bonuses. Of blooming course not. Do I want to see better regulation and all the wonderful things which?, who I do actually think do a very good job overall, are calling for? Absolutely. Do I think this research is going to make a gnats fart of a difference to how things are run in the world of banking? Dont be daft.

    Ultimately the financial sector has too much money and power for politicians to do what REALLY needs doing. So people will sabre rattle and pontificate about this, that and the other, the bankers(the guys in the towers, not the sales and customer service staff in your local branch) will smile to themselves on their yachts drinking whiskeys that cost more than a years salary on the average wage and not a damn thing will change.

    End of the day, while they may be deplorable soulless morally bankrupt individuals who have brought pain on many households throughout the country and the world, they don't owe us anything...unless you were missold PPI, and if so give me a shout, I'll get it back on a no win no fee basis
    This was 6 months out of date so I've changed it.
    • JuicyJesus
    • By JuicyJesus 19th Sep 12, 3:53 PM
    • 3,482 Posts
    • 3,945 Thanks
    JuicyJesus
    • #5
    • 19th Sep 12, 3:53 PM
    • #5
    • 19th Sep 12, 3:53 PM
    The above quoted post is EXACTLY how the banks view this situation. End of the day they are here to make as much money as they can, officially for the shareholders, unofficially they want to line their own pockets. Sorry folks, welcome to the free market and capitalism.
    Originally posted by N.I.M
    I don't think inquiring as to who will pay for something is necessarily a sign that someone is for unregulated free markets. Quite the opposite; I am something of a socialist, and very much in favour of regulations of markets to ensure positive consumer outcomes.

    However I can't deny at the same time that banks are businesses and exist to make profits. But they are expected by the public, and apparently by Which?!?!?! to run at a loss. By this reckoning, they cannot charge for banking facilities, nor can they try and sell their customers any additional products to make money, nor should they be allowed to cherry-pick those customers who will be profitable for them and not service the ones who will cause them a loss. You could make a reasonable argument that retail banks are utilities and should be run like one; fine, but then all utilities charge for their service. (Mind you, I think utilities should be re-nationalised, so...)

    AT THE SAME TIME AS ALL OF THE ABOVE, banks are excoriated for charging too much for lending and paying too little on deposits, and they are told they shouldn't charge for unauthorised overdrafts. If they don't lend to a customer they are considered unfair scrooges, but if they do and the customer defaults, causing them a bad debt loss, the customer gets to blame the bank too saying it was "mis-sold" and "they should have known I couldn't afford it". They cannot win no matter what they do.

    The point I am getting at is were it up to Which? etc, banks would have no sources of profit left. Any business run along the lines of not charging for any service and having no revenue paths open to them will fail. But banks get told they should do that anyway, and if they don't willingly hamstring their own business people slag them off. If you ran a business, would you be happy with that?

    Do I agree with the banks, hell no. Do I like that I'm getting screwed over by them so the execs can get obscene bonuses. Of blooming course not. Do I want to see better regulation and all the wonderful things which?, who I do actually think do a very good job overall, are calling for? Absolutely. Do I think this research is going to make a gnats fart of a difference to how things are run in the world of banking? Dont be daft.
    I'm not sure how a single survey by Which??!!!?!? counts as research, but anyway, I'd be interested to know how you feel you are being screwed over here.

    Personally I also see no issue with a profitable business paying its executives and staff bonuses. That may be more contentious in organisations which have had to be bailed out, admittedly, but a standalone bank which makes a profit should be able to do what it sees fit with that profit, within the bounds of the law.
    urs sinserly,
    ~~joosy jeezus~~
  • Canary Wundaboy
    • #6
    • 19th Sep 12, 5:15 PM
    • #6
    • 19th Sep 12, 5:15 PM
    I'm not sure how retail banking can run at a loss when the best savings accounts pay 4% interest and yet they charge 10-30% on their loans, credit cards, overdrafts, mortgages etc?

    Surely they must be making hand over fist even if you discount the investment side of things?
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  • dalesrider
    • #7
    • 19th Sep 12, 6:06 PM
    • #7
    • 19th Sep 12, 6:06 PM
    I'm not sure how retail banking can run at a loss when the best savings accounts pay 4% interest and yet they charge 10-30% on their loans, credit cards, overdrafts, mortgages etc?

    Surely they must be making hand over fist even if you discount the investment side of things?
    Originally posted by Canary Wundaboy

    Clearly you have no understanding about the inner workings.
    Money to lend does not just come from savings. If it did then there would be very little leanding going on. This money has to be paid for at the going rate.

    Never mind all the staff required to do the work in the background. Computers don't sort out your fraud or disputes. Ensure you get a new card when something is wrong with the old one, process paperwork for you loans/mortgage application, Or update your DD/SO you want changing. They all require human intervention.

    And how ironic that Which should prompt this discussion.

    A company that charges people from 3 to nearly 20 a month for the self same product. Depending on if you get it on a offer or not


    If retail banking was a standalone item. It would not be profitable in its present guise. It would be back to the old days of charge per item or large monthly charges.
  • opinions4u
    • #8
    • 19th Sep 12, 6:13 PM
    • #8
    • 19th Sep 12, 6:13 PM
    I'm not sure how retail banking can run at a loss when the best savings accounts pay 4% interest and yet they charge 10-30% on their loans, credit cards, overdrafts, mortgages etc?
    Originally posted by Canary Wundaboy
    Even when there are hundreds of thousands of mortgage customers paying less than 3% for their mortgage?

    Or record numbers of customers not paying back their unsecured debts?
    • JuicyJesus
    • By JuicyJesus 19th Sep 12, 7:06 PM
    • 3,482 Posts
    • 3,945 Thanks
    JuicyJesus
    • #9
    • 19th Sep 12, 7:06 PM
    • #9
    • 19th Sep 12, 7:06 PM
    I'm not sure how retail banking can run at a loss when the best savings accounts pay 4% interest and yet they charge 10-30% on their loans, credit cards, overdrafts, mortgages etc?

    Surely they must be making hand over fist even if you discount the investment side of things?
    Originally posted by Canary Wundaboy
    You're not going to get 30% loan rates out of anyone but sub-prime lenders. Most bank loans will range between 6 and 16 percent APR, with the latter tending to be on smaller loans around a couple of thousand pounds.

    OK, so let's assume that the best account then pays 4% interest. That leaves a range of margins between 2 and 12%APR. Out of this cost comes staffing, admin, facilities (branches, Internet, call centres, processing centres for paper items like mail), the cost of bad debts which will never be repaid, and of course an amount of profit. AND, because of cross-subsidy, the operational costs of other products like current accounts as well - which doesn't just include things like statements, issuance of cards etc, but also things like cash for branches, the writing off of fraudulent transactions, the cost of fraud of all stripes to the business as a whole... everything that happens at a bank, or at any business, costs money. This must be paid for from somewhere.

    Now bear in mind, as opinions4u says, that mortgages can now be around 3% APR, and tell me again retail banking makes hand over fist.
    urs sinserly,
    ~~joosy jeezus~~
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