EDITORIAL WEDNESDAY 29.07.09.
I have lost count of the number of times I have lambasted banks in general for the various fees they charge their customers. I have repeatedly pointed out that there is no justification for charging the customer for things which rightly should be overheads. Account keeping fees? Well if banks did not keep account, no one would deposit any money with them and what would they do then? ATM fees? But we were told that ATMs were cheaper than providing over the counter service and would save us money, not cost money. Application fees? I’m sorry, but do you really want to charge me a fee for filling out your forms and offering myself as a customer who will add to your profits? I should be charging you! In fact, once upon a time I might have actually earned interest on the money I deposited with you for you to invest in lending to other people at a profit! Well good luck with that these days when the transaction fees take out far more than interest paid will ever cover! And of course, the so called exception fees, when you charge me a whopping great penalty for having insufficient funds even when it is not my fault that I was not paid on time.
It really is a crime that the banks have been allowed to get away with this nonsense for so long. These days, the bank robbers are the executives sitting behind their polished mahogany desks, high in their headquarters high rise offices, beyond the reach of ordinary people like you and me. The great irony is that for years I have pointed out that if banks really want to attract more customers, all they have to do is to actually deliver the friendly personal service that they all spend millions of dollars on advertising. It was also I who pointed out that instead of closing branches, banks should be opening them because having an extensive branch network is the point of difference which gives them an enormous competitive advantage over their cheaper non-bank rivals.
So it comes today as a wonderfully pleasant surprise to see the news that the National Australia Bank has decided to follow my advice, or at least part of it. The NAB has decided to drop the very nasty $30 exception fee for overdrawn accounts. This is the fee which has been slapped onto customers who have been the victim of a mistimed automatic payment or a delayed paycheque, and which results in the ridiculous outcome where a $10 overdraught becomes a $40 overdraught simply because the bank has the ability to reach its cold boney fingers into your bank account any time it damn well pleases. Well, ten out of ten to the National Bank for recognizing reality that it is far better to reward its customers than it is to punish them.
It has been suggested that the bank could go further in cutting back fees and charges, and that’s true, but it is a decision which should be applauded in its own right. Not only will it remove a draconian injustice from the bank’s fee structure, it will set the standard for other banks to follow, and they are almost certain to do exactly that. If they don’t, surely customers will be enticed to drop them and move their business to the NAB. This is exactly how good competition policy is supposed to work, and it vindicates my point of view that the best form of advertising and promotion for any business is to actually deliver the service that suits the needs of the customer.
So, well done to the National Australia Bank. But let’s not stop at that. Now, let’s get to work on abolishing all those other fees too.