Money Minute – October 11 2017 Banks Push for your Trust

Banks Push for your Trust

Many people just don’t trust the banks.

Now, to you that might seem blinding obvious but when the quote comes from this block, the CEO of Westpac’s Consumer Bank, George Frazis, you’ve got to sit up and take note.

Frazis, said in a major speech said amongst other things, that customers feel there is a power imbalance – that bank success and profit were a reason to trust a bank.

But there has been a divergence, in the customers interest and the banks interest and apologising is not enough – Action has to be taken.

So, George announced a couple of things – 1.4 million Westpac customers will have their monthly account keeping fee cut to $5 – generally they pay between $10-$15 a month.

George was a bit shy telling me exactly how much this will cost, but its pretty easy to work out – if you multiple $5 a month, $60 a year for a customer, with 1.3 million customers – that’s about $78 million.

Now the reason banks can do this? Technology is making technology cheaper for them.

You saw it last week when banks miraculously ditched the $2 ATM fee when you use a different bank.

A bigger question is why banks are doing it now…not a year or two ago?

Well, there’s a hint or two in George’s speech where he specifically mentions Apple and Google and their size.

In due course, technology will disrupt banking the way its disrupting retails.

If banks, which are quite large, don’t make new cheap products which appeal to their customers, they will easily lured away by large companies.

And this is where trust comes in and why banks need it after it owned so much of it in recent years.

Today the bank bosses front an parliament inquiry into their behaviour and their still could be a Royal Commission if Labor win the next election.

But what George knows, is the time to win back those customers is right now.

And one thing in the banks favour is this – people are generally asked if they trust banks, and they say no. But asked if they trust their own bank, they say yes.

Markets

Overnight, The Dow Jones up by 52 points, the Dollar 77.8 US Cents.

Quick links to other recent Money Minute articles:

Money Minute – October 10 2017 Energy Crisis Underway

Money Minute – October 9 2017 Home-Buyers Slow Down

Money Minute – October 6 2017 The Dollar Barometer

Money Minute – October 5 2017 School Banks Under Fire

Money Minute – October 4 2017 Debt Warning

Money Minute – October 3 2017 Instant Payments Coming

Money Minute – October 2 2017 Rate Rise Coming Sooner

Money Minute – September 29 2017 “Myer Under Siege”

Money Minute – Thursday September 28 2017 “Trump Delivers on Tax”

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