Loyalty to banks used to be a big thing in the days of yore. But the Banking Royal Commission certainly skewered any reason to remain loyal. And there are options for those looking for an ethical bank that listens to their customers.
When I was a child, my father took his business from the Bank of New South Wales (now Westpac) and switched to CBC Bank (now NAB).
The Bank of New South Wales had obviously done something to incur his displeasure. But the reason – which I have never known – was less important than the reality that he had a choice and exercised it.
Loyalty to banks was a big thing. My grandfather – and probably his father – had banked with the Bank of New South Wales. I understand that in those days, banks were generally loyal to their customers.
My father’s exercise of choice could have something to do with the fact that I have accounts with 15 different banks and use many of them for different purposes. In Australia we are lucky that fees are easy to avoid if you have the time to be vigilant.
Until now my favourite bank has been the neobank 86 400. This is mainly because it is not one of the ‘Big 4’ banks, all of which had their predatory behaviour exposed by the banking Royal Commission.
Neobanks are startups with the potential to spoil the party for the Big 4. They have proper banking licences but no branches, and therefore can afford to charge almost no fees and be innovative.
They are more in touch with their customers, and 86 400 has even adopted some features I have suggested.
I told them I’d like to avoid the 3% fee most banks charge for foreign transactions (it adds 3% to the cost of items such as a subscription to the New York Times). They said they’d have to absorb what it cost them, but they did remove the charge a few months later.
The bad news is that NAB announced last month that it has acquired 86 400. NAB has tried to head off competition from neobanks with its comparatively nimble UBank division. Now the scene is set for it to close 86 400, rejuvenate Ubank and further reduce competition in the banking sector.
86 400 is currently my ‘main’ bank, so I am likely to move my activity elsewhere. The most interesting candidate in my suite of bank accounts is Bank Australia, which positions itself as an ethical bank owned by its customers rather than profit hungry shareholders.
It started in 1957 as the CSIRO’s staff credit union. So far my research suggests the ethics claim is justified. Moreover it seems they listen to their customers.
A few months ago I urged them to adopt Fitbit Pay, so that their Fitbit-wearing customers could make tap and go payments with their watches. A few days ago they sent an email announcing their cards are now compatible with Fitbit Pay.
Now I will see if they will come at moving even closer to the nimble and innovative neobanks by absorbing the 3% foreign transaction charge.
Michael Mullins is a former editor of Eureka Street. He now blogs at http://mullins.id.au
Contributions to Pearls and Irritations
Your contribution will fund quality independent comment and analysis in Pearls and Irritations
Contribute
