h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Of late, especially in Australia, banks have come under fire from increasing fees on less profitable banking accounts, while posting record profits year on year. This practice has done nothing to enhance their reputations as good corporate citizens in the eyes of many over here. Especially when you think most people who will have accounts that are not terribly profitable fall into the categories of pensioners, welfare recipients and low income earners.
A case of the rich getting richer and the poor subsidising the growth...

I have banked with some pretty dodgy banks including one in a country that had better remain nameless where all the people with the same surname were put into the same account, but I have never found anywhere that equals the naked greed of Australian banks. Unless you're a mathematical whizz, you pay every time you write a cheque or use a debit card. Statements are charged for and the charge for closing an account (sic) and sending the money to UK was steep
The result is that it is worth being a pick pocket as you're likely to make a lot of cash.

I seem to recall that the government here in the UK is talking of getting a bank set up, sponsored by the state for the socially disadvantaged who for whatever reason are excluded from the standard banking system. They would be able to access accounts from post offices (If I remember correctly). Seems to me that they're off to set up the girobank again, after it was sold off under one of the previous governments (to the Aliance and Leicester I think).

I seem to recall that the government here in the UK is talking of getting a bank set up, sponsored by the state for the socially disadvantaged who for whatever reason are excluded from the standard banking system. They would be able to access accounts from post offices (If I remember correctly). Seems to me that they're off to set up the girobank again, after it was sold off under one of the previous governments (to the Aliance and Leicester I think).

I'm sure I didn't post that twice, oh well.

There has been talk of late (very early stages) of making the banks better corporate citizens by legislating to stop them penalising poorer accounts. But since we went through deregulation years ago that was supposed to make them all more "competitive", I doubt it will happen.
With the introduction of GST (VAT equivalent) pensioners had their welfare payments upped to compensate. But the latest is banks skimping on interest rates on those particular accounts, penalising them further (and in less obvious ways).
Naked greed describes them perfectly...

It is all perfectly simple. If you lend me money, for a term, then after that term I pay you back and give you some more money (interest) for your trouble. Similarly if, say, I rent a house, then I give the owner of the house money for there trouble.

In the same fashion, if I set up a checking account and lend money to the bank, then they... um.... CHARGE ME FOR IT???

Banks are businesses like any other. They owe a responsibility primarily to there shareholders, not to the socially disadvantaged - that is the role of government. Maintaining branches etc. costs money and it should not be without some charges attached. For example, it costs the large (read inefficient) banks money to maintain accounts with low balances - please name if you can another business that you would expect to sell a service at a loss.

The problem is that the larger banks exploit peoples unwillingness to change the way they do their banking and make these fees astronomical. The way to stop this exploitation is education, not regulation. Before deregulation in the eighties and nineties - you may not have been charged fees, but any real interest received was nominal and one had to soil one's nose to get a loan. Do we really want to return to that?

If you look around you'll find there are plenty of alternatives - so use them. A smaller bank in th UK is currently advertising heavily the fact that its rates are 20 times that of the larger banks. And then there are the internet banks.

Most banks are charging to deal with them in any form, not just over the counter. After searching for the lowest possible bank charges recently when we refinanced our mortgage, I was appalled to find that even though I wanted to deal with banks exclusively via Internet, they were still going to charge me to look at my account balance, transactions, as well as transfer money for bills, etc. I am still being slugged for taking money from ATMs, EFTpos, etc, etc. I do not use checks, and the last time I stood in a line at a branch was to open this latest account.

As for businesses that subsidise unprofitable customers with the profitable ones, all businesses do this, it's only recently with the advent of CRM (customer relationship management) technology and datamining/analytics, that businesses such as banks are now able to discern between those types of customers, and discriminate accordingly. The only reason people get agitated about banks doing this is WE HAVE NO ALTERNATIVE but to use them - it's actually legislated we need a bank account for our superannuation and most people's employers now do not hand out paychecks that you can stash under the mattress! Everything is electronically dumped into a bank account. So most people (usually the least educated, poorest and therefore least able to go hunting for any alternatives) don't have an option.