|
Sunday, July 30, 2006
Convington: Banking on Egg
By Gary Covington
Looking In
MY DAVAO bank -- one of the high street big names -- last week sent me a printed notice advising me of changes (read increases) to their banking charges. Fair enough you may say but at the bottom of the letter was this line, "The cost of this notice has been deducted from your account."
Good of them isn't it? They send me a notice I've not asked for, a notice I can read for free on the wall inside any one of their multitude of branches, and then they have the gall to charge me for it.
How much? I don't know. Postage? The cost of paper and printing? I'll find out the next time I visit the bank to update my passbook and, please God, let it be before I incur any dormancy charges.
Only a banking mind could think up the dormancy charge -- a demand that customers pay the bank for doing nothing. To pay for being decent enough not to have bothered the bank's cashiers with inconveniences like paying money in or, horrors, withdrawing the stuff. With such iniquitous charges is it any wonder that OFWs avoid banks if they can, smuggle cash back with friends, trade dollars on the local black market or simple stuff wads under their mattress?
Still -- lest you think I'm setting out on a Pinoy bank bashing exercise let me tell you how it may, one day, be possible to avoid the high street big name banks and their condescending cashiers altogether.
In the beginning -- and I'm speaking mainly of Britain here -- there was competition and banks flourished because they provided a service and charged little. They made money from investing their depositors' cash. But, as is the way of things, the banks grew rich and powerful and, determined that money should make more money, the needs of their customers slipped to second place behind the need to make more profit. Bank charges and the interest rate on loans rose until the cost of borrowing was beyond the ordinary customer and so were born the building societies.
A building society (some still exist) is essentially a cooperative bank whose customers themselves are the shareholders. "Dividends" come in the form of lower bank charges (very often none at all) and for borrowers a kinder rate of interest.
But -- that but again -- building societies gradually started to look like banks themselves. They offered regular current accounts, checkbooks, plastic and so on, until one day it was decided (by some of them) that they would be better off as real banks. Glossy brochures were prepared (for the shareholders had the vote and could say no) promising cash windfalls for all as the societies went public. The bad news, that control would shift from the members to an anonymous board of directors and that all charges would increase to accommodate the new investing shareholders, was hidden away in the small print.
By the 90s charges both by the high street banks and the hybrid bank/building societies had risen to such absurd levels that it was literally cheaper to cross the country on a bus carrying a sack of money than ask and pay a bank to transfer it for you.
Then, in 1998, a guy named Richard Duvall set up the world's first digital bank. It has no branches -- your computer is your local branch. Egg -- for the bank is called Egg (www. egg. com) do everything and more than a high street bank and because it has no physical branches to maintain or staff to pay its charges are lower and its savings account rates of interest higher. There is even an Egg ATM card and today Egg is the largest and most successful standalone online bank in the world.
Naturally the high street big names don't like it at all are queuing up to buy Egg out and, no doubt, promising that all will be as before but we know better don't we?
For Bisaya stories from Davao. Click here. (July 30, 2006 issue)
Write letter to the editor.Click here.
Join the Sun.Star message board.Click here. |
|
[return to top]
[home]
[network page]
|
LOCAL NEWS
BUSINESS
OPINION
SPORTS
LIFESTYLE
FEATURE
SUPERBALITA
WEEKEND
|
