I really miss my bank in the UK. Sure they hassled me about keeping my address up to date and changing my local bank branch, but they were really good at fraud prevention and their services, in retrospect, were fantastic. The interest on my current account might not have been great, but at least it was there.
In South Africa, banks charge you for depositing money in your account and they charge you for withdrawing money from your account. They charge you for leaving money in your account and not doing anything to it and they charge you for telephone banking. They charge you for writing a cheque and they charge you for checking your balance. They charge you for internet banking. They charge you even more if you use an ATM which doesn’t belong to your bank (and honestly, the ATMs are often out of order). They don’t do anything so pernicious as giving you interest for the money you give them (current account) – no, getting your money is them doing you a favour, and they’ll make damn sure they charge you through the nose for it.
They also have a bewildering and confusing number of conditions and addendums for absolutely everything. Besides the huge number of different types of accounts (there are 6 different savings accounts at Standard Bank, all with different interest rates for different amount bands, with different withdrawal terms and conditions, etc), there are also things like getting charged a different fee for a standing order, a direct debit, a third party payment and a transfer. Some bank accounts are only available to those over 60 – although it doesn’t say that anywhere in the leaflet and only half the staff seem to realise this. Oh and don’t imagine the staff and the levels of service are anything to write home about either. It’s taken an entire lunch break and 2 phone calls to attempt to get my mobile phone number changed with Standard Bank, and it’s STILL not working.
The staff all have different perceptions of the different types of accounts and different charges – which is, you know, actually quite understandable given that they are incredibly confusing. Suspiciously confusing. I suspect they’ve been deliberately made confusing, so people get worn down and just agree to whatever so they don’t have to spend yet another Saturday or lunch break at the bank. What’s the difference between ‘elite’, ‘prestige’, ‘achiever’, ‘plus’, ‘consolidator’, ‘achiever go’, ‘classic’, ‘classic plus’, ‘e plan’, ‘sum’, ‘puresave’, ‘contractsave’, ‘notice deposits’, ‘plusplan’, ‘society scheme’, ‘market link’, ‘call deposits’, ‘fixed deposits’ and ‘moneymarket’? And those aren’t business accounts or anything by the way, they’re all cheque/current accounts and savings accounts.
So, the banks’ justification for their fees is perfectly valid I’m sure – see http://www.ncf.org.za/docs/publications/consumerfair/2005/vol1/bankcharges.html: that it’s not possible for them to not charge because SA is a developing country, because of the high cost of handling money in SA and the fact that most of the population aren’t earning a lot and aren’t using a bank. Here’s another good resource http://www.accountancysa.org.za/documents/ASA%20November%2007-pgs18-29.pdf supporting bank charges.
However (and I’ve admittedly not got much experience or knowledge of the financial sector), it does seem a trifle odd that the response to so few people being able to afford bank charges is to charge them more money. Surely the way to solve the problem is to use the amazon strategy and attempt to get more customers (even if they do have substantially less money) rather than charge higher fees. Having a transparent, easy to understand set of options would stop people resenting the banks and avoiding using them as much as possible, which would mean more money for the banks and a more convenient way for people to manage their money.
Anyway, I don’t object to paying bank fees. No really, I don’t. They could even charge me higher fees and I wouldn’t complain – what’s important to me is that they invest money ethically.
Banks that claim to be ethical do exist internationally. In essence, this means they consider the social and environmental impacts of their investments and loans, and apply various criteria. The Co-operative Bank in the UK refuses to invest in companies involved in the arms trade, climate change, genetic engineering, animal testing or sweatshop labour. GLS Gemeinschaftsbank in Germany focuses on cultural, social and ecological projects, lending to organic farms, health food stores, kindergartens, nursing homes and the like, and is completely transparent about all its investments.
Nothing similar yet exists in South Africa.
I object to Standard Bank charging me such a lot of money and not giving me any interest. I object to the fact that they have too many confusing options and wear customers down with obfuscated bank charges. I object to them not being transparent about who they invest in. And sadly I don’t think it’s worth my while moving to Capitec (who at least have lower charges), because they don’t practice ethical banking either as far as I can see.