Friday, December 01, 2006

Banks: a cartel that must be dealt with

Anyone in the UK who deals with a "high street" bank will immediately empathize with the view that these institutions are habitually taking the piss (and anything else they can get) from their customers. And these days "high street" means Bangalore High Street in many cases.

The evidence of the operation of a cartel is so obvious that is a mark of the curious relationship between successive governments and banks that they can operate with complete disregard for the fact that just about every piece of anti-competitive legislation in existence defines how they presently operate as a monopoly that is not in the interests of customers.

Banks have been unquestioningly compliant with President Blair's raft of new privacy invasion measures dressed up as "anti terrorist" legislation, resulting in customers who have dealt with the same branch for over 30 years being required to provide proof of identity. No doubt when the time comes for Gordon Brown to implement his planned 0.5% annual wealth tax, the ever-compliant banks will be co-operating eagerly in order that they are permitted to retain their immunity from competition.

The snail pace at which many of them have adopted technology reflects the lack of any serious competitive pressure. Lloyds' customers still cannot reliably conduct business using email, for example. No bank publishes viable email contact addresses on the web, and most are terrified that email will be used by their staff to do untrustworthy things, so its use is strictly limited to trying to sell the customers junk that they don't want or need.

Yet despite being unwilling to trust their staff with doing business using email, banks are happy to insist that their systems are trusted and infallible, and that there is no such thing as ATM fraud.

The amount of time it takes for payment to "clear" is a very old and very classic chestnut that all banks profit from at the expense of their customers. I suspect it's almost unchanged from the days of stage coaches - yet items on my online credit card statement appear virtually in "real time".

Bankers know full well about the reign of terror they exert, and it is in their relentlessly suspicious nature that they assume that anyone wishing to change banks must have done something dreadful to want to face the trauma and inconvenience of moving accounts.

TMP will deal with these sorry monopolies by devising new ways for the people of the UK to interact with financial services without becoming psychologically enslaved by their banks, in a relationship that persists almost entirely because of the fear of the process of changing banks.

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