Why banks don’t want Cash and you should

Something different this week: I read with interest the statement by the  ‘Commonwealth Bank of Australia CEO Matt Comyn’   ASX:CBA at the senate hearing in regards to the closure of regional branches.

These are some interesting points:

“We spend $1 billion each year on our branch network and we pay tens of millions of dollars to Australia Post in order to maintain Bank@Post services.”

“Every year, we invest more to enable the digital economy including over $750 million a year protecting our customers from financial crime, cyber threats, scams and fraud.”

“On the other hand, continuing to offer non-digital services also involves continued expense.

For instance, transporting and making cash available around our vast country involves the considerable expense of logistics and security.

We estimate that continuing to support distribution and availability of cash costs CBA $400 million each year – which works out to roughly $40 for every one of our 10 million customers.”

Conclusion and notes:

• The bank makes and continues to make profit for their Share holders of course, not for the benefit of their customers. They do not do unprofitable things for altruistic reasons. 
• Commonwealth Bank Australia (CBA) hints that they are working on the justification for charging fees on bank transactions when using their App. Is it a stretch to say that there will be a future business decision to charge ‘micro-transaction’ App fees ?-  I think it is a fair assessment in this context. 
• Commonwealth Bank Australia (CBA) are now App developers and not interested in providing traditional and basic banking aka cash provision services. They are pivoting to providing banking services on a subscription basis. They most likely want to send you ads based on purchase history. Very poorly though out for a CEO but at least its transparent.
• Commonwealth Bank Australia (CBA) hints that they probably are going to charge you fees for using ATMs because 3rd party ATM providers are. Note that 3rd party ATMs charge fees because that’s how they make money. Besides if you use cash they can’t on sell your purchase history to others. They sell ad spots based on your personal data and any hence are inherently selling you out without you knowing or claiming not to sell your personal data. 
• I wonder how much the banks charge these 3rd party ATM providers their own usage/transaction fees or perhaps licenses and the CEO assumes that people are stupid enough not to know?
• As for the closure of branches – well it is clear the bank has no idea about the micro-economics of physical closure and indeed the PR fallout on the street or it’s bank and business reputation. On a macro level this sort of thinking lead to the current supply chain crisis. Regardless the CBA doesn’t care but probably they haven’t thought about it. 

It can be assumed correctly that other banks are watching the public response from this statement.

Finally it shows that the CEO and their management teams and marketing in particular are out of touch with its customers and the current economic environment. Do I predict a Qantas moment coming up for the banks or the CBA? Hmmm.

Use cash folks – save on surcharges and stop the leak of personal information to organisations who don’t care about you. Change banks if you must. Make the bank work like bank not a marketing agency for personal data. 

Part 2