50 ways to leave your banker

As expected the renegade banking inquiry was not able to achieve its main aim without our Australian banking masters making an appearance. Those trans-Tasman financial corporates bypassed the chance to reveal to the Labour/Green/Jim Anderton alliance why they're making so much money in these supposedly tough times. But do we really need a parliamentary inquiry to discover that banks are bastards?

Despite the banker boycott, at least one interesting idea has come out of the inquiry thanks to local hero Sam Knowles, head of Kiwibank. Knowles floated the concept of portable account numbers with individuals able to switch between banks while avoiding much of the messy administrative process in applying for a new account.

Knowles suggested this would remove much of the consumer inertia that banks rely on to keep disgruntled customers on their books. The thought of filling out application forms and familiarising yourself with new account numbers, passwords, bank staff, etc... is a powerful disincentive to change. Banks know that, which is why they go after the kiddies with those cute piggy banks and low fee (for now) accounts.

I think Knowles is on to something. Portability really could add a dose of consumer power to the banking equation. New Zealanders can already change their KiwiSaver providers and phone companies, for example, without nearly as much administrative hassle as it takes to close a bank account and open a new one.

But more work needs to be done on the downstream effects of the one-bank-account-for-life concept. There are always unintended consequences of 'simplification'. The portable phone number, for instance, has rendered the 021/027 prefix an unreliable indicator of which company is supplying the telecommunications services, screwing up the multitudinous 'phone a friend' discount schemes on offer.

As a discussion  on the Telecom Users Association of New Zealand (TUANZ) website reveals: "Portability has brought great benefits, but... it has also introduced traps for unsuspecting customers and as more numbers get ported the scale of the problem will increase."

I sense another parliamentary inquiry coming on.

 

David Chaplin

 

 

Pictured:  Kiwibank chief executive Sam Knowles speaking to the Opposition banking inquiry this week.