Uninspired Profits in Banks


Fees without service is called Uninspired Profit. Most banks are really good at it.

It took a 2 year national inquiry for the real skillset of Australia’s banks to be revealed in all of its glory: Uninspired Profit generation.

The Australian public were not really surprised when the Royal Commission set up to investigate our banks. It reported that the banks were profiting from charging us too many fees. While it was gratifying to have it out in the open, most of us already knew it from firsthand experience. Australians had grown so accustomed to paying arbitrary bank fees that we forgot that it was actually illegal for companies to charge fees without providing a service. Our banks then became so good at charging fees without service that they found ways to extract them from dead people.

The betrayal of Australians by the banks reached a new low in late 2019 when we discovered that at least two of our four major banks were systemically enabling money laundering. Not just a few transactions a year, millions of transactions a

year. Money laundering sounds relatively harmless until you follow the money trail to reveal everything from drug trafficking to modern slavery.

Just as we thought we’d heard the worst of it, we now know that Australia’s financial services industry has been selling insurance illegally. Mostly over the phone to vulnerable Australians who are already experiencing high levels of financial insecurity and anxiety.

The banks have a long journey ahead to regain our trust. It is not impossible, but it will take more than luck and some incredibly heavy lifting by resilient and committed leaders to turn things around. All we can do as Australians is wait, see and pray that either a set of more trusted brands take over the role and privilege of delivering financial services into our communities, or our traditional banks and their investors make the necessary investments to actually create products and services that add value.

If anyone outside Australia watched our banks in awe as they made it comfortably through the Global Financial Crisis while other banks globally were crushed. You can now be assured that it was not the unique and brilliant skill of our banking leadership here in Australia, it was indeed the fee-paying Australian public who funded their comparatively comfortable ride through that crisis.

For just one example of the gold standard in rip off banking that we uphold here in the Pacific, see this article on the Commonwealth Bank. As part of a long list of penances, they now also have to repay $12M to 30,000 customers who were sold life insurance unfairly over the phone.

Our apologies in advance if this is not the latest example by the time this commentary posts online. Indeed, more to follow.

Publication: November 19, 2019