I have a gripe about all the chatter regarding the bank with the lowest fees.
Say, hypothetically, that you’ve been diagnosed with a severe but benign tumour in a part of your body that’s difficult to operate on – let’s say, in your brain. Which surgeon are you going to pick to perform your operation to remove the growth? The cheapest one? Or the best one? Now hold that thought.
Every bank has some system in place to manage their transactional banking. There’s an online component so that customers can interact with it through their phones or computers, and an offline component that deals with liquidity, risk management, settlements and reports. The best systems have the best capabilities (they can offer share transacting as well as prepaid airtime top-up), the best security (nobody likes their account cleaned out by hackers) and the best management tools, so that the staff behind the scenes can offer customers better lending rates, quicker quotes on home loans and offer products best suited to their customers.
Now, would you like the cheapest system, with the lowest level of functionality and lowest level of security?
Every bank also has staff, scattered across the country in branches and head offices who do what bankers do – deal with clients, decide on credit extensions, and take advantage of free Friday afternoons when they all close at 2pm or something ridiculous. But the best people cost money. The best people will more than likely tend to your query quicker, be better at understanding your personal circumstance, and probably offer better investment advice.
So I ask again.. Would you like a wet-behind the ears newbie and their team of dead wood dealing with your money and life’s savings every day? I didn’t think so.
There is a point of optimal efficiency, where smart people have invested correctly in technology, and the product, quality of service and related fees are at their best possible position. Some banks are doing this better than others, and it will likely ebb and flow as the years go by. But if you’re only worrying about fees – then please be happy for some relative of Og to come and collect your money with his grubby mits. Given the importance of money in your life today, and more importantly, into retirement, it’s advisable to pay for a bit of value.
Do you agree?