Want them to really listen to you? Cancel your accounts - move to another bank.
This works well as a bluff, but of course you need to be ready to follow through in case they call the bluff. Which if you are, you may as well switch banks for real anyway.
On the face of it, this is not true; net interest margin is still the main profit driver, followed by fees. But besides that, retail deposit customers are a conversion funnel for more lucrative financial products such as credit cards and personal loans.
And besides that, banks need capital reserves in the form of customer deposits; if too much money flows out then they will have to either acquire customers or pause their real moneymaking activity (loans).
Your account doesn't make them significant money. Retail banking in general makes boatloads of money, and deposits are central to this now that we're out of zero-interest-rate-land.
> And besides that, banks need capital reserves in the form of customer deposits
USA's fractional reserve requirement is now 0%. UK has also gotten rid of their reserve requirement as well. In the UK, the limit to what the bank can loan out is more determined by the market cap of the bank (committed shareholder value). Cash is only strictly needed to cover ... customer deposits.
So in the UK, if a bank gets rid of customer deposits entirely, then it kind of doesn't need any cash anymore. It can just lend money out of thin air based on its total net worth (market cap).
> Retail banking in general makes boatloads of money, and deposits are central to this now that we're out of zero-interest-rate-land.
Talking about banking in general is generally a huge mistake. While deposits may be central, retail deposits are irrelevant for the banks that do > 70% of banking.
The bulk of deposits in those banks don't come from individual retail and thus the individual's got no sticking power.
Citibank interest rate on savings accounts is less than 1%, more like 0.1%, and there are account fees too. They're telling you load and clear "We don't want your money" - you can't argue with that empirical evidence, straight from the horse's mouth.
Banks get their reserves by borrowing from the Fed or from other banks that may have deposits. The idea that banks get reserves from deposits is severely outdated. Deposits are free reserves to the bank, but the overhead of maintaining customer accounts makes them an unattractive option.
They get political clout from it. They're keeping the people corralled into a payment system that politicians can easily influence.
Jamie Dimon is the most popular banker in Washington because Chase has (by far) more retail depositors and retail deposits than any other bank. That's power.
This is arguable for HSBC (in the UK at least). Ringfencing laws post 2008 have made customer deposits in the UK very difficult to invest profitably, to the point where (at least last time I cared about this) they were charging commercial customers to have UK domiciled accounts.
> Ringfencing laws post 2008 have made customer deposits in the UK very difficult to invest profitably, to the point where (at least last time I cared about this) they were charging commercial customers to have UK domiciled accounts.
I don't follow; why would regulations on consumer accounts change the price of commercial customer accounts?
Small businesses accounts were/are also subject to ring fencing, and my recollection is that large banks sought to recover the costs of ringfencing rules via charges on large clients.
Come to think of it this was all also at the time of very low rates which was more likely to be the issue.
> Want them to really listen to you? Cancel your accounts
Just loop in your regulators. This costs them far more and properly documents the problem for follow-up in case it becomes a pattern. Possibly more annoying than moving accounts. But far more effective (unless you have nine figures with the firm).
Author looks like they’re in the UK. The UK has a responsive consumer financial regulator, possibly moreso right now than any federal regular in America.
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