Why Competition is Good

Today I went into HSBC bank in Melbourne to open a bank account of the most basic kind on offer.  I didn’t expect much, having tried two or three times before to do the same thing in the UK, without success.  On those previous occasions, they raised objections within a minute or two of my saying what I wanted, and proceeded to reel off a load of bureaucratic hoops I’d need to jump through before they’d make any effort themselves.

Sure enough, the bullshit started quickly on this occasion.  They asked for my passport, then my UK driving license.  They said they needed the latter to confirm my address in the UK, even through I am resident in Australia (with a proper visa).  They asked for proof of address in Australia, which I gave them in the form of an invoice from the serviced apartments company from which I rent my flat (which is all inclusive, so I have no utility bills).  At this, the assistant pulled her face and asked if I could get somebody from my company to confirm this address.  I said I could, but the letter would come from me as I am the local representative of the company, and I set up the accommodation myself.  She pulled her face a bit more and went off to speak to her manager.  After a few minutes she came back with the expected “I’m sorry, but we can’t…” and invited me to write a letter to “HR” – who in my case live in Perth, have never met me, and could no more vouch for my residential address as they could the contents of my pocket.  I in turn invited them to call up the serviced apartments company and verify I was living there, but was met with another, wholly expected, “I’m sorry, but we can’t…”.  Even grudgingly accepting that there is a requirement to go through bureaucratic bullshit to open a bank account, it really grates that certain banks – HSBC being one of them – expect their customers to be the ones to negotiate it, instead of them.  Who the fuck is the customer, here?  So with that, I gathered up my documents and announced that I’d passed six or seven banks on the short walk from the office to HSBC, and I’ll try one of them.

So I did, and entered the Commonwealth Bank of Australia. I chose them because their merchant terminals generally accept my Credit Suisse Maestro card, whereas most others don’t (but that’s a subject for another post).  After a brief wait for somebody to see me, I was sat in a room opposite a helpful young lady on a computer and within 20 minutes I had a bank account number and details of how to access it online, with the password sent via SMS to my mobile phone.  Nobody asked to see my UK driving license, and I wasn’t asked to write letters to mythical HR departments a continent away to verify I hadn’t forged the invoice and was lying about where I lived.  Simply my passport, visa information, and contact details and away we went.  I was impressed.

And that, ladies and gentlemen, is why competition is good.  If one provider is shite, chances are a better one will exist nearby.  In a country where competition is badly missing in a lot of areas, its presence in the banking sector cheered me up considerably.

Incidentally, the reason I tried HSBC first was just to verify if they were as petty and shite as the other occasions I’d try to open an account with them, largely for the purposes of providing blogging material (bank-bashing never gets old around these parts).

And also incidentally, I noticed that all the people I dealt with in both banks were Chinese, and I don’t mean second generation.  The only “Australians” I saw were showing the customers which Chinese girl to go and speak to.  Read into that what you will.

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11 Responses to Why Competition is Good

  1. TNA says:

    Yep, HSBC can be a bit crap. They’ve never really broken into the Australian market, probably a chicken and egg issue related to all the points you raise.

    You got lucky with the Australian bank experience though. Check the small print; are you being charged for having a bank account? Many basic accounts do here.

    If you fancy a really comedy experience, enquire about multicurrency accounts. It’s like the 1970s never ended.

  2. Tim Newman says:

    Yup, they’re charging me $6 per month, and they were quite up front about it. I’ve not got a problem with this, most non-British banks charge you for providing the service. For some reason, Brits got it into their heads that banking should be free, and so the banks make money by offering paltry interest rates and charging extortionate rates for overdrafts, letters, etc. Recently the Brits have all upset about the bank charges and have campaigned for them to be reduced, which will most likely pave the way for non-free bank accounts, which everyone will probably get upset about. Me, I’m happy to pay $6 per month for the convenience of an account and a debit card.

  3. Bardon says:

    Welcome to my recurring and incomplete nightmare. I am currently trying and am three months into it, of opening up two separate business bank accounts with the HSBC. One is in the mid east and one is here, it is probably one of the most bureaucratic and frustrating experiences that I have copped in living memory. The Mid East is hard enough at the best of times, but you wouldn’t expect it here. Especially when we want to give them lots of our money to deposit.

    I don’t have a problem with the list of requirements, I do get pissed off when after you have met them, they introduce other ones.

    So I guess they make it hard to open up an account up, but once you are in the club, you can freely launder your money, deposit drugs and facilitate human trafficking to your hearts content. These guys bankrolled the first major drug trades after all they must know what they are doing.

  4. TNA says:

    “These guys bankrolled the first major drug trades after all they must know what they are doing.”

    Yep, that’s true enough. There’s some dodgy corporate skeletons around the place; Siemens, VW, HSBC, C&W, Standard Chartered, etc.

    I’m happy to pay for banking but the interest rate on credit balances needs to be competitive.

  5. dearieme says:

    Years ago I walked into an ANZ bank in Brisbane to find out how to use my Adelaide account interstate. They insisted on opening a new account for me, at speed, there and then. Competition also works within banks, it would seem.

  6. dh says:

    Opened a HSBC account after 8 yrs out of the country without any problems, same for a multi-currency account (USD). I also got better exchange rates than I could get with the CBA where I have a number of accounts.

  7. PeteC says:

    Your experience with HSBC sounds almost as bad as opening a bank account in France. Here, the opposite is true – the local French banks are shite whereas I’ve had a terrific experience with HSBC.

  8. Tim Newman says:

    @PeteC: from what I’ve heard, anywhere is better for banks than France!

  9. Tim Newman says:

    And another thing: Australian banks don’t seem to do IBAN codes, which makes transferring money in from overseas a bit more awkward. Even the SWIFT code wasn’t straightforward to find, and they don’t seem to have sort codes (but they have a branch identifier, BSB code, instead). Not quite in tune with the global banking system this lot, are they? Still, if I can get the money in and the debit/ATM card works, I’ll be happy enough.

  10. Bardon says:

    As you say, as long as it works for you, that is all that matters. Your bank account fees are also tax deductible just in case you didn’t know.

    Not sure why exactly, but the Big 4 Australian banks must be doing something right as they are now well and truly ranked the most profitable in the developed world pulling in AUD$71m a day. With your new bank (CBA) turning another quarterly stellar performance recently its market cap which is now in excess of AUD$100b makes it bigger than well known multinationals such as McDonalds, Amex or Intel. It has to be near the top for these guys now but who really knows.

    Maybe the superior customer service really does make the difference after all.

  11. Despite the “I” at the front, IBAN is a European standard, not a global standard. A small number of non-European countries use them, but the US doesn’t and neither does much of the world.

    Personally, I have found that the rates offered by both UK and Australian high street banks for foreign exchange are awful You can do much better on both rates and service by using a specialist FX broker. I use these guys.

    http://www.currencyonline.com/

    You have probably discovered Australia’s very non internationally compliant debit cards by now, too. Australians have been using PIN based authorisation for these since about 1985. Once we led the world in this. Now we just have a system other people think is weird.

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