Essential banking services
It all started off at the turn of the millennium when banks’ interest rates started to plummet until they disappeared. Never have account holders saved so much and earned so little on. These days the only reason for not stashing your cash in a secret spot at home is security or to avoid landing in hot water over unexplained wealth orders. Nonetheless, we could live with low interest rates. After all, investors shifted their focus on avenues such as stock, shares and bonds.
However, what happened after that left a bitter taste if not a feeling of betrayal in view of the fact that as years rolled by essential banking services were increasingly coming under threat. This was the result of a strategy whereby banks embarked on a “restructuring” exercise which boiled down to closing down branches, increasing red tape as well as an array of hefty charges. As if that was not enough, banks seem to have decided that all of its account holders were criminals by default. Hence, even the most basic operations like opening a new account have become a daunting task. This raft of regulations did not spare voluntary organisations and small businesses, who are being expected to manage their respective entity on the lines of a big multinational company.
Ironically, central banks and financial institutions have never been more reliant on banking services. This has led to an absurd situation whereby bank branches have become a thing of the past at a point in time when it has become virtually impossible to do without a bank account. It seems customers are the ones paying the heaviest toll. Furthermore, the Covid-19 pandemic seems to have accelerated this process as nowadays large segments of the Maltese Island are devoid of a bank branch. In Gozo, the only banks left are all concentrated in Victoria, while in the north of the Malta, HSBC and BOV clients have no other option but go to Mosta. Though customers had been promised they would be served through ATMs, they are being left completely stranded whenever these are either out of order or suffer a technical failure.
It is hard to believe that in 2022, there are long queues outside banks as if we were living through the great depression. Something is fundamentally wrong. It is also an issue of corporate social responsibility. The plight and ordeal being faced by bank customers are also being raised at political level, with various MPs flagging this unacceptable situation.
Banks are not operating in complete oblivion or with impunity as they are answerable to regulators and watchdogs. The current scenario dictates some kind of intervention, be it at government level or by the regulator in order to safeguard basic fundamental banking rights. There needs to be guarantees that face-to-face services remain part and parcel of banking. Though there is nothing wrong in promoting automated and internet-based services, this should not come to the detriment of traditional over-the-counter services. If need be, banks of a certain size, or those who are in a dominant position, must be obliged to have a minimum number of branches. If not we risk having a sector of our society deprived of an essential service.