Anyone with access to a microphone and a decent social media following has been screaming about the greedy bank being un-Australian, tin-eared to the financial plight of many of its customers and opening the gate for other banks to follow.
And with CBA boasting the largest retail customer base of any bank in the country, it’s easy to see why its move drew such swift rebuke from all quarters. The head of CBA’s retail banking services Angus Sullivan told A Current Affair on Tuesday night the last thing the bank wanted to do was upset customers.
But that’s precisely what it has done. The idea was a serious miscalculation – and its architects shouldn’t be looking for a bonus this year.
It looks likely that no one inside the CBA understood the blowback risk of the move, particularly how it measured up relative to the financial reward.
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One weird thing about the whole affair is CBA’s suggestion that migrating the 1 million customers who have a “Complete Access” account to the “Smart Access” account won’t generate much if any revenue and won’t make a dent in the $400 million a year it costs the bank to handle cash.
The main reason for this is the vast majority of CBA customers using either account don’t actually take out cash from the branch. Those who use cash can still access it from the ATM or from other places like supermarkets without paying the $3 fee. And vulnerable customers like pensioners and under-18s will be exempt.
Additionally, the monthly account-keeping fee is lower on the “Smart Access” account than on the “Complete Access” account.
So if it’s not about making money, why do it at all?
It looks like CBA’s main motivation to migrate customers to “Smart Access” accounts is more of a housekeeping exercise, aimed at streamlining the number of different transactional accounts.
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Presumably, this will cut some costs, but any savings would unlikely be enough to make up for the embarrassment the bank has suffered.
All banks would love to see the end of cash, but it’s a radioactive issue.
Keeping it flowing through the system comes at an estimated cost of more than $1 billion a year and is part of the reason banks need to keep open expensive branches. Meanwhile, the federal government has already declared that retaining the ability to transact with cash for essential goods would be mandated.
So, the dwindling percentage of CBA customers that want to access cash via branches are effectively being subsidised by those who bank digitally.
The banks would like to speed up the process of banking becoming a fully digital affair, but CBA has found out the hard way how quickly a simple and mostly benign change to transaction accounts can become a debacle.
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