I don't necessarily know where this post is coming from in terms of what spurred it but take it for what you will.
My thinking is starting to drift towards splitting the financial sector in two; one side being heavily driven by profit and investment, with the other being centered on basic banking services. I think the first needs profit in order to operate at peek efficiency, why else would you lend someone money who you dont know unless it was to make a return on your investment? The second however is should be more centered around defraying costs, not making money.
Think of the alternatives to bank accounts and the costs that it would incur if we did not have them (or people were priced out of having them). As a result people would have to carry and store more cash (possibly in a shoe box or under their mattress). One would assume that they would not carry their thousands of monies on their person for fear of losing it or it being stolen, and if that were the case they would probably be less likely to make large purchases as well as to make impulse decisions. If debit cards do anything they make it easier for someone to spend money (as well as for retailers to take money) so why would someone who is looking to turn a profit want to take that tool out of a consumers hand? By instituting fees and pricing out the "un-banked" you are inhibiting consumer spending.
I see two alternatives to our current system of banks leaching off of consumers.
1) Governments get into the game in order to lower the use of cash as well as spur spending, while I think this would be a great idea I don't foresee this being something that will ever happen, maybe in small wealthy nations but even then I assume currency is used very infrequently to begin with (rich people use rewards based Credit Cards).
2) Major retailers (like WalMart) get into the game and offer money losing accounts simply to get you in their stores or lower their operational costs (I can see Amazon getting in to this or Apple). You all ready see this with specific banking institutions who offer free basic services on the chance that you may use their other services For instance Charles Schwab offers a great banking service for free on the condition that you open a free investor account with them, they don't force you to use it but if you want to it is there.
I haven't quite wrapped my head around my exact feelings on this matter but I'm getting there. To me it makes sense in the same way that Google does everything in it's power to get you to look at more pages on the internet. The more pages you look at the more ads they can put up, the easier it is for you to manage and spend your money the more you are going to spend it. Banks are in this scheme just middle men, they are a barrier between the consumer and the retailer, and I don't think they are going to be in the way much longer.
My thinking is starting to drift towards splitting the financial sector in two; one side being heavily driven by profit and investment, with the other being centered on basic banking services. I think the first needs profit in order to operate at peek efficiency, why else would you lend someone money who you dont know unless it was to make a return on your investment? The second however is should be more centered around defraying costs, not making money.
Think of the alternatives to bank accounts and the costs that it would incur if we did not have them (or people were priced out of having them). As a result people would have to carry and store more cash (possibly in a shoe box or under their mattress). One would assume that they would not carry their thousands of monies on their person for fear of losing it or it being stolen, and if that were the case they would probably be less likely to make large purchases as well as to make impulse decisions. If debit cards do anything they make it easier for someone to spend money (as well as for retailers to take money) so why would someone who is looking to turn a profit want to take that tool out of a consumers hand? By instituting fees and pricing out the "un-banked" you are inhibiting consumer spending.
I see two alternatives to our current system of banks leaching off of consumers.
1) Governments get into the game in order to lower the use of cash as well as spur spending, while I think this would be a great idea I don't foresee this being something that will ever happen, maybe in small wealthy nations but even then I assume currency is used very infrequently to begin with (rich people use rewards based Credit Cards).
2) Major retailers (like WalMart) get into the game and offer money losing accounts simply to get you in their stores or lower their operational costs (I can see Amazon getting in to this or Apple). You all ready see this with specific banking institutions who offer free basic services on the chance that you may use their other services For instance Charles Schwab offers a great banking service for free on the condition that you open a free investor account with them, they don't force you to use it but if you want to it is there.
I haven't quite wrapped my head around my exact feelings on this matter but I'm getting there. To me it makes sense in the same way that Google does everything in it's power to get you to look at more pages on the internet. The more pages you look at the more ads they can put up, the easier it is for you to manage and spend your money the more you are going to spend it. Banks are in this scheme just middle men, they are a barrier between the consumer and the retailer, and I don't think they are going to be in the way much longer.
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