The Barclays/Absa rot in the system ?

On 22 April Times live reported the following : Barclays is set to announce profits for the first three months of the year of £2-billion (R25-billion) this week as it attempts to convince investors that its financial performance merits the £17.7-million compensation package it has awarded to CEO Bob Diamond. On 1 July 2012 it is reported that Bod Diamond was the main culprit in the interest rate scandal and he needs to be fired. Now this guy is the head of Barclays who is the boss of ABSA. It is also said that a fish decomposes from the head downwards. It was also reported today that apparently there were some misinformation fed to the market the past few years and the Sunday times today said it might have been an "oversight" An oversight that took more than 2 billion off their market cap? Nice oversight ! The governor of the bank of England, Sir Mervyn King had this to say about banks in General and it might seem specifically to Barclays "From excessive levels of compensation, to shoddy treatment of customers, to a deceitful manipulation of one of the most important interest rates and now news of yet another mis-selling scandal we can se we need a real change in the Culture of the (Banking) Industry. "

Banks Trick or Treat

http://www.sake24.com/Maatskappye/Finansiele-Dienste/Straf-bankboewe-wat-manipuleer-op-hoogste-vlak-20120628 The Article yesterday about Absa's English Masters and their shenanigans in Europe opens a can of worms that they will not easily get rid of. The integrity of banks have been shaken to the bones and my comments that you cannot trust banks are being confirmed yet again

Absa vs Bond originators

Absa is now totally ignoring the fact that consumers will be in the driving seat in the very near future. The newly drafted consumer bill (hopefully) will come into force soon.

The bank is placing race and politics before consumerism. The recent issue with Solidarity has shown the bank's real colours. (Pun intended) It is all about race.

The same is happening now. The banks consumers who wishes to do business with the bank via a bond originator will not have a choice anymore. You will work with their
preferred provider ( which incidentally was chosen because of its black empowerment status- a race issue again !) The bank is laughing the issue off by hiding behind their social responsibility or some crap like that.

Beware of the group ! Barclays has been implicated in Tax avoidance schemes and is also hiding behind the law. (various articles on the issue available on request)

Isn't it time clients started to vote with their feet ? Showing their soles to the bank as they are leaving ?

http://www.sake24.com/Ekonomie/Absa-strategie-kan-boemerang-20101203

Banks and their customers

Some interesting findings in a survey by Accenture published in Mail and Guardian

In a bid to keep customers, banks are trying to cross-sell to existing customers (87%).About 54% are pursuing new customers and 33% are increasing the prices of their products and services to recover profit.

(How stupid can they be ? Nothing planned in the line of service improvement. They are not taking into account that customers are more and more beginning to be in control and demand service level agreements. Take into consideration that this was a world wide survey. Comment by John Brandow )

"The banks that will win the race to rebuild profitability will be those that recognise their customer relationships have changed for good," said Wendy Pienaar, a senior executive at Accenture South Africa's Financial Services practice.

What do customers want?
In a nutshell, the average person who banks expects more sophisticated customer segmentation (which will deliver more personal service) and wants to define and select banking services. More affordable products and innovative technologies are also required.

The Accenture survey points out that there's a shortfall between service demands and the current capacity of banks to meet those demands.

I rest my case. What case? The one where I say that banks does not understand the word service or relationships



They(customers) are more confident when they make financial decisions themselves and are sceptical of bank brands, moving away from banks that give poor service.



http://www.mg.co.za/article/2010-11-08-banks-will-struggle-to-meet-customers-demands-says-survey

The Consumer revolution

If there is one thing that the moving of all bank accounts by the organization Solidarity from Absa to other banks and the consequence this is going to have on their members is it confirms the fact that the consumer revolution is in full swing. The time of the consumer is here. Big business better take note: Consumers have the inclination and the technology to hit big business hard when they utilize their combined strength. Absa pulled up its nose when they were confronted with issues from Solidarity and now they have to face the consequences.

Recent attitudes from the bank in disregarding their commitments stipulated in the banking code of conduct could easily have the same ripple effect.

One person cannot change Big business. A couple of persons can make a dent
A lot of persons can have a serious effect.

Use your emails! Use your databases. Send emails on bad service - Get masses involved. Start class actions. Vote with your feet ! Walk away from bad service and attitudes. Big corporates are not making you money, they are costing you money. You (The customer) are in control. Accept it and take it !

Does the Code of Banking Practice mean anything ?

The Banking Association South Africa is an industry body representing all registered banks in South Africa.The broad role of The Banking Association is to "establish and maintain the best possible platform on which banks can do responsible, competitive and profitable banking".

The Code of Banking Practice applies to all retail products and services of a bank provided to individuals and certain small legal entities. All banks which are members of the Banking Association subscribe to the Code and are therefore bound by the obligations and undertakings.

As it becomes evident that the code was drafted from this angle it can be understood that it did not have the consumer in mind apart from the very nice words that is contained therein.

Words like the ones quoted above in red. Words that does not mean a thing as the following was considered to be part of the introduction :

None of the provisions of this Code:

will be legally binding in any court of law;
may be used to influence the interpretation of the legal relationship between you and your bank;
will give rise to a trade custom or tacit contract or otherwise between you and your bank.

So although the banks bind themselves to all sorts of promises there is no
method whereby any of them can be taken to task for not abiding by their "Promises"

Absa vs Originators

a cominique that was just released by Absa states that they will not entertain home loan applications from Bond Originators in excess of 40% loan to value. They might have said to them "Get out of our lives" and some words to that extend (The words to that extend cannot be written here)

A few questions arises ;
1. Are bond originators clients of the bank ?
2. If so are they not entitled to consideration in terms of the banking code of conduct ?
3. The bank has not conducted themselves according to any aspect of point 2.15 of the banking code of conduct:

No integrity was shown ( let alone uncompromising integrity)
Fairness cannot even be mentioned
No trust or confidence is being promoted for the industry
(The other banks will follow suit)

Unfortunately the Brandometer cannot go to minus bacause they do not deserve a 0%

A few other questions arises : Why does this happen? As things go it is very evident that bankstaff are nowhere as knowlegable as those in the bond origination industry. They now want to sign contracts with Estate agents to submit applications directly to them - to what end? Estate agents are not trained in any aspect of applications for home loans.

Maybe we must leave it at that and see what the other banks do.