Australia’s biggest bank has learnt an important lesson in how not to irritate the public and politicians, especially when it comes to a decidedly “consumer unfriendly” measure amid a cost of living crisis.
On Tuesday, Commonwealth Bank (CBA) said it would move all customers with a “Complete Access” account to a “Smart Access” account, which includes an “assisted withdrawal fee”.
This $3 fee would be charged every time a customer took cash out from bank branches, post offices or arranged a withdrawal over the phone, but not when they took out cash from ATMs.
It’s a pretty gutsy move for any large company to announce a hit to the hip pocket of consumers, no matter how minor, at a time when politicians from all sides are falling over themselves to champion the cause of the cash-strapped public.
Labor’s Financial Services Minister Stephen Jones was first out of the blocks on Tuesday calling CBA’s move a “kick in the guts” for customers, accusing the bank of taxing Australians who want to access their cash and adding that the government won’t stand for it.
CBA’s subsequent decision on Wednesday to partially walk back the proposed $3 fee for cash withdrawals from its branches is its version of damage control. It’s not a backflip, but the bank is slowing the introduction of the proposed changes and will now consult individual customers who will be affected.
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.
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.
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.
So if it’s not about making money, why do it at all?