Banks. Friend Or Foe?

We had a recent discussion amongst the Bucharest Expat team about the banking profession, and it turns out that we all grew up believing that bankers were to be respected and trusted. Over the year this illusion has been increasingly eroded to the point where none of us have any faith in it (the banking system) any more. At this point it is worth highlighting that the discussion was based around the services provided by the retail banks, not their investment brethren that recently tried to destroy the global economy gambling money they didn’t have in pursuit of bonuses that they should not have been earning (in relation to their real world contribution…).

The experience of the British expats on the team was mostly favourable when recalling the service provided at home, although receiving additional bank charges from Barclays for exceeding the overdraft limit triggered by other bank charges was not a highlight. The service provided by First Direct has been more positively remembered as it has been exemplary for more than 20 years; totally free of any charges and with access to courteous telephone assistance 24/7 and a very easy to use website.

Moving to other countries in Europe has therefore led to some surprises. Having to pay for a credit card that is in effect a debit card was an early painful lesson. Having to fight to get a proper credit card (i.e. a card where you settle the bill on a monthly basis) was a bigger surprise, but you learn to take these little bumps in the road as part of the rich tapestry of life. This acceptance is made easier when you see that the ease of acquiring credit vehicles (mainly, you guessed it, credit cards) has led to some people taking on serious levels of debt that they are now trying to reduce, and this was one of the contributory factors to the severity of the financial crisis in the UK.

We can now consider the following from the point of view of an American expat in Romania. The past few years have been something near a nightmare for many in the US. The media itself has been laden with feature after feature, and headline after headline of customers falling victim to the latest banking “technique” (or swindle for those of us see the light). We’ve already named Barclays, so without further ado we’d love to introduce to you our next ‘bank of shame’; Bank Of America.

Let’s set a few ground rules before we begin:

1.     Bank Of America has learned well from the English form of customer taxation (sorry, charges). They have indeed thrust this concept in to the banking system with extraordinary force.

2.     We have fees as well. Then we have more fees. We even have fees for fees. Once we get our fees, we then incur additional fees. Said fees incurred then miraculously spawn additional fees with extra fees.  Consider these “value added fees”.

3.     When Americans travel “abroad” that, in banking terms, means travel within the United States but away from their local branch. There are no other countries, let alone any reasonable banking system in those other countries that don’t exist.

4.     Most of any US Bank’s employees live and work in India.

5.     US banks don’t actually carry any cash on hand. The US is one large Ponzi scheme, as is our banking system (remove from your mind for a moment the fact that our printing presses run at less than half the speed of our debts).

6.     In order for one to make a deposit in said “bank”, one must now provide a valid government ID, a credit card, and your fingerprints. No kidding. Bank Of America is NOT the government. Please keep in mind that our Country does NOT have a government run banking system… the banking system is run (as well as currency printed) by the privately owned Federal Reserve and largely themselves as self governing is more efficient.

So all is not rosy in countries where the banks have had a long history of developing their customer service offering, but some banks (well FirstDirect so far) do appear to have made some evolutionary steps in the right direction. So you know that all is not perfect.

Then you discover banking in Romania.

It will come as no shock to discover that the banks in Romania (mostly divisions of larger international companies based elsewhere in Europe) are serious profit sources within their broader organisations. This is because the banks in Romania will charge you for pretty much anything that they can. This includes making cash withdrawals from an ATM (devices originally designed to save the cost of employing bank personnel for such basic services) or from the bank (up to a maximum of RON 500). The banks are probably looking to charge customers for making movements between their own accounts within the same bank. This already includes making a transfer to your spouse. This includes using their usually not very good Internet based services (which can get slightly better if you pay larger amounts of commission on a monthly basis). American users may be recognising some of this

We tried to understand why the banks are so nakedly ripping off all and sundry to reach the conclusion that it’s because they can (as ever). In the past services were so poor that to get any element of service in Romania was such an improvement that people were prepared to pay for it. The banks, sensing the opportunity, charged in (apologies for the originally unintended pun) to make the most of this. As it is not really in the interest of any bank to seek competitive differentiation by shooting the goose that regularly lays this golden egg, charges continue to be levied for every imaginable transaction. The expats in the banks in Romania must look upon this and wonder how they get away with it. Then again, they are probably also watching the local politicians and wondering exactly the same.

Now take this scenario, sprinkle in some Romanian customer service (a series of “Nu stius”) and their business sense apparently borrowed from the life of Al Capone and you’ve got yourself a day in the life of banking in Romania.

Romanian banks appear to have been designed to serve themselves… not their clients. Why else would some of the most popular banks feature the names of prominent local citizens? Could they not come up with names more creative, like “Trust” or “Savings”…? These are no longer the people’s banks (if they ever were).

So we find ourselves facing the situation that any new expats, particularly from the UK and possibly the US, will still be in for a big (and not very pleasant) surprise if they go into the bank today. Are there any short-term alternatives? Not that we are aware of, but if you do have any positive (non criminal!) suggestions then please feel free to share them with us….

Additionally, Bucharest Expat (and our fellow expats) seem to share a common “way of thinking”. That being said, we’d like to recommend a few resources to our readers.

Many of you may already be familiar with Robert Kiyosaki, best selling author of the “Rich Dad, Poor Dad” series of books as well as creator of a financial education board game named “Cash Flow 101”. Recently, Robert Kiyosaki has released his first ever online book entitled “Conspiracy Of The Rich”. This book discusses the “hijacking” of the US (and World) banking system and how it impacts the lives of you and I. Go Now To Conspiracy Of The Rich.

Those of you who are even remotely interested in the corruption of the banking system have probably amassed your own “bookmark” portfolio of pertinent websites from around the web. These sites are filled with “theories”, rants, complaints, defenses, videos… and so on. One of the sites that we keep returning to on a regular basis is www.Inflation.us. This site has a very well-done video section that covers everything from why the banks rip people off so blatantly to the US, and World-wide real estate “bubble”, to inflation and future outlook. Some of the videos may seem a bit extreme at first, but you WILL take away some great information. Check them out!

For Those That Aren’t Quite Up To Speed On Your Banking B.S. Here Is A Vid For You: