EC Consultation on Bank Accounts

Transcription

1 EC Consultation on Bank Accounts Response by the Austrian Savings Banks Association, Part Bank Fees Q 1: Do you consider that the information provided by banks on bank account fees is presented to consumers in a sufficiently clear manner and easy to compare between banks? What good practices could you identify? What are the persisting shortcomings? Do you think that amendments to the transparency obligations in the Payment Services Directive (2007/64/EC) could address those shortcomings? A 1: Yes! In Austria, banks are obliged by law to disclose to the consumer all possible fees in a transparent and comprehensive way. In addition, banks are progressively disclosing fees of the most common services on-line, which can be identified as a good practice. Beside banks efforts, comparison websites exists, set up by stake-holders such as the Austrian Chamber of Labour, which provide consumers with appropriate tools to easily compare fees of different banks. Moreover, the Austrian Zahlungsdienstegesetz which has implemented the PSD into national law makes use of the consumer friendly scope of the PSD. The PSD sufficiently regulates transparency obligations related to payment orders. Q 2: Do you think that standardising bank account fee terminology could help to provide more transparent and comparable information on fees? If terminology were to be standardised, should that standardisation cover all fees or only some of them? If only some of them, on the basis of which criteria should they be chosen? Should terminology be standardised at national or EU level? A 2: No! Banks use a transparent terminology for fees they charge. The terminology is used in an evident and self-explanatory matter, e.g. fee for a payment order by mobilebanking. Therefore, even in cases, where banks use name affixes in order to distinguish themselves from competitors, costumers will be in the position to compare the offers of different banks. Credit institutions offer products and services which are geared to the needs of their clients. If some terminology has to be standardised it should be based on the legal definitions which can be found in the PSD and its national implementations. Hence, the terminology should only be standardised at national level. Credit institutions endeavour to meet the needs of their customers and their services and products are market driven. If terminology and standardisation were too strict there is a danger of hampering competition and influence negatively product variety. Q 3: Do you think that glossaries of terms and standardised lists of bank fees would facilitate comparability? If so, what format and content should this information have? What body/forum would you consider appropriate to develop such a glossary/standardised list of fees? A 3: No! National regulation and banks efforts provide the consumers with comparable information on bank fees. Against the background of financial literacy, however, glossaries Contact: roland.tassler@savings-banks.eu 1

2 might help to increase the overall banking and financial knowledge of consumers. As retail markets are local markets, it is essential that any potential glossary would be developed at national level. Yet, it is important to highlight that there should be no obligation to exclusively use these terms. A standardised list of fees is always problematic with regard to competition law. However, certain terms are defined by PSD and national laws and could be used (see answer to Q2). Q 4: In order to further increase bank account fee transparency and comparability, which of the following tools should be considered: i) comparison websites managed by public authorities ii) standardised cost simulations to be provided by banks iii) standardised representative examples to be provided by banks iv) surveys by consumer organisations/financial ombudsman v) any other tools you consider relevant? Should any of them be made compulsory? What would be the likely costs? A 4: The Austrian savings banks do their utmost to provide customers with a transparent and comparable structure of fees. Certainly, we welcome any initiative by stake-holders to further increase the comparability of bank fees. Ad i) Comparison websites managed by public authorities promise a high level of independency and should be treated with priority if additional measures seem to be necessary. Ad ii) Should not be standardised. Ad iii) Should not be standardised. Ad iv) In Austria consumer protection organisations regularly conduct such surveys. Ad v) Banks should be able to develop products and services in a competitive environment. Standardisation may effect the contrary and infringe on competition. With regard to the likely costs it is important to specify content and requirements of these tools. Q 5: What level of detail should the information on actual fees paid have and how frequently should it be provided to the account holder? Would having comparable information on the fees actually paid encourage consumer mobility, including on a crossborder basis? A 5: The Payment Services Directive provides already for an (optional) high standard of information. Austria has made use of that option. Information on costs incurred by consumers on services related to a current/payment account, levied by the account provider, are made available either on paper (eg by means of an account statement) or on a durable medium on a periodic basis (monthly) and/or are included in his/her bank statement. No. Fees are transparent and comparable. It is the local character of the retail business why consumers prefer not to shop on a crossborder basis. The Commission has recognised this view that retail financial services largely remain a local business 1. Consumers do not usually buy financial products in branches far away from their homes, let alone in another Member State of the European Union. Thus, the cross-border demand of financial services is insignificant. As regards the European Union, a Eurobarometer survey has unveiled that only a low proportion of EU citizens - 5% or less - has effectively bought a financial product in or 1 Commission, Financial Integration Monitor 2005 (Commission Staff Working Document) SEC (2005) 927, 10 Contact: roland.tassler@savings-banks.eu 2

3 from another Member State 2 and the triggers for buying in a cross-border context are largely related to migration 3. The reasons for this home-bias of retail costumers have already been subject to several studies 4. The outcomes are similar and differ only in the ranking of the determining factors. Trust, cultural traditions, institutional heritage and proximity to the bank are the main factors why consumers prefer local suppliers when purchasing financial products. Q 6: What other measures/instruments should be considered in order to improve the transparency and comparability of bank fees? Please describe and indicate at which level (national or EU) you consider they should be taken. Part Switching Q 7: Do banks in the Member State where you have a bank account offer a switching service? If yes, is it in line with the Common Principles on bank account switching described above? Is information on the conditions of switching presented in a consumer friendly manner? A 7: Yes. The recent GfK study on bank account switching has revealed that the EBIC Common Principles is the right approach in terms of simplifying the switching process. As regards Austrian banks, the EBIC Common Principles work effectively. Only one mistery shopper was not able to switch without being provided with a decent explanation. In Austria, the success rate of switching is the highest compared to all other Member States. Nevertheless, EBIC s criticism on the study has to be supported stressing the low number of respondents and that some of the questions being asked go much further than the principles. Q 8: If a switching service in line with the Common Principles is offered by banks in the Member State where you have a bank account, does it remove all obstacles to bank account switching? If not, what obstacles remain? Provide examples of good practices and persisting obstacles encountered. A 8: Yes. Q 9: Should the Common Principles remain voluntary? What do you consider are the advantages or disadvantages of making them compulsory at EU level? What would be the likely costs? A 9: Yes. As noted above, retail business is a local business. Making them compulsory at EU level would be detrimental to the specific national characteristics of consumers needs. 2 Commission, Special-Eurobarometer 202: Public Opinion in Europe on Financial Services (2004) 3 OPTEM, Qualitative Study among Cross-Border Buyers of Financial Services in the European Union (2003) 4 See for instance IPSA INRA, Consumer Satisfaction Survey (Study for the Commission, Health & Consumer Protection Directorate, 2007) Contact: roland.tassler@savings-banks.eu 3

4 Q 10: Should switching principles/measures also cover crossborder switching of bank accounts? No! Payment behaviour depends on local habits (eg use of checks, use of direct debit etc). Therefore it is not necessary that switching principles also cover cross-border switching. Retail business is a local business! For example, the market share of cross-border deposits within the Euro-Zone remained not only low but even dropped slightly from 6.0% in 1999 to 5.3% in Despite the single European currency, the vast majority of funds are still invested in depositors home countries 5. Q 11: According to you, how important is the risk of having receipts, bills and Payments misdirected when switching bank accounts? What measures could be considered to make the switching process safer? Q 12: What obstacles, if any, are still faced by account providers that are smaller or established in another Member State to expand their client base or to enter new markets? Are these connected to problems with switching facilities? Q 13: What other measures should be considered to improve bank account switching? Please describe. Part Access to Basic Bank Account Q 14: Do you dispose of information on consumers encountering difficulties in access to a basic bank account? What types of obstacles are signalled by the consumers preventing them from having access to a basic bank account? A 14: A very limited group of people encounter problems regarding opening a bank account. But the problem is rather insignificant. In Austria, according to Flash Eurobarometer % of Austrians aged between 15 and 79 years have a bank account. The remaining 1% (approx individuals) does either not want or does not get access to a bank account with at least basic features. According to our own estimations between 40,000 to 50,000 individuals do not get access to a bank account. For this particular group of people, the Zweite Sparkasse was founded (see Answer to Question 15). Reasons, why banks do not provide a bank account to an individual, can be based on information on illegal use of banking services, as well as information on prosecution following default of payment. However, also in relation to a basic account the principle of freedom of contract and the customer due diligence principle are important principles which shall be maintained. 5 European Credit Research Institute (ECRI) ECRI News, No. 35 (Spring 2010) 6 Commission, Flash Eurobarometer 282: Attitudes towards cross-border sales and consumer protection (2010) Contact: roland.tassler@savings-banks.eu 4

5 Q 15: Are you aware of any measures taken by banks or other institutions in the Member State where you have your residence to facilitate access to a basic payment account? Have these initiatives been success fully enforced? Yes. To help the socially weak and over-indebted individuals ERSTE Stiftung and Erste Bank have founded the Zweite Sparkasse. This is an independent bank which is run and staffed exclusively on a voluntary basis. It was launched in 2006 and provides Basic Bank Accounts, essentially free of charge, to individuals who are in financial difficulties and are being assisted by a debt advice agency or Caritas. Die Zweite Sparkasse is seen as a route back into a normal banking relationship 7. At the end of 2011, Zweite Sparkasse offered almost 8000 individuals with a basic bank account. Q 16: Do these measures also facilitate access to a basic payment account for nonresidents? See answer to Q 17. As regards Erasmus-Students, we would like to highlight that we provide them with a payment account within minutes. They only need their ID and the university s confirmation of registration. Q 17: If consumers still have difficulties in opening a bank account, what are the reasons for that? Risk of money laundering and terrorist financing: The institutions covered by the AML- Directive shall apply customer due diligence measures when establishing a business relationship; the CDD measures to be taken are as follows: identifying the customer and verifying that customer s identity using reliable, independent source documents, data or information. FATF identifies non-resident customers among those circumstances where the risk of money laundering or terrorist financing is higher, and enhanced CDD measures have to be taken. Q 18: If more needs to be done what additional measures should be envisaged? Should the problem be tackled at national or EU level? There is no necessity for any intervention at EU level. The Österreichischer Sparkassenverband (Austrian Savings Banks Association) represents the interests of all Austrian savings banks. The members of the Österreichischen Sparkassenverband form the Savings Banks Group. The Savings Banks Group consists of Erste Group Bank AG, as the sector's lead bank, Erste Bank der oesterreichischen Sparkassen AG, the Zweite Wiener Vereins-Sparcasse (the bank for people without a bank), the 48 regional savings banks and their subsidiaries (association partners). Savings banks in Austria differ from other sectors of the banking industry by their commitment for the people in the region, by having their roots in the regional economy as well as their close links with the local authorities and their high level of involvement with the professions as well as private customers. These characteristics prove themselves especially during the present financial crisis and, thus, set apart savings banks positively from the centralised joint-stock banks. 7 CSES-Study On the Costs and Benefits of Policy Actions in the Field of ensuring access to a Basic Bank Account, , Contact: roland.tassler@savings-banks.eu 5