Why are bank accounts so complicated?

A BBC report today says that some popular current account packages are having their fees increased substantially.

The change in Santander fees – announced in September – will see customers paying £60 a year, instead of the previous fee of £24. The charge for its 123 credit card rises from £24 a year to £36.
Last year the Santander account proved very popular, with more than 27,000 people switching to it in a single month. But experts said that – even after the changes -it still offered relatively generous interest payments of up to 3% a year, and cashback of up to 3% on some household bills. “Don’t jump ship until you’ve done the maths,” said Hannah Maundrell, editor in chief of advice site Money.co.uk. “To put it simply, you need to look at how much you’re earning in interest and cashback. If it’s less than the new £60 a year fee you need to take it as a wake-up call to seriously consider your options.”

Why should people need to do complicated calculations to figure out whether their bank is scamming them? Obviously, this is a rhetorical question. I know, sort of, that banks see current customers as locked in, so they are motivated to provide a minimum of interest and service to them, while trying to dislodge a few customers from other banks with some flashy (but inexpensive) offer.

Barclays has said it will double its cash rewards programme for those who take out an account this month. Marks and Spencer is already offering incentives worth up to £220 to anyone who switches.

The article cites experts arguing about whether the banks have been forced to charge more because of increased costs, or whether they are padding their profits. But even have to raise the question shows how pathological banking has become. It’s the consumer

Every few years I find myself in my bank, needing to spend half an hour talking with a customer-service drone about why the Super Privilege Advantage account doesn’t pay interest anymore, but if I switch to the brand new Club Lloyds (really) Account I’ll get interest (varying amounts depending on my balance, increasing up to £5000, and then cutting out after that.

By the theory of the competitive market, you might think that someone would see an interest in providing simple financial services, to people who have better things to do than discuss their half a percent interest with a bored bank employee for half an hour every year or two.

What is it about pirates?

The Daily Telegraph quotes our mild-mannered PM, speaking at the Lord Mayor’s Banquet in the City, saying he wants Britain to show an “entrepreneurial buccaneering spirit”. Why are comparisons to pirates seen as favourable*? Indeed, if he had commented on the City’s “piratical spirit” they would have evicted him from the square mile. Even if you think that 17th century pirates set a remarkable example of untrammelled human spirit of liberty, or something, suppose you asked, what sectors of our society suffer from too much respect for propriety, social norms, and the law? Is there anyone (Mr Cameron excepted) who would spontaneously reply, “You must be talking about the finance industry”?
Do you want to know who showed an entrepreneurial buccaneering spirit that Blackbeard would have been proud of? The young people who plundered London shops in 2011 and set several of them ablaze. I don’t recall any expressions of admiration from Mr Cameron then.

* There are multiple traditions of the use of the word “piracy”. As I discussed here, Internet piracy, pirate radio, and European political pirate parties, all draw on an old tradition of  “pirate” as an opposition to overreaching restraints on free exchange of ideas. But “buccaneering” is clearly meant to refer to the real guys with ships and guns.