I had to pinch myself yesterday as I absorbed the headline “John Symond defends banks’ decision to pocket rate cut” (check it out, and the reactions, at Lending Central)
What the….? Is this THE John Symond. The world really has changed.
When John Symond starts defending the banks you know something is wrong. The problem is, there are no challenger brands left, at least not on the lending side. In recent years the most successful challenger brands in lending have been Aussie, Wizard and BankWest. They have connected with consumers in a way the old players just cannot do, and have brought really strong products to market. And surprise, surprise, all were successful in attracting large volumes of customers away from the big banks.
So how does Commonwealth Bank respond, by competing with them on product and marketing? No, they take them out of the market instead. They bought BankWest, bought a stake in Aussie, and Aussie bought Wizard and swiftly killed the brand entirely. So we wake up today with a very different world where competition in banking is just not what it was. And that’s bad news for consumers.
So essentially Commonwealth Bank is now left to develop products and marketing as they see fit. Here’s an example I just saw on a banner ad this morning – “No annual fees forever on the Low Fee MasterCard. That wasn’t so hard, was it?”
No, it wasn’t hard at all. Which is why I want to know why it took so long to do it? The no annual fee ever promise has been in the market for 6 years.
But worse than that, let’s look behind the headline message and see what the offer really is. Clicking it takes you to a page which then says:
“No annual fee for Commonwealth Bank customers who take up a new Low Fee credit card and spend $1000 per year. Annual fee $24 for non-Commonwealth Bank customers”
So in fact it isn’t even a no annual fee forever card at all!! And why market something on a widely shown banner ad that is actually only available for your own customers?? And never mind the fact that the interest rate is 18.49%.
When product development and marketing is left in the hands of the big banks it’s not happy times for consumers unfortunately. Let’s hope some new challenger brands are on the horizon, because Australians need them.