It seems like hating banks is the new black nowadays. Financial companies found themselves in the remarkable position of having government permission to gamble with their clients’ money, and with the recent bailout and stimulus packages, they’ve learned that their losses will be covered by someone else. Government and big business have been closely tied together ever since the first politician realised that corporations could donate far more than any one individual. It’s only now that we’re starting to see the true extent to which special interests influence (and in some cases, outright control) our government. Every day, we’re hearing more and more about how lower and middle-class families are suffering, money is being squandered, jobs are disappearing, homes are being seized, and the people who caused this whole mess are either making more money than ever, or taking their million-dollar bonuses and getting out of Dodge. I have some fun arguments with a libertarian friend of mine, and we disagree completely about the solution (he thinks the free market will correct itself if the ties between government and business are severed, I think businesses have proven that they cannot be trusted to police themselves). But we both agree that the current situation is unacceptable.

I want to talk about the smaller battles you have with your bank, though. Not home foreclosures, Ponzi schemes, investments or anything like that; just the simple act of getting access to the money you already have, when and where you need it. It seems like a simple enough concept. Walk into a bank, ask for your money, give them your number, and walk out with your cash. Now that ATMs are prolific and most stores accept debit cards, you don’t even need to ask. It’s just accepted that armed with a magnetic card and a PIN, you can use your own money however you want. What you (and I) usually don’t consider is that by setting up a bank account, you are essentially giving your money to someone else and trusting them to give it back to you. And if you really read one of those user agreements they made you sign, you may find out that they don’t have to.

Last week, I needed to do some banking that my debit card didn’t account for. I needed to have cheques issued to give to my landlord, and I needed to set up a tax-free savings account. I thought it would be a painless procedure, as both of these are things that a bank probably deals with on a regular basis. I present for you a dramatic re-enactment:

“I’d like to have some cheques printed for my landlord.”

“Sorry, we don’t offer that service.”

“What? Other banks do. How am I supposed to pay my rent?”

“You can order some cheques from our website, they will be mailed to you in 5-10 days.”

“What’s the cheapest option for buying cheques?”

“It’s $30.00 for a set of fifty cheques.”

“But I only need eight cheques.”

“We don’t offer that.”

OK, that’s unacceptable and you’re probably just too lazy to find the cheque paper, but I guess I’ll try to convince my landlord to take the money electronically. What about the TFSA?

“Sure, one moment.”

<five minutes later> “Follow me, you’ll need to speak to one of our personal bankers.”

<five minutes later still> “Sorry, you’ll need to speak to one of our investment specialists.”

<five minutes later again> “Sorry, you’ll have to make an appointment to come back when we’re less busy.”

That’s about the point I left. I was pissed, sure, but only for a few seconds, because then I had a revelation. This bank was charging me $10 a month just for keeping an account open with them unless I keep a $3000 balance, and gave me an interest rate of exactly zero. They had taken a lot of money from me in various fees over the years, and in that time, not once have I ever managed to do anything other than make a basic withdrawal without fighting them tooth and nail. When I wanted to transfer money to my account in the UK, they wanted me to send them a signed fax. A fax! In 2009! I don’t even know anyone who owns a fax machine! It’d be easier to just stuff all money under my mattress!

I ended up going back to my old bank (no fees, unlimited chequing and debit, and an interest rate higher than zero) and getting all the services I needed right away just by asking for them, including the savings account. But when it comes down to it, the mattress plan probably isn’t a bad one. The whole point of using a bank account for daily transactions is because it’s more convenient than carrying a big stack of cash everywhere, and if it turns out that a bank account is less convenient, why bother? With a mattress, I’d know exactly where all my money is at all times, pay no service charges, never have to find an ATM, never worry about what cards businesses take, and get exactly the same interest rate as I’d get at many banks. I’d have to worry about being robbed, but I do that already, and with the economy the way it is, the money under my mattress is probably still a lot more secure than your average investment portfolio.

But the experience highlighted an aspect of banks that’s bugged me for years; they are absolutely terrible at adopting technology. While the rest of the world blazes ahead with digital signatures, secure authentication and incredibly robust web applications, banks are still essentially dependent on paper-based forms. If I want to sign up for an account, I have to find a personal banker, fill out a form with all my personal information, hand it to him, and let him enter it into his system. Why can’t I enter all that information through the bank’s website? Not because the process is complex or the technology isn’t advanced enough; the bank simply doesn’t care to change the way it works. Some banks let you print off single-use cheques, some don’t. Some let you transfer money electronically from home, some don’t. We’ve finally started to get debit and credit cards with those digital chips in them, but guess what, it takes twice as long for the transaction to complete than it did using the old magnetic stripe. And if you want to do any kind of non-standard transaction, you can’t just e-mail them; they need your signature by either letter or fax, a technology that was invented specifically because things like PDFs and e-mail didn’t exist.

If I create a PDF of a letter containing instructions for my bank and fax it to them, they’ll accept it. But if I e-mail them the same PDF and they print it off, they won’t accept it, even though both contain nothing more than a printed copy of my signature. Just think about that for a second.

It’s not entirely the bank’s fault, I’ll admit. That pesky Sarbanes-Oxley act requires financial institutions to keep up to 7 years of paper copies of every single transaction that goes through them, so maybe I should be blaming the government. They locked the banks’ paper-based business practices into place with legislation, and the banks seem to be using that as a way to ignore the fact that technology is passing them by. Remember the “paperless office?” It fell apart as soon as companies realised they needed some kind of legally-binding way of entering contract, and the current state of digital signatures requires everyone involved to have a fairly in-depth knowledge of cryptography. My mom says the first person to invent a way of digitally signing documents that is legally admissible will be a billionaire, and I’m inclined to agree.

But let’s be honest, it’s 2009. I should be able to do all my banking via my bank’s website, e-mail and maybe telephone, but even that’s being replaced by web applications nowadays. That should include opening accounts, paying bills, setting up automatic transfers, and sending money from my account to someone else, no matter who they bank with and where their account is based. And if the bank is going to prevent me from doing what I want with my money, they’d better have a much better reason than “because we can’t do that.” Yes, you can do it, you just never bothered to find out how. And until you do find out, you have officially lost my business. Now if you’ll excuse me, I have to go make a withdrawal from my bed.

money, politics