In a manifesto published today, a collective of associations is displaying 16 proposals for achieving universal financial inclusion. Among them, some are looking for ways to restore trust between banks and their users.
A group of associations, led by Secours Catholique and UFC-Que Choisir (1), publishes this Tuesday a manifesto for universal financial inclusion. 16 proposals which, for the most part, are intended concretely improve access to banking and financial services people in financial difficulty and/or with a disability or illiteracy, but also asylum seekers.
Some, however, have a broader scope, concerning all users. They affect in particular two pillars of the banking relationship: the advisor’s status and the pricing of services. With the ambition to restore a form of trust between the bank, an institution as essential as it is feared, and its users.
Guarantee the impartiality of the bank advisor
Is your bank adviser a simple interested seller? Or one ally, who cares about defending your interests? Support, when you are faced with financial problems? Or a referee, quick to sanction you if your budget slips? As retail banking in France operates today, it is all at once. It’s probably too much.
Among the 16 complaints published as part of the manifesto, the 12th proposes to reaffirm the role of the bank adviser, who must be impartial and must put the interests of the customer before that of the bank. How to do? Giving him more autonomy, says Aurlien Soustre, member of the Financial Sector Advisory Council (CCSF). Management continues to put pressure on sellers to sell profitable products, notes the former banking executive. Giving more autonomy to the adviser, without obligation of results, would allow him to rediscover the taste for doing his job and to create a lasting and healthy relationship with his clients.
This development should necessarily be accompanied by a reduction in the variable part of the remuneration of advisers. Admittedly, today account managers are no longer interested individually, but they continue to receive commercial objectives and fill in collective sales tables, at branch level. They partly determine the amount of their annual bonus, alongside more qualitative criteria, such as the enrichment of customer files or the number of appointments made. But in the end, the variable part remains the essential complement to a fixed remuneration which, moreover, is far from being spectacular.
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To get out of the ambigit, another way is possible: strengthen their position as an expert advisor, it’s clear. Like financial investment advisers (CIF), client managers could specify, in a suitability statement, to what extent the proposals made meet the objectives defined with the client and his profile.
Desensitize banks to incident fees
Two other proposals in the manifesto relate to pricing policies in the banking sector. The first is an old request from consumer defense associations: the establishment of a capping banking incident fees for all customers. The second calls for a reform of the banking economic system, with the introduction of responsible pricing, providing real services to consumers.
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How much do these incident fees bring to the banks? In 2017, two consumer associations, Unaf and INC, estimated the windfall at 6.5 billion euros per year. A figure that has never been confirmed, but never denied either. One thing seems certain: these fees are extremely profitable – the UFC-Que Choisir evoked in 2018 an average margin of 86% – and weighs heavily in the turnover of retail banks.
Beyond the question of the amount in absolute value, there is the problem of distribution. Incident costs, in fact, weigh heavily on already weakened households, those who can’t make ends meet and live repeatedly discovered. A particularly sensitive subject in these times of high inflation.
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Admittedly, caps, required by the public authorities, have made it possible to limit the bill for customers identified as fragile, whose official number is 4.1 million at the end of 2021, according to the Observatory of banking inclusion of the Banque de France . But there are holes in the racket: their real number is estimated at more than 8 million by the National Union of Family Associations (Unaf).
French banks thus give a disastrous image: that of institutions that are hard on the poor and soft on the rich. The wealthiest customers have leverage that allows them to negotiate certain fees or access very low-cost mortgages. Calling into question this opposite solidarity would restore the confidence of users.
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(1) Secours Catholique-Caritas France, Emmas France, APF France Handicap, UFC-Que Choisir, with Rural Families and the Trade Union Confederation of Families