'Avoiding Utility Status': Comments of the Week
April 22, 2016 1:07 PM
American Banker readers share their views on the most pressing banking topics of the week. Comments are excerpted from reader response sections of AmericanBanker.com articles and our social media platforms.
Responding to U.S. Bank CEO Richard Davis defending his bank's charging $6.95 for instant payments:
"Merely putting a price on a common, commodity service doesn't in itself instill value. Differentiation is the means to avoiding utility status. If U.S Bank charges for otherwise identical services that others offer at no charge, I very much doubt that consumers will conclude that U.S. Bank is a better value."
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On how GOP candidate Sen. Ted Cruz would plan to target the Consumer Financial Protection Bureau if he became president:
"I'd vote for Ted Cruz for his opposition to the CFPB alone. Unconstitutional agencies and political appointments do not become less unconstitutional with age."
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A reaction to a reader's comment on how banks will inevitably become utilities:
"Differentiation in consumer banking is possible in the areas of user experience, expanded business value chains, and exploiting knowledge of customer's needs. Rest is commodity. For routine processing of savings and checking accounts, why do we need several thousands of banks? Utilities are good enough."
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On Ally Bank's new mobile app that is designed to inspire users not to spend money on indulgences:
"How is an app that shames me and facilitates interventions for my coffee habit 'fun and insightful'?"
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In response to a reader's belief that entrapment isn't a successful business model:
"Of course it is a business model; tried and true. But in the long term, unhappy customers will burn up your overhead in complaints and service requests. That is why so many tech companies simply don't have customer service departments."
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On a court case that could change the legal rationale for ever removing a director of the Consumer Financial Protection Bureau:
"It would not be the 'end of the world' if [current CFPB Director] Cordray were dismissed for cause or otherwise. In fact, it would be a step in the right direction for liberty and free enterprise and a step away from our growing 'nanny state.'"
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On financial regulators trying to get a handle on fintech:
"Try as the regulators might to get out ahead of innovation, they simply aren't geared for it and they shouldn't be. If they were, innovation would likely be stifled before ever getting to the marketplace, where only through trial and error can an innovation be perfected. That won't happen in the conference rooms of any of our regulators."
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Commending U.S. Bank for charging customers who use real-time money transfers:
"If you do not charge for the desired services you provide, you establish those services' values at zero in customers' minds. Transparency and fairness in pricing shouldn't be a controversial issue."
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On why banks believe keeping old core systems is risky:
"Converting from legacy core systems is necessary. But don't think that ongoing development and maintenance costs will go down as a result. The new core will create its own demands."
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