Aleš Rod, an Expert Analyst at the bank fee watchdog website Bankovní Poplatky
My guest today is Aleš Rod, an Expert Analyst at Bankovnipoplatky.com, which translates as ‘Bank Fees’. Welcome to the studio and thank you for joining us. So tell me about Bankovní Poplatky, what exactly is it?
And it has existed since 2005, is that right?
“Yes.”
And its main purpose is to inform the public.
“Yes, that is our main goal.”
Now the question of bank fees is something that irritates, grates, angers and frustrates many Czechs. Basically, there are fees for banking in the country, which, for example a foreigner who is used to banking in England or somewhere like that finds shocking. So what is the nature of the problem with the fees in this county?
“Generally, we can divide banking fees in the Czech Republic into two groups. The first are what I would call value added banking fees, which means that you demand a service from the bank and it provides this special service. This is just like when you purchase goods in a store. But the second group is absurd fees, for example checking your current account levels.”
When you go to a cash machine and you just check your balance. Just for that, many banks have a fee. And you have a poll, which is probably the most famous part of Bankovní Poplatky, I would say. And once a year, you conduct a public opinion poll survey on the worst or most absurd fee. So tell me about that.
“It’s a kind of award for the banks. And the banks don’t love that because it is negative publicity for them. But it is a poll about the most absurd banking fee of the year in the Czech Republic. The winner goes to the fees with no value added, which are just very easy and free of charge for the bank to provide, but the banks want money from customers for nothing. A classic example is a fee for just the administration of a mortgage account, which again is not value added and costs the customer a few hundred crowns per month for nothing.”
And there are also some really absurd fees like for receiving money?
“Yeah. If someone transfers money into your account, then you have to pay a fee to your bank.”
And there is also a fee for withdrawing cash from a bank?
“Yeah. It is a standard fee in all banks.”
And there is also a fee for having a bank account.
“Yeah. That is also a fee.”
So the obvious question is: why do Czechs put up with this?
“I think that the biggest problem is that Czechs suffer from 'rational ignorance'. So they want to get information about, I don’t know, sports matches, about football, politics, but the really important issue such as the administration of your finances, is number four or five or ten on the list of activities for the average Czech Joe. So that is the problem and we are trying to change that, but it is a very long journey.”
“Yes. I think that that is exactly the point because most Czechs have no experience [of banking] abroad where it is normal to have no account fees and to be able to have an account free of charge, because you are giving your money to the bank and the bank can then use it and profit from your money. So that is the real benefit for the bank, not the charging of fees.”
And is there also a problem with Czechs being resistant or extremely conservative in terms of deciding to change their bank account? That they think it is just too much of a hassle and too complicated to leave the bank that they know and hate and instead find something else.
“That’s right, it used to be like that. But these days, a particular tool has served as a very useful improvement. It is called the 'Codex Mobility' for banking clients and it is very useful because if you want to switch banks, then you just go to your new bank, sign a document affirming that you want to leave your old bank and the new bank arranges all the administration with your old bank and the old bank must co-operate.”
So was this legislated or was this an agreement by all the banks?
“It’s an agreement made by all the banks in the Czech Banking Association.”
And there are a lot of new banks popping up all the time in this country. The example that springs to mind is Fio Bank or mBank and in many cases, they are promising to not have fees or have significantly reduced numbers of fees. So is this a positive phenomenon and is this threatening the quasi-monopoly of the big banks like ČSOB and Česká Spořitelna and so on?
“Yes, last year, for example, we had a refreshment of sorts into the market with the arrival of Air Bank, Equa Bank and Zuno Bank. And these banks are like a breath of fresh air when contrasted against the old models of the sector because they are modern, they are online, they are on Facebook and other social sites and that is an interesting way to be divulging and sharing information, especially to young clients because such people are on these networks. So this is a good strategy in my view, and it seems to be a good strategy for them because they have gained more than 100,000 clients in the space of a few months and the old banks are having to react to this fresh air.”
Have they reacted yet?
“Yes.”
So there has already been some movement? The elimination of some fees?
“Yes, there have. There has been the elimination of fees, the providing of better services and the orientation of the market is much more customer or consumer friendly.”
And the website Bankovní Poplatky, it contains a calculator where people can calculate fees. There is also a clock, which shows the shocking amount that banks have collected in fees, which currently is somewhere around 22.16 billion crowns. So how are the banks reacting to the website’s efforts?
“They try to be friendly because that is obviously a good strategy for them. But we are very independent, for example we have no advertisements from individual banks and we don’t publish PR articles or those kinds of promotional pieces. So I think that they respect us.”
And visitors to the website – do you get a lot of feedback from people who come to Bankovní Poplatky and what kind of things do they say?
“We are not a site for the general public in terms of having millions of visitors each day like classical online media. But we have our base of readers and this base is increasing all the time, and this is something that we are proud of and proof that we are providing a decent service.”
"Yes, I think that it was more than 9 billion Czech crowns [last] year. And our forecast is that due to the freshman, due to the new banks, this year, the increase will be far less sharp – maybe it will be stable or even a small decrease. We will see.”
Aleš Rod, Expert Analyst at Bankovnipoplatky.com, thank you very much for joining us.
“Thank you.”
