Comment by timcobb
5 days ago
> “You hold my money” should be enough
The thing is, people like GP don't seem to realize that holding their money is not much of an asset to these banks. Like, at all. Maybe no that interest rates are higher. But in general, you're not doing them any favor. My understanding is that holding retail money is a loss leader for most banks. Unless GP is ultra wealthy, they're not doing the bank any favors by giving them their savings or whatever.
Banks absolutely make money on retail deposits, and you definitely are doing them a favor by putting your money in.
Banks do spend a lot on marketing to acquire a given customer, and will then upsell that customer on more profitable products like loans and credit cards. But having a high customer acquisition cost and then upselling is not quite the same as being a "loss leader" (which sort of implies that marginal profit is negative, which is definitely not true).
> which sort of implies that marginal profit is negative
Was it not when interest rates were low, like when LIBOR was near zero? My understanding of that era was that many retail banks were working to shed retail deposits. Holding money was not profitable in that era, especially retail. And today I would still suspect it's not what banks are going for big picture.
interest rates being low doesn't mean banks stop making money on retail deposits. there is still a spread between the interest they pay to the account holder and the interest they make loaning out that money.
Okay, but here: I pay my main bank 2€/month to have my account. Am I not a customer? I didn’t ask them for favours. I pay for my account, my partner has insurance with them, we buy bonds and their insurance products, etc. But since their app is so immensely bad, we’re slowly moving to a different bank.