NAB disrupts fee status quo
(31 July 2009 – Australia) National Australia Bank (NAB) has disrupted the status quo on bank fees with the announcement that they will go it alone and scrap the $30 overdrawn account fee on personal transaction and savings accounts.
In an environment where sentiment towards banks is on the decline, NAB has attempted to bolster its reputation and stand out from the Big Four pack by getting rid of what it describes as the most complained about of all bank fees.
These fees currently impact on around 700,000 NAB personal transaction or savings account customers a year, the bank said.
NAB, in explaining the decision said that it is important that it improves the relationship with customers by providing help, guidance and advice. Getting rid of these fees will certainly help, which is why the bank is making this decision, NAB said.
From NAB’s perspective, not only will it free up the time at the call centres, but NAB believes it will also make them more competitive; giving NAB customers a stronger relationship with the bank and the expectation that customers of other banks will take a look at NAB.
NAB said that this is a final decision, there are no disclaimers, no reversing the decision and importantly no recouping of these fees somewhere else.
RBA data released in May found that banks in Australia were raising about A$1 billion in exception fees, including dishonour, late payment and overdraft fees.
Now that NAB has upset the status quo, its Big Four competitors could soon follow suit, so as to not lose any competitive advantage. A Westpac spokesman reportedly said the bank had been reviewing its fee structure and had already removed the dishonour fee from its basic account only.
ANZ spokesman, Paul Edwards, said the bank was aware of customer concern about the issue, and was already considering a range of options, with an announcement to come in the coming weeks.
Similarly, CBA said in a statement that it had been on the cusp of announcing a significant reduction in fees in this area.
These fees currently impact on around 700,000 NAB personal transaction or savings account customers a year, the bank said.
NAB, in explaining the decision said that it is important that it improves the relationship with customers by providing help, guidance and advice. Getting rid of these fees will certainly help, which is why the bank is making this decision, NAB said.
From NAB’s perspective, not only will it free up the time at the call centres, but NAB believes it will also make them more competitive; giving NAB customers a stronger relationship with the bank and the expectation that customers of other banks will take a look at NAB.
NAB said that this is a final decision, there are no disclaimers, no reversing the decision and importantly no recouping of these fees somewhere else.
RBA data released in May found that banks in Australia were raising about A$1 billion in exception fees, including dishonour, late payment and overdraft fees.
Now that NAB has upset the status quo, its Big Four competitors could soon follow suit, so as to not lose any competitive advantage. A Westpac spokesman reportedly said the bank had been reviewing its fee structure and had already removed the dishonour fee from its basic account only.
ANZ spokesman, Paul Edwards, said the bank was aware of customer concern about the issue, and was already considering a range of options, with an announcement to come in the coming weeks.
Similarly, CBA said in a statement that it had been on the cusp of announcing a significant reduction in fees in this area.
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