Cashless society

[JohnDe]

Yes and I would like to see more domestic airlines, to bring down prices, unfortunately they keep going broke too, because of competition.
By the way I get a better term deposit rate with the small bank than the big 4 offer.
There is lots of things in life that could be better, then again there are lots of things in life that get changed and then they realise they would have been better left alone.

Comparing banks to the airline industry is like comparing a family dinner with a restaurant.

As for fearing that without the big four our banking system would fail, that is exactly what they want you to believe and speak.

Another big for with similar consequences -

 

[JohnDe]

An interesting read, follow the link for the full article.

Cash Versus eMoney – Pros, Cons and Predictions​

Will Cash Survive?​

Already credit cards introduced in the 50’s, debit cards in the 60’s and more recently mobile payments have threatened the survival of cash. Still a report in 2018 showed that cash is still used for 30% of payments made in the US. Older people, lower-income people, those less technically minded and those making low-value transactions are more likely to rely on cash. Younger, middle-to-upper income and technically adept people look for the more convenient and faster use of emoney. Mainstream financial systems holding physical cash may have an advantage over emoney by being able to offer attractive services and financial products. These financial institutions need to be aware of the threat emoney poses and be prepared for the disruption virtual banking may cause to the traditional banking world. The new players, disrupters and challenges could one day replace traditional banks. To survive banks will have to alter their business model as digital monies increasingly threaten to replace them.

When and How will eMoney Dominate Finance?​

eMoney is a little like a private investment fund where you’re guaranteed to get your deposited funds back at face value in the future. This comes with some risk as you rely on the issuer to be able to pay out the required sum when you want to redeem your funds. Before we can do away with paper money and coins there are social issues that need to change. There are many benefits and disadvantages to going cashless. For the unbankable and bankless, low-income and older generation it will be extremely difficult. How do you give a beggar on the street a few pennies with emoney, or pocket money to a young child or buy from a pop-up country market? Although there will be lower crime involving stealing cash let’s not forget cybercrime and the possibility of theft of digital “cash.” Money-laundering will probably find a way to continue without physical cash.

Pros and Cons of eMoney Replacing Cash

Pros:​

1. More convenient in many ways than cash
2. Storing and depositing funds becomes less time consuming
3. Handling of emoney is more cost effective than managing hard cash – less man power is needed, less time and less effort.
4. When traveling currency exchange becomes effortless in a digital emoney world
5. Criminal tax evasion will be near to impossible if all funds are digital and trackable.
6. Transactions anytime, anywhere.
7. Reduced transaction costs.

Cons:​

1. People still doubt the long-term stability of digital money.
2. Personal data can be exposed and breached.
3. Hackers could drain your digital bank account.
4. Technical problems could shut down access to accounts.
5. Low-income, bankless, unbankable and elder customers will find it difficult, if not impossible to manage with emoney digital accounts and payments.
6. Low-value transactions are more convenient with cash for most people.
7. Controlling spending may be harder if you don’t see the physical cash slipping through your fingers.
8. Banks may dramatically increase the cost of their services to compensate for loss of clientele.

 

[sptrawler]

Comparing banks to the airline industry is like comparing a family dinner with a restaurant.

Comparing our banks with a bank in a small European country is no different, you just chose what is an acceptable analogy.

Your arguments are all over the place, with very little basis other than your personal opinion, you say there should be more yet the four pillars was brought in by Keating to ensure there couldn't be less than four.

If there was room for more, more would be there, AMP has a major bank license, Macquarie bank could ramp up, I can't follow what you are getting at.
When deregulation was brought in many overseas banks tried to muscle in, but couldn't compete with the big 4 and left or downsized.
I don't really think you know what you are arguing about.

As for fearing that without the big four our banking system would fail, that is exactly what they want you to believe and speak.

I didn't say that, I said I don't think the population could support more than four, what are you getting at?

Another big for with similar consequences -

The four pillars policy was instituted in 1990 by Labor treasurer Paul Keating to prevent any merger between Australia's major banks — the Commonwealth, Westpac, National Australia and ANZ — to maintain a competitive banking market.

 

[JohnDe]

Comparing our banks with a bank in a small European country is no different, you just chose what is an acceptable analogy.
Your arguments are all over the place, with very little basis other than your personal opinion, you say there should be more yet the four pillars was brought in by Keating to ensure there couldn't be less than four.
If there was room for more, more would be there, AMP has a major bank license, Macquarie bank could ramp up, I can't follow what you are getting at.


I didn't say that, I said I don't think the population could support more than four, what are you getting at?


The four pillars policy was instituted in 1990 by Labor treasurer Paul Keating to prevent any merger between Australia's major banks — the Commonwealth, Westpac, National Australia and ANZ — to maintain a competitive banking market.

Now you're letting your emotions get the best of you, your argument is lost and you are angry. I'm not trying to offend you, I have only been answering what you have been stating.

"The bigger the better IMO"​

"There isn't many countries that can say that"​

"Australia has a population of 25million and they only have so much money to spread around"​

"the amount of competition, in a lot of ways, is a reflection of how much money there is available to support it"​

"I guess we have differing opinions, life's like that."​

" Governments of both sides, seem to think the same as I do"​

"And there are larger countries thriving too, your point is?"​

"It is a bit like our telecommunications sector, Telstra was a Government owned monopoly"​

When the 1987 stock market crash happened, some of our major banks nearly folded​

"By the way were you working during the 1987 stock market crash?​

and so on....​

Yes, I was working in 1987.

It may be best if you re-read what happened, the causes and fallout, and eventual changes to help protect our system. I know what you are thinking, 'see, changes that protect our system'. That is fine, if nothing else changes, but that is not how the world works. We are seeing massive changes to our monetary system, Emoney looks lie the future. this mean that our governments and regulators have to be on thier toes and not be lulled into a false sense of security.

Black Tuesday: lessons from the crash​

​

This weekend marks the 25th anniversary of the most traumatic day in the history of the Australian Securities Exchange: October 20, 1987 or, as it was dubbed at the time, Black Tuesday.​

​

On that historic day, the sharemarket opened 25 per cent down. Heavyweight stocks traded at only three-quarters of their price the day before and many lightweight stocks did not trade at all because there was no market in them.​

​

A mere month earlier the market had been on the crest of an unprecedented boom, largely thanks to an exuberant bunch of entrepreneurs, or great white sharks, as they were sometimes called. Australia has always had corporate cowboys, but in the 1980s they suddenly had access to almost unlimited finance.​

​

Foreign banks were trying to break into the Australian banking system at the time by what is politely called lowering credit criteria and more coarsely known as hairy lending. The worst example was Hongkong and Shanghai Bank’s support of Alan Bond through its Australian subsidiary, Wardley.​

​

When Wardley’s Australian manager, Michael Bato, tried to rein in the aggressive Bond, the latter flew to Hong Kong, saw the bank’s chief executive, “Uncle" Michael Sandberg, and Bato was forced to resign.​

​

The Australian banks met this competition by making even hairier loans. One of the worst examples was Warwick Fairfax , who raised $2 billion from ANZ Banking Group – on the strength of not much more than a phone call and possession of an MBA from Harvard – to take over the family company (today known as Fairfax Media and publisher of the Weekend Financial Review).​

​

The great white sharks, having been thrown the keys to the bank vaults, embarked on monumental takeovers, which drove up share prices.​

​

Institutional investors, who had lowered their exposure to equities early in 1987, watched the rising market and decided they had to buy back into equities, driving the market further. On top of that, foreign investors poured into the Australian sharemarket, accounting for some 30 per cent of turnover.​

​

These factors drove share prices to dizzying heights, with the All Ordinaries index hitting a record 2312 points on September 21, 1987. Over the next four weeks it lost 160 points, closing on Friday October 16 at 2145. A retraction like that from an historic high is not enough, by itself, to make investors panic. After all, the All Ordinaries had risen 30 per cent during that September, so some retracement was tolerable. What happened next wasn’t.....​

Black Monday (1987) - Wikipedia

en.wikipedia.org

 

[sptrawler]

Mate, you are trying to backfill the hole you dug, you thought the Govt wont allow more than 4 major banks. Lol

 

[JohnDe]

Mate, you are trying to backfill the hole you dug, you thought the Govt wont allow more than 4 major banks. Lol

I don't know what you are trying to say. I stand by my original comment -

"And further comment about our banking competition -

Australia's four biggest banks continue to get bigger, increasing their market dominance and making it harder for smaller banks to compete in the already consolidated industry.​

​

The bigger banks can generate returns on equity above their cost of capital, "but for smaller banks it's tough given they have a funding and operating cost disadvantage," Zaia said.​

​

Big getting bigger​

​

Although the big four still compete among themselves, the high market concentration has been a concern for the Australian banking system. In recommending changes to the industry, the Royal Commission, which investigated misconduct in the nation's financial services industry between 2017 and 2019, stopped short of top-to-bottom reform, though it found irregularities and illegal practices by banks.​

​

As Australia's big banks keep getting bigger, competition concerns grow

The concentration of the four biggest lenders in Australia has long been a concern for the nation's banking system. This was accentuated by Australia and New Zealand Banking Group's A$4.9 billion acquisition of Suncorp Group's banking unit in August.

www.spglobal.com

"​

​

And then you started - The bigger the better IMO

 

[sptrawler]

Yes knock yourself out.
When I get back from lunch, i'll post.

 

[divs4ever]

The four pillars policy was instituted in 1990 by Labor treasurer Paul Keating to prevent any merger between Australia's major banks — the Commonwealth, Westpac, National Australia and ANZ — to maintain a competitive banking market.

in recent years there has been persistent urging for several regionals to combine into a 5 MAJOR however that consolidation has often raised competition issues on other levels , for instance SUN ( before it divests the banking arm ) ABA and BOQ , and to a lesser extent MYS all have significant QLD exposure

and BEN doesn't seem interested in playing mix'n'match

 

[divs4ever]

Big getting biggerAlthough the big four still compete among themselves, the high market concentration has been a concern for the Australian banking system. In recommending changes to the industry, the Royal Commission, which investigated misconduct in the nation's financial services industry between 2017 and 2019, stopped short of top-to-bottom reform, though it found irregularities and illegal practices by banks.

i could expand on the bank's ' competition via a former to level insider . but ASF might get into hot water , sooner of later

let's just say there is more 'competition between COL and WOW

Hayne was a nice start ( or the usual whitewash gone awry )

 

[againsthegrain]

in recent years there has been persistent urging for several regionals to combine into a 5 MAJOR however that consolidation has often raised competition issues on other levels , for instance SUN ( before it divests the banking arm ) ABA and BOQ , and to a lesser extent MYS all have significant QLD exposure

and BEN doesn't seem interested in playing mix'n'match

I went to buy a new mattress from a big furniture store. Once we agreed and did paper work took out 2k in cash since I got paid by a client in cash and it was a weekend... the people at the store said they don't take cash.
Long story short I didn't want to use funds from my savings account not to break the monthly requirements to receive interest, sale wasn't made.

 

[sptrawler]

in recent years there has been persistent urging for several regionals to combine into a 5 MAJOR however that consolidation has often raised competition issues on other levels , for instance SUN ( before it divests the banking arm ) ABA and BOQ , and to a lesser extent MYS all have significant QLD exposure

and BEN doesn't seem interested in playing mix'n'match

That would make a lot of sense.

 

[JohnDe]

i could expand on the bank's ' competition via a former to level insider . but ASF might get into hot water , sooner of later

let's just say there is more 'competition between COL and WOW

Hayne was a nice start ( or the usual whitewash gone awry )

The big banks are like insurance companies, they have honed the art of smoke and mirrors. Trying to compare the differences requires a professional, and most young homebuyers are already struggling to put a deposit together.

As an investor I have nothing against the big banks, we have done very well by them. But as the Banking Royal Commission showed, those banks have done pretty well through some dubious means and pretty much got away with a smack on the hand.

Regulation is fine, as long as it adjusts and changes with modern society and new technology. One good thing about good competition is having unincumbered ideas turn into benefits.

Take the automobile industry as an example, look at the old USSR with their copied 1960's Fiat's while the rest of the world had moved into the 1980's.

Too much competition is bad, but so is too little. At the moment the big four banks have too little competition, they seem to be a protected species in Australia.

 

[sptrawler]

If there was a bigger market, the overseas banks would be growing their customer base here, there is nothing to stop a conglomerate from buying AMP's banking license and growing the business.
There is nothing to stop Macquarie from becoming the 5th pillar, only the fact there is more money and less hassle, in investment banking.

If there was money in it someone would do it, their debt to equity ratios aren't for the faint hearted and as can be seen when covid hit NAB $15 in an instant, so it kind of shows a lot of their perceived strength and profitability is an illusion.
One of the main reasons the Governments are worried about hitting property, it is a much safer bet digging up iron ore, than running a bank.

 

[qldfrog]

On the side digital vs physical:
Dealing with CBA, I have a bit of rewards points thru credit card use.
I went on the site today and the Coles gift cards .. physical ones..were cheaper than the digital ones..
It is usually the opposite and it makes sense.
so I will wait and pick them in the mailbox.
Was puzzling unless they are getting rid of their last physical cards and will go pure digital?
Not exactly cash but a good analogy.

 

[farmerge]

On the side digital vs physical:
Dealing with CBA, I have a bit of rewards points thru credit card use.
I went on the site today and the Coles gift cards .. physical ones..were cheaper than the digital ones..
It is usually the opposite and it makes sense.
so I will wait and pick them in the mailbox.
Was puzzling unless they are getting rid of their last physical cards and will go pure digital?
Not exactly cash but a good analogy.

Pretty well something for nothing. We just take the cash when the points get to the required number. For us the card is a free loan for the month and the the reward is the bonus.

 

[qldfrog]

Pretty well something for nothing. We just take the cash when the points get to the required number. For us the card is a free loan for the month and the the reward is the bonus.

Same here, so far never missed a payment and free shopping with points

 

[sptrawler]

I found this interesting -

The current level of competition between bank and non‐bank providers is difficult to assess as many non‐bank providers are funded by the major banks. Meaning there is a lot of smoke and mirrors in the market place.​

https://www.aph.gov.au/DocumentStore.ashx?id=37536f4c-68db-453d-abb3-c9b37096792c

By the way John, did you happen to google the author of the opinion piece? Obviously a very active and motivated person.

Another couple of submission that are interesting.

https://www.pc.gov.au/__data/assets/pdf_file/0003/226758/subdr118-financial-system.pdf

https://www.pc.gov.au/__data/assets/pdf_file/0011/222410/sub046-financial-system.pdf

Also ran for the PUP party in Victoria.

Judge dismisses bid to have Victorian election result declared invalid

A Supreme Court judge dismisses Palmer United Party candidate Maria Rigoni's bid to have the Victorian election result declared invalid.

www.abc.net.au

 

[moXJO]

Well I have never been hacked either, and since you haven’t been robbed I guess crime doesn’t exist?

I haven’t had cancer either, so I guess that’s not an issue.

Gee, aren’t small sample sizes great ?

Bet you have had scam phone calls though. Or fraudulent links. There's a bigger exposure to digital theft for everyday Aussies consistently on the daily. Digital theft is leveraged out through technology. Robbery is limited in its exposure.

Robbery is down in statistics(Australia).
Hacked/fraud and identity theft isn't.

Robbery overall down by 71% from 2002-2017.

Meanwhile over the same period
Australia experienced card fraud of $2.1 billion during 2014-15, double the $1 billion in 2010-11, according to new Australian Bureau of Statistics (ABS) figures.

Figures are down now (I think)
But a lot higher than robbery as a %.

 

[moXJO]

This idea that banks just pay for fraud is also wrong. A lot of the time it falls back on the retailer who sold the goods, or through fees.

Anyway I think an over reliance on digital banking is dangerous considering the danger of foreign agents collapsing the banking system in the event of war.

Also of just being an autonomous person. Feels as if society is pushing many into a kind of battery hen existence.

 

[Value Collector]

Bet you have had scam phone calls though. Or fraudulent links. There's a bigger exposure to digital theft for everyday Aussies consistently on the daily. Digital theft is leveraged out through technology. Robbery is limited in its exposure.

Robbery is down in statistics(Australia).
Hacked/fraud and identity theft isn't.

Robbery overall down by 71% from 2002-2017.

Meanwhile over the same period
Australia experienced card fraud of $2.1 billion during 2014-15, double the $1 billion in 2010-11, according to new Australian Bureau of Statistics (ABS) figures.

Figures are down now (I think)
But a lot higher than robbery as a %.


View attachment 157271

Yep I have received dodgy calls and emails, you just hang up or delete.

I have also been approached by many scammers in person, and had several near misses (especially in LA) where I believe I was very close to being robbed.

Criminals will always follow the money, as we go digital more so will crime, but crime has always been there.

I can tell you I much rather receiving a dodgy email than being approached by two guys that have been waiting at my car for me to come out of the bottle shop at night.