My Peep At Life…

August 30, 2007

Facebook group helps bank change their mind

Filed under: Finance — peepingtom @ 2:39 PM

A student campaign using the ever-popular Facebook social networking website has caused HSBC to overturn their decision to scrap interest free overdrafts for university graduates this summer. The HSBC bank said that it wasn’t too big to listen to its customers.

HSBC were looking to have a 9.9% APR interest rate for students on their overdrafts, compared to the existing 0%. However, the pressure from the group and NUS has led them to abandon their decision. Considering the bank advertises itself as the people’s bank, its made a sensible move by listening to the student protest.

If the HSBC bank did not listen to the students, what would they have lost or gained? The students would have boycott the bank, meaning they would have lost revenue from interest payments over the interest-free overdraft, they might also avoid taking out loans, credit cards, mortgages and savings accounts as a result. For any credit-product, HSBC would have lost a fortune in interest charged, not to mention the loss of funds from savings accounts.

Since graduates are probably the most employable group of individuals as a whole, and they are likely to earn a good wage, the bank could have lost a lot of business over the years if the students settled in with a new bank.

Anyway, a smart move by HSBC to actually listen and act do what the customer wants.

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