Skillful Bankers

I was in a queue in the Halifax this morning and I overheard a conversation in which a couple of customers were told that their transaction would take three working days. They shouldn't count today at all (that would be unthinkable was the non-verbal communication) and don't count weekends. I think they were suitably admonished for not knowing a simple axiom of banking. It should have been self-evident that banks will take your money, do nothing with it till next week and then spring into action and move it to where you want it.

The reason that I was in the Halifax was because I paid some of my mortgage off on the 7th February. I received a letter last week which told me that I had left no instructions as to which part of my mortgage I wanted it to be paid, so they had applied the payment equally to each part. I didn't know that my mortgage was in parts so I went to my local Halifax this morning and they guessed it was something to do with my previous mortgage. I still have no idea if I would have been better off applying this payment to a specific part or parts of my mortgage.

I also asked when this payment would show up as a reduction in my monthly payment. They couldn't answer this but gave me a phone number and directed me to a phone within the branch. I had waited five minutes for my first question to a real person and the message on the phone was that I would wait another five minutes - still, this is what I had to do if I wanted an answer. The answer was that they hadn't had time to apply the reduction to March's bill so I could expect the reduction in April.

How difficult is it to recalculate a mortgage? I am nearly two years into a ten year mortgage. If I had taken a smaller mortgage by the amount that I paid back a few weeks ago then I can work this out in my head. It is probably the case that Halifax mortgages are much more complex but I would still expect a computer to be able to work out this amount in a push of a button and not take two months.

In the Stock Exchange, High Frequency Trading probably accounts for something like 50% of all traded volume. "At the turn of the 21st century, HFT trades had an execution time of several seconds, whereas by 2010 this had decreased to milli- and even microseconds". I'm not saying that such speeds are necessary, but surely the fact that they are possible means there's no technical reason why any transaction anywhere should ever take more than a few seconds.

I think the lesson from this morning is that bankers deserve their bonus because they can make their customers feel foolish, take their money off them and then do nothing with it for a few days or weeks - and they get away with it. That takes real skill.

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