Subscribe to Your Own Money: Banking's Netflix Moment

Someone on r/AusFinance posted a leaked bit of market research from a bank testing the waters on subscription tiers for personal banking. Not a fee here or there, an actual Netflix-style ladder: basic, plus, premium, max. Pay more, get more of your own money’s basic functions unlocked. The post ended with a line I want stitched onto a cushion: “I DON’T WANT TO FUCKING SUBSCRIBE TO A BANK.” Four hundred comments later, turns out most of the country agrees with him.

The example someone pulled up was ING in the Netherlands, which already runs this model. Four tiers, from €4 a month up to €45. The top tier gets you Amazon Prime, Disney+, travel insurance that covers “winter sports,” and a discount on investment fees for your kids. The bottom tier gets you, as far as I can tell, the privilege of not being charged the €7 tier. Someone in the thread did the maths and pointed out the obvious bit: the bank already makes money off your deposits. It lends out what you put in, charges the borrower interest, and pockets the spread. That’s the whole business model. Asking you to pay monthly on top of that isn’t a service fee, it’s a toll on a road you already own.

I’ve been in IT long enough to recognise the pattern because I’ve built versions of it myself, just for less morally fraught products. You take something that used to be one flat thing and you carve it into tiers, not because the underlying cost changed, but because tiering lets you extract more from the people willing to pay more, while still technically offering something to the people who aren’t. It works brilliantly for streaming services, because nobody dies if you can’t watch a documentary about ancient Rome. It works less brilliantly when the “basic tier” is fraud protection, PayID, or being able to close your own account without ringing a call centre that puts you on hold for forty minutes.

That last one isn’t hypothetical, by the way. Another thread this week was from someone who tried to delete their ING account after the subscription push and got told the bank simply won’t let them. They can close the cards, not the account. I’ve spent a career telling people “we can’t delete that, it’s tied to seven years of compliance retention,” so I get the technical answer. It’s still a bad look when it lands next to a subscription pitch. Feels less like prudent record-keeping and more like a Hotel California situation with a monthly cover charge.

What struck me reading through the comments was how quickly people cited Up Bank as the cautionary tale. Up tried a paid tier called Up High a year or two back, bundled some genuinely nice features into it, and got smashed by user backlash hard enough that they scrapped it and released most of the features for free anyway. That’s actually a decent outcome, and it’s the kind of thing that only happens because customers in this country still have somewhere else to go. Macquarie, ubank, a dozen neobanks all fighting for the same digitally literate, rate-shopping crowd. The moment switching gets easier than staying annoyed, banks feel it in the account numbers. It’s one of the few areas of financial life in Australia where competition still does something resembling its job, unlike, say, supermarkets or health insurance, where switching gets you a different logo and the same problem.

I moved between banks a few times in my twenties, back when it meant physically walking into a branch with photo ID and waiting three weeks for a new card. These days I can open an account on my phone before the kettle’s boiled. That ease cuts both ways: it makes it laughably simple for a bank to squeeze people who won’t notice or won’t bother switching, and it makes it laughably simple for the rest of us to leave the second they try. My money’s on the second effect winning here, mostly because the group most engaged with their finances, the ones reading finance subreddits and comparing interest rates on a Tuesday night, are exactly the customers a bank can least afford to annoy.

None of which fixes the deeper thing that’s actually bugging people, which the thread only touched on sideways: household insurance up 25 percent, car insurance up 20 percent, rent up a quarter in one email. A subscription banking model lands differently in a year when everything else has already quietly subscribed itself to your income without asking. It’s not really about the ten dollars a month. It’s about being asked, again, to pay more for something that used to just be included, at a moment when there’s very little slack left to absorb it.

I don’t think Australian banks will get away with the full European tier ladder, not yet anyway. The backlash to Up High suggests there’s a line, and crossing it costs more in reputation than the subscription revenue is worth. But I’d bet money, un-subscribed money, that we’ll see more of these trial balloons over the next few years. Worth reading the fine print when they land, and worth remembering that “no” is still, for now, a perfectly viable answer.