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Postal banking around the globe

Consumers in many countries already perform banking
activities through local postal offices. In Spain, Slovenia
and the Czech Republic, local post offices execute
customer transactions on behalf of multiple private-sector
banks using terminals tied to those banks’ systems. The
German postal service operated a bank, called Postbank,
for nearly a century, before it was privatized in the early
1990s, with Deutsche Bank taking a majority interest in
the entity. Still, Postbank continues to offer select services
through Germany’s post office branches.

In Italy, the post office has offered savings accounts for
more than a century and partners with private banks to
make mortgage and personal loans. Post offices in China,
France and Japan hold banking licenses and compete
against private sector banks for all types of banking
services.

In the UK, National Girobank was a public sector bank run
by the General Post Office between 1968 and 1990, when
it was taken over by a private sector banking concern.
National Girobank was the first bank designed around
computerized operations, and the first in Europe to offer
telephone banking.

Which brings me to what I see as the biggest obstacle to
postal banking in the United States: technology. Banks
and credit unions spend billions of dollars annually on
technology. A recent survey by Bank Director magazine
found the median bank budget for technology was $1.7
million this year, and megabanks like JPMorgan Chase
and Bank of America spend about $10 billion a year, each,
on technology.

Key to technology budgeting is the need to secure customer
information. “In an era of systems hacking, securing
financial data against ever evolving threats has become
that much more challenging,” the ICBA wrote in its letter
to Congress. “A postal bank would have to build data
security systems from scratch.” Breaches would expose
customers to potential identity theft and other fraud, and
the USPS to significant financial losses, the ICBA noted.

In its letter, the ICBA also suggested partnerships between
financial technology firms and community banks will
help ensure unbanked and underbanked Americans
gain broader access to financial services beyond physical
branch networks. Sounds good. But what about one or
more fintech firms partnering with USPS to offer financial
services that can be accessed electronically, or by visiting
a local post office? It seems worthy of consideration.

Patti Murphy is senior editor at The Green Sheet and self-described
payments maven of the fourth estate. Follow her on Twitter @GS_
PayMaven.

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