Analysts and consumer rights groups have criticised Belgium's new banking regulations for being insufficiently stringent, arguing that the failure to abolish fidelity premium rates represents a "missed opportunity" to overhaul the country's financial sector.
A recent Memorandum of Understanding signed by State Secretary for Consumer Protection Alexia Bertrand and Febelfin, the Belgian financial services federation, mandates numerous reforms to Belgium's financial services industry.
These include a reduction of the maximum number of regulated savings accounts offered by banks from six to four; a tripartite 'A-C' categorisation of savings accounts to facilitate consumer comparisons and choice; and mandatory quarterly updates provided by banks to customers about changes to savings accounts.
Belgium's State Secretary for Consumer Protection Alexia Bertrand. Credit: Belga / Nicolas Maeterlinck
Consumer rights group Test Achats, however, says that many of these changes are largely cosmetic. The organisation pointed out that ING Belgium is the only one of Belgium's four largest banks which will be affected by the aforementioned new savings account limit. (BNP Paribas Fortis, KBC, and Belfius already offer customers four or fewer different savings accounts.)
Test Achats also criticised the fact that, when marketing their savings accounts to customers, banks will still be permitted to add together the base and fidelity premium rates – something which the group has long argued is a highly misleading practice.
"Almost nothing has changed compared to the current situation," Test Achats spokesperson Julie Frère told Le Soir.
"By authorising this addition of rates, we are stepping back and moving a little further away from the 'truth rate', that is to say, the rate that savers actually receive when they cannot benefit in whole or in part from the fidelity premium," she added.
'A simple, common-sense measure'
Writing in L'Echo, economic analyst Gilles Quoistiaux similarly condemned the new rules as "insufficient" and pointed out that Belgium's own Competition Authority recently called for fidelity premiums to be scrapped.
"The loyalty bonus offers a bonus to savers who agree not to touch their deposit for a certain period of time," Quoistiaux wrote. "This is an attractive mechanism, but it blurs comparisons, simply because this bonus only starts to take effect after a period of one year. Before that, the consumer does not benefit from it at all – and they don't always know it."
Quoistiaux also noted that abolishing fidelity premiums is "a simple, common-sense measure that would put all savings accounts on an equal footing" and that the Memorandum's failure to do so represents "a missed opportunity".
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Bertrand, however, vehemently defended the decision not to do away with fidelity premiums.
"We would like to leave the choice to the consumer to opt for an account with or without a fidelity premium," she said. "Some consumers feel that they will not need their savings for a while and will therefore be able to benefit from a fidelity premium."
Bertrand added that fidelity premiums "offer stability to the banking sector" insofar as they "allow banks to keep savers' deposits over the long term."
