COMPETITION AND BANKING SERVICES IN THE UK: SUMMARY OF RESPONSES
To 31st March, the Banking Review Team has received over 115 responses to the consultation document "Competition and Banking Services in the UK". The responses fall into four groups:
- 27 from suppliers (banks, building societies, finance companies and trade organisations)
- 9 from consumer groups and associations
- 10 responses from members of the public
- over 70 allegations/complaints against particular suppliers from members of the public
We have placed all the responses on the Review's website except those requesting confidentiality or those which we judge to contain sensitive personal information.
CONSULTATION DOCUMENT
The consultation document issued on 25th January outlined the proposed approach to the Review and raised specific questions in the following eight areas:
- the definition of markets
- money transmission
- credit cards
- joint supply (bundling of products)
- credit for SMEs
- competitive markets
- other issues
- other potential areas of investigation
Excluding specific issues identified by members of the public, the majority of responses focussed on the above areas. Detailed summaries are set out below.
SUPPLIERS AND TRADE ASSOCIATIONS
Of 27 responses, 6 are confidential. The 21 available on the Review's website are:
Banks Trade Associations
Abbey National British Bankers' Association
Alliance & Leicester Building Societies Association
Bank of Scotland Council of Mortgage Lenders
Barclays
Clydesdale Bank Other
Generale Bank
Halifax Banking Insurance and Finance Union
Lloyds TSB Group British Cheque Cashers Association
HSBC (Midland) Finance and Leasing Association
Natwest Group National Association of Mutual
Northern Rock Guarantee Societies
Royal Bank of Scotland
Sun Bank
Woolwich
General Comments
The suppliers broadly welcome the Review seeing it as an opportunity to receive different perspectives on their services, ultimately feeding into improved customer services and products. Others welcome the opportunity to publicly demonstrate the strengths of the banking industry. Reactions are summarised in the quotes below:
'The BBA welcomes the opportunity to participate in the consultation on the Independent Review of Banking Services....It agrees strongly with the Government's aims in this review, focussing upon the services provided by the banking sector, their relationship to the economic cycle and the likely impact of European developments.'
[British Bankers' Association]
'Natwest welcomes the Review and sees it as an opportunity to advise Government and the wider public about the state of the banking industry and the service we provide to our customers.'
[Natwest]
'I welcome [both] the establishment of the Review of Banking Services in the UK....Sun Bank is committed to meeting customer needs in those markets where we feel we can offer real value. We believe that the UK is one such market - as long as competition in the banking sector continues to be maintained and, where necessary, strengthened.'
[Sun Bank]
'Your Review could not have been launched at a more appropriate time....the retail banking industry in the United Kingdom is undergoing far-reaching change.'
[Alliance & Leicester]
A number of suppliers endorsed the Review's proposed research methods and indicated their willingness to cooperate with the Review:
'At launch, the review announcement sought both initial responses and continuing dialogue as work progresses. We wholeheartedly endorse this approach.'
[Woolwich]
'The CML welcomes the opportunity to participate in the consultation on the Review and is keen to provide assistance to the Banking Review Team in its work.'
[Council of Mortgage Lenders]
Specific Comments
The Definition of Markets
Q1(a) Other studies of the competitive structure of financial services markets have subdivided the market more on institutional grounds, eg by considering mortgage lending and unsecured lending as separate markets. Is the Review correct in placing more emphasis on the demand side?
Suppliers such as the Halifax generally support the emphasis on the demand side:
'We would support the Review's focus on the underlying services being provided rather than on the institutions or the specific products they offer.'
Many said that the market definition needed to take into account the fact that:
'consumers have a much more varied choice of suppliers of retail financial products than they have had in the past, including building societies, banks owned by supermarkets and insurance companies and telephone banks.'
[BBA]
'There has been a dramatic increase of new 'players' in the financial services market place....Their role, which has had a major impact on the market, should not be overlooked.'
[Alliance & Leicester]
Q1(b) The Review suggests a competition analysis based on the three major categories of 'interest', 'credit' and 'money transmission'. Is this the best framework, and is it right to include equity for small businesses as potentially being in the same market as debt?
The suppliers generally support the proposed framework. Barclays in particular raise concerns on whether the framework is too simplistic and will have too many overlapping categories.
A number of suppliers comment that 'interest' would be better labelled 'savings' to avoid confusion. Other terms were also suggested to replace 'interest' including 'investment' and 'deposits'.
On equity, Natwest (similarly Abbey National) comment:
'It is certainly appropriate to include equity capital within the ambit of the Review, although customers may not always consider it as an alternative to debt funding from banks/finance houses given the issues of management control etc.'
Barclays, Royal Bank of Scotland, Alliance & Leicester, Clydesdale and BBA take a different view. Barclays comment:
'We would recommend that equity for SMEs is considered separately from debt....Equity and debt providers each have quite different expectations regarding risks, costs, returns and their balance sheets.'
The BBA regards equity as requiring different skills from traditional debt finance applications.
Money Transmission
Q2 Are there any other particular areas of the UK money transmission system(s) that the Review should investigate?
Suppliers generally agree that no other areas require investigation and say they believe that the Review's coverage is sufficiently comprehensive. The BBA suggest that mention of BACS also includes direct debits and money transmission undertaken by building societies.
HSBC (Midland) say:
'The integrity of the payment systems is fundamental to the effective operation of the banking system....In addition to the money transmission systems managed by APACS, the review may wish to consider: LINK, Swift, Switch, Mastercard/Europay and Visa.'
Abbey National argue that there is overcapacity in some areas of money transmission and this gives rise to strong price competition. They say that outsourced clearing stations which allow new entrants to divest themselves of internal money transmission infrastructure have effectively lowered the barriers to entry. Others argue that many banks and building societies choose to use APACS to provide clearing services under negotiated agency agreements, but they are free to use agency facilities which need not have any relationship with APACS.
Northern Rock are critical of APACS saying:
'APACS is a monopoly.... APACS has no incentive to control its own costs....APACS has no incentive to encourage innovation.'
Royal Bank of Scotland question the Review's approach to the Money Transmission system saying:
'The integrated nature of each of payment systems and credit cards clearly brings benefits to customers. However, the integrated nature means that payment systems are not competitive in the normal way. So it does seem appropriate to test their costs and innovation by comparison with overseas markets.'
Credit Cards
Q3(a) Is it right to assume debit cards are not in the same relevant market as credit cards?
Suppliers believe that the division between credit and debit cards is not a simple one. Credit and debit cards are processed in the same way and have similar rules relating to acceptance, authorisation, settlement and chargeback. That said, customers may regard them differently depending on how they use them (ie using credit cards as 'borrowing' or exploiting the interest free period if they pay the bill due in full).
Abbey National, Lloyds TSB, Alliance & Leicester and Clydesdale Bank argue that debit and credit cards are distinct and should be treated separately. Lloyds TSB say:
'There are clear differences in customer behaviour with regard to the usage of debit and credit cards
And
Debit cards are predominantly used as a substitute for cheques and cash rather than as a source of credit.'
Barclays, Natwest and Woolwich are of the view that debit and credit cards should be treated collectively:
'They could be viewed as transaction mechanisms, meeting a customer need for a convenient method of effecting payments. Whilst the technical and legal frameworks may differ....the essential service of effecting payment, does not. A more fundamental issue here is whether legislative restraints are hindering the development of services.'
[Woolwich]
HSBC (Midland) suggest widening the framework to consider both debit and credit cards as parts of the wider payments (money transmission) market.
Barclays and HSBC (Midland) added that store cards, smart cards and stored value cards should also be included.
Q3(b) Are merchant acquiring and network operation the right aspects of the credit card business to investigate?
Suppliers generally believe that domestic merchant acquiring and network operation are the most appropriate areas to investigate. Natwest comment:
'A number of investigations [have been] carried out, notably by US banks, to establish the profitability potential of acquisition in the UK. None of these foreign investigators have taken their projects any further, indicating that returns would not be sufficient to warrant entry into the market.'
Commenting on competition, Abbey National (not currently a Merchant Acquirer) notes that any change which led to the market becoming more competitive would be positive.
Royal Bank of Scotland suggest that the growth in loyalty/affinity schemes be considered by the Review.
Q3(c) Can the investigation into the operation of the networks be realistically limited to UK aspects of the operation?
A number of suppliers comment that the networks are global with rules, regulations and fallback fees agreed on an international basis. The UK is party to these international agreements and cannot unilaterally change them. Acknowledging these parameters, most suppliers agree that investigation should not be limited to the UK. Natwest comment:
'....a comparison with the acquisition structure, fee basis and profitability on a European/World-wide basis would be welcomed. It is our belief that the UK would stand close scrutiny compared to Europe.'
Q3(d) Are there any particular types of customer whose needs are not being met by merchant acquirers?
Suppliers generally regard the merchant acquirers as providing an effective service in 'a highly competitive and fluid market' [Lloyds TSB]. Some areas of concern are identified and Alliance & Leicester comment:
'Merchant acquiring as a service is expensive for SMEs, mainly because of card scheme fees and terminal/polling costs. Payment for the guaranteed transactions by the merchant to the card issuer via the acquirer is worthy of investigation.'
Royal Bank of Scotland suggest the Review consider the implications of the growing demand for the purchase of goods and services by telephone and the Internet. Abbey National point to the relative backwardness of the UK in this area.
Joint Supply
Q4 Are there other issues surrounding joint supply which the Review should address?
One response expresses concern that mortgage providers are subsidising 'headline rates' by bundling uneconomic accounts with other (high margin) supporting products. They cite compulsory building insurance and tie-ins once the initial headline period ends. They believe that such tactics exploit consumers' lack of understanding and their tendency to focus on short-term headline rates.
Suppliers comment that analysis of the SME market should bear in mind the increasing provision of credit/funding available from non-bank sources (HP, leasing and factoring).
The BBA believes:
'[The Review] will show that bundling, where it occurs, is not anti-competitive and that there are real benefits to customers from the bundling of some basic services. A distinction should be drawn between the bundling of products and the tying of products.'
The Council of Mortgage Lenders comments:
'The CML believes that the provision of bundled products is not in itself anti-competitive and can provide major benefits....in terms of increased certainty and lower search costs.'
A number of suppliers suggest that the real issue is transparency and accuracy in marketing of products.
HSBC (Midland) suggest that, for analysis, joint supply can be broken down into six specific categories - cross-subsidisation, discriminatory pricing, cross-selling, linked selling, incumbency/buyer inertia and client preferences.
Credit for SMEs
Q4(a) Are the USA, France and Germany the right comparison countries? Should the Review look at other countries instead of, or in addition to, these?
Canada and Australia are also recommended. The latter particularly as it has a similar regulatory environment and has seen similar trends towards demutualisation.
BIFU comment on Canada's Competition Bureau, noting that a proposed merger between the Royal Bank of Canada and the Bank of Montreal was rejected as it would restrict competition, raise prices and reduce services in retail branching.
Q4(b) Has the Review correctly identified the key issues in relation to the SME credit problem (eg lack of suitable products, management control)? Are there others?
Q4(c) Are there other major issues in relation to SME credit products that the Review should investigate?
Suppliers do not agree there is an SME problem. The BBA cites research by the Small Business Research Trust whose latest survey indicated that 'access to finance' was rated as top problem by only 3.6% of companies (8th in the overall ranking). Other concerns, such as low turnover, cashflow, late payment and skill shortages took priority. One response notes that the problem:
'is not a shortage of capital, but rather, the availability of businesses with skilled, quality managers in which to invest.'
Suppliers also suggest that the Review consider the unwillingness on the part of many SMEs to accept a reduction in ownership and control in return for equity investment.
Competitive Markets
Q5 Is it right to exclude these markets (insurance and services to large corporate customers) from further investigation?
The majority of suppliers believe that it is best to exclude these markets from further investigation. The Clydesdale Bank recommends that the insurance market should be incorporated 'from a joint supply' basis. The Royal Bank of Scotland recommends that home insurance should be considered on the same basis.
Other Issues
Q6 Is this the right set of wider issues for the Review to consider?
Suppliers broadly agree with the proposed set of wider issues. Lloyds TSB request that an objective assessment of the relationship between macro-economic conditions and the provision of credit to SMEs be undertaken. They comment:
'In the last recession, the real cause of difficulties for SMEs were: The suddenness of the swing from a period of rapid growth into recession [and] the depth and length of the recession.'
This is endorsed by the BBA.
Royal Bank of Scotland (and others) suggest adding the following categories:
'Technology - in particular, the impact of low-cost delivery systems including the telephone and Internet
And
'Regulation - while customer protection is clearly essential, the level of compliance may be a barrier to growth.'
Other Potential Areas
Q7 Should any of these issues (rules on accounting standards, effects of prudential and other regulation and insolvency policy), or others, be investigated independently of the findings from the competition analysis?
Sun Bank raise the issue of Risk Asset Ratios as a regulatory and competition barrier faced by new entrants:
'The typical risk asset ratio for a clearing bank will be 8-9%; building societies....of around 10-11%. At the other extreme, a newly formed insurer bank will typically face a risk asset ratio of around 16%. Differential regulation has an immediate impact on competition....The established banks and building societies effectively enjoy a regulatory subsidy allowing them to return profit on low risk activities and super-normal profits on higher margin activities.'
On prudential regulation, BBA comment:
'An effect of prudential regulation is to require banks to maintain a certain quantity of capital in proportion to loans made. Another is to require them to conduct their business in a prudent manner. These constraints affect banks' approach to granting credit and should be taken into account in analysing the working of competition in the credit market.'
CONSUMER GROUPS AND ASSOCIATIONS
Of 9 responses, 3 are confidential. The 6 available on the Review's website are:
Bradmarsh Templar Ltd
Anglia Business Associates
Consumers' Association
Campaign for Community Banking Services
British Chambers of Commerce
Mid-Yorkshire Chamber of Commerce
General Comments
The Consumer Groups welcomed the broad aims of the Review. Their reactions are summarised in the quotes below:
'....the availability of good value products and services in a transparent, fair and competitive marketplace is vital to the standard of living of citizens as well as to the health of the economy.'
[Consumers' Association]
'The BCC welcomes the Government's Banking Review and the opportunity to provide comment.'
[British Chambers of Commerce]
'We welcome the Treasury's Review of Banking Services. In particular, we welcome the Review's proposed examination of the credit card market.'
[Confidential]
Specific Comments
Those responding limited themselves to their particular areas of expertise and did not necessarily answer all the questions.
Definition of Markets
Q1(a) Other studies of the competitive structure of financial services markets have subdivided the market more on institutional grounds, eg by considering mortgage lending and unsecured lending as separate markets. Is the Review correct in placing more emphasis on the demand side?
Respondents agree that the Review is correct in placing more emphasis on the demand side. Additionally, the BCC comment:
''Small businesses' finance needs, however, are increasingly satisfied by non-bank sources. To make a thorough analysis of small businesses' needs, will therefore mean considering all finance providers, including non-bank sources.'
Q1(b) The Review suggests a competition analysis based on the three major categories of 'interest', 'credit' and 'money transmission'. Is this the best framework, and is it right to include equity for small businesses as potentially being in the same market as debt?
The BCC, Bradmarsh Templar (BT) and Mid-Yorkshire (MYCC) Chamber of Commerce agree with the framework of competition analysis based on the three categories. However, the BCC and BT did not believe that equity should be included. The BCC comment:
'[We] would be concerned if equity for small businesses were included in the same market as debt. These are quite different forms of funding and banks do not normally take an equity stake in SME customers.'
However, the MYCC believe that it is right to include equity as potentially being in the same market as debt.
Money Transmission
Q3 Are there any other particular areas of the UK money transmission system(s) that the Review should investigate?
Two responses focus on this area. The BCC and BT believe that the Review should cover all means of money transmission. This should include 'plastic' transactions:
'[As] the main merchant service companies are all retail bank subsidiaries this has to be an important area of investigation.'
They also comment on the role of APACS:
'The fact that APACS....is able to control access to all UK money transmission networks and will not normally respond to 'outsiders' on matters which affect its members' commercial interests....Systems are inevitably developed in APACS members' interests rather than those of businesses (and other customers).'
They believe that the Review should:
'focus on the impact this lack of competition has on prices.'
The BCC added that the Review should consider whether the current pace of money transmission and clearance is acceptable and whether it can be improved.
Credit Cards
Q3(a) Is it right to assume debit cards are not in the same relevant market as credit cards?
Those responding believe that the distinction between card issue, the supply of networks and merchant acquisition is both correct and 'helpful'. On issuance, they note that the market is largely separate as though almost all debit cards are also credit card issuers, there are several significant credit card issuers who do not issue debit cards.
One response argues that the distinction is less relevant when looking at network supply where the two main networks, Visa and MasterCard, either operate debit cards (in the case of Visa) or are linked to debit card networks (Switch in the case of MasterCard). On merchant acquisition it adds:
'All merchant acquirers offer Visa (credit and debit), MasterCard and Switch....The crucial difference is that debit card charges to merchants are levied on a flat transaction basis while credit card charges are levied on an ad valorem basis.'
Q3(b) Are merchant acquiring and network operation the right aspects of the credit card business to investigate?
Responses agree that there is strong competition in the card issuing market and that network supply and merchant acquiring are the right areas to investigate.
Q3(c) Can the investigation into the operation of the networks be realistically limited to UK aspects of the operation?
More than 90% of credit card transactions by value on UK-issued cards take place in the UK. But where cross-border transactions take place, those responding agree that interchange rates need to be taken into account.
Q3(d) Are there any particular types of customer whose needs are not being met by merchant acquirers?
Three types of customer are identified:
'smaller retail establishments - with low volumes of credit/debit card transactions at low average transaction values - usually pay the highest rates of processing charges'
'newly established merchants (eg Internet merchants) can find it difficult to accept credit cards because they lack a sufficient trading history'
'those operating on a 'card not present basis' face greater risk from fraud and are affected by 'charge back' on queried/fraudulent transactions.'
Joint Supply
Q4 Are there other issues surrounding joint supply which the Review should address?
Joint supply/bundling is regarded as an important issue. One response comments:
'knowledgeable customers may take a Bank's additional services in exchange for 'discounts' on the underlying service; certainly a skilled banker can manipulate his/her customers into accepting a 'standard' product offering, which invariably will not match the exact requirements or be cost effective.'
Credit for SMEs
Q4(a) Are the USA, France and Germany the right comparison countries? Should the Review look at other countries instead of, or in addition to, these?
As well as comparisons with France and Germany, it is suggested that the Review look also at Canada, Australia and New Zealand and other comparably sized countries to the UK. The BCC comments on America:
'Banks and banking systems in the USA operate on a state rather than national basis....while a comparison with the USA may have merit, it should be pointed out that this is not like with like.'
Q4(b) Has the Review correctly identified the key issues in relation to the SME credit problem (eg lack of suitable products, management control)? Are there others?
Q4(c) Are there other major issues in relation to SME credit products that the Review should investigate?
The BCC comment:
'According to the BCC's recent small firms survey on finance....in general SMEs are predominantly satisfied with their finance arrangements.'
They note:
'One concern we have is that SMEs often do not use the most appropriate package of finance for their needs. Whether this reflects a supply side failing or lack of understanding on the part of SMEs is something the Review could usefully investigate.'
The MYCC comment:
'The problem is however, that for practical purposes, the only source of mainstream finance for SMEs are the few high street plc banks, which are not greatly interested in this sector to the extent of going out of their way to compete among themselves.'
Competitive Markets
Q5 Is it right to exclude these markets from further investigation?
The MYC. and BT argue that the relationship between the banks and insurance (especially in the context of loan collateral (eg assignment of policies)) should be scrutinised.
Other Issues
Q6 Is this the right set of wider issues for the Review to consider?
Those responding agree with the other issues identified. The Consumers' Association note:
'The Government's recent announcement regarding the adoption of a national changeover plan for the Euro has highlighted the importance of considering the UK banking sector in a wider EU perspective. Euro dominated products will become increasing present in our market and competition from cross-border suppliers will change the way in which consumers buy banking products and services.'
Additionally, the BCC suggest that the impact of technology changes eg electronic banking be assessed. The Campaign for Community Banking Services comment on the need to address rural and local branch closures. This is in the context of both the economic viability of communities and the long term economic and corporate objectives of the banking sector.
Other Potential Areas
Q7 Should any of these issues (rules on accounting standards, effects of prudential and other regulation and insolvency policy), or others, be investigated independently of the findings from the competition analysis?
The BCC, MYC. and BT agree that the issue of insolvency is extremely important. Mandatory third party review, prior to a bank being permitted to liquidate, is recommended. They refer to similar 'Chapter 11' arrangements in place in the USA.
MEMBERS OF THE PUBLIC: CONDOC RESPONSES
Of 10 responses, 6 are confidential. The 4 available on the Review's website are:
Bill Leach
Sam Crabb
Anthony Sperryn
Maurice Healy (ex Director of the National Consumer Council)
General Comments
Responses were specifically directed to the eight subject areas. There are no general comments to report.
Specific Comments
The Definition of Markets
Those responding mostly agree that the Review is correct to focus on the demand side. Mr Crabb believes that the lending market should be considered as a whole:
'Both mortgage lending and unsecured lending need to be reviewed together to ensure that risk is reduced as far as possible, which drives down the interest cost to the consumer.'
Mr Healy agrees that the competition analysis should be based on the three categories of interest, credit and money transmission. He says:
'....[they are] a sound basis for analysis. This is the same framework as the NCC's report [Banking Services and the Consumer 1983]'
Mr Leach suggests that personal and business banking services are completely independent when assessing individual services, margins and risk. He recommends a two tier analysis:
'Primary framework - analysis of private individual and/or family account holders independent to business accounts
And
'Services category - interest, credit, money, travel.'
On equity, Mr Leach believes that equity is outside the scope of the Review while Mr Crabb observes:
'Equity for SME's is linked to credit and interest, but there should be a very close investigation of the European method of Mutual Guarantees.'
Money Transmission
A number of those responding refer to the time taken to clear cheques and their concerns about competition in the clearance system. Mr Healy comments:
'I agree that the essential competition issue is the ease of access to the clearance system. It is clearly important to collect information about conditions of entry to clearing systems in other jurisdictions.'
Mr Leach suggests that the growing use of CASHBACK facilities and the growth in Internet product settlements should be investigated.
Credit Cards
Respondents generally believe that there is at least an overlap between debit cards and credit cards and the behavioural element dictates the extent of this overlap. Mr Crabb suggests there are two distinct credit card markets which affect different sectors:
'Those that are solely used as a means of payments [and are paid in full each month] with no interest fee to the account holder but a significant % fee to the retailer
And
Those that are used as a means to draw credit. Normally there is no justification for the high level of interest charges, other than the risk factor.'
They also broadly agree that merchant acquiring and network operation are the right aspects of the credit card business to investigate. One response says:
'Banks will probably tell you their margins on merchant acquiring are wafer thin. But the profitability of their credit card businesses can be seen from the number of new entrants offering better terms, including cashbacks and discounts.'
Respondents identify two types of customer whose needs they feel are not being met by merchant acquirers:
'Merchant acquiring is insularly sterling based. I know of businesses large and small which want to process sterling and euro denominated transactions through one merchant services provider.... but amazingly I can't find a provider to do that.'
'Merchant acquirers have been very slow to allow UK businesses to accept card payments over the Internet....It has given rise to specialist intermediaries, increasing the costs for businesses.'
Joint Supply
A number of respondents express concern about bundling and the associated pressure on SME's to accept bundled products. One comments:
-....it is commonly the case that an SME business wishing to take advantage of a product may be disadvantaged if the provider they choose is not one owned or controlled by their current bank.'
Another notes:
'SME's borrowing from a bank are often scared to negotiate transmission pricing for fear that the bank may pull the plug or become less co-operative about their borrowing needs.'
Credit for SMEs
There is criticism of the banks lack of understanding, training and poor response times and in making credit available during difficult periods and 'credit crunches'. Mr Crabb suggests that European banks play a more pro-active role in equity partnership schemes than their UK counterparts.
Competitive Markets
Mr Sperryn suggests that price competition in insurance is obscured by variations in cover. Mr Leach expresses concern about the power of the blue-chip insurance companies as and when they increase their share of the banking market.
Other Issues
Respondents broadly agree with the proposed issues. Additional issues raised include the growth of Internet banking and purchasing and the growing impact of the supermarket banks.
Other Potential Areas
Concerns are expressed about the funding arrangements, powers and role of the Banking Ombudsman.
MEMBERS OF THE PUBLIC: SPECIFIC COMPLAINTS
These responses contain sensitive personal data and will not be available on the website. The 70+ complaints/allegations from members of the public fall into five specific categories:
- bad financial advice (eg. investment and mortgage products)
- excessive bank charges (eg. overdrafts, penalties, lending rates)
- irresponsible lending (eg. overextending credit and withdrawing it without notice)
- transaction times for processing financial data to bank accounts
And
- the limited role and powers of the Banking Ombudsman to deal with consumer complaints
A constant criticism from those responding is that the institutions are neither sympathetic to their concerns nor prepared to act flexibly in the face of changing personal and/or business circumstances.