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BANKING

How a pensioner made Spanish banks rethink their customer service

It was his bank's limited counter service and indifference to his struggles with ATMs and apps that forced a Spanish pensioner to act, highlighting the problems the digital revolution is causing many elderly people. Meet Carlos San Juan, a hero for his and all other generations.

How a pensioner made Spanish banks rethink their customer service
Spanish retired doctor Carlos San Juan, who raised over 640 000 signatures for his petition "soy mayor no idiota" (I'm a senior citizen, not an idiot), poses during an AFP interview, following the presentation and signing of a new agreement by banking associations against the financial exclusion of the elderly, in Madrid on February 21, 2022. (Photo by Javier SORIANO / AFP)

For Carlos San Juan, from the eastern port city of Valencia, the tipping point was an incident with an ATM in which the bank staff “flatly refused to come out and help” and would not let him in because he did not have an appointment.

A retired urologist from Valencia, he went home and wrote a manifesto called “I’m old, not stupid,” which was initially signed in December by around 100 friends and acquaintances.

READ MORE: I’m old, not stupid’ – How one Spanish senior is demanding face-to-face bank service

It struck a chord, quickly finding its way onto the Change.org online platform, where it picked up nearly 650,000 signatures of support and was put before the authorities.

Such was the pressure that Spain’s three main banking associations last week signed a protocol in the presence of economy minister Nadia Calvino pledging to improve customer service for older people.

Bank branches “will expand their counter service opening hours”, “older people will be prioritised” and “ATMs, banking apps and web pages will be adapted with a simplified interface and language,” said the Spanish Banking Association (AEB), one of the signatories.

‘Be patient with us’

San Juan hopes the measure will end “the plight of those who still have banking books, and that of older people with mobility issues having to queue in wheelchairs, with walkers or sticks, who have to “keep coming back” to see a bank employee face-to-face.

“I have Parkinson’s disease,” says this friendly, eloquent 78-year-old who normally goes to the bank when there are fewer people because he needs more time.

People of his age need to be shown patience, he says. “We might learn something today and then forget it two days later.”

Older people are “absolutely not against digitalisation… That’s here to stay”, all they want is “a more humane transition” into the future.

AEB president Jose María Roldan agrees.

“San Juan has made us all realise we need to look after those who can’t go as fast and those who will always need help because of their personal circumstances,” he said during the signing ceremony.

Since the financial crisis of 2008, the Spanish banking sector has halved its number of branches to around 20,000, shedding nearly 40 percent of its employees — who today number 172,000, European Central Bank figures show.

That is an average of eight employees per branch, compared with an average of 12.5 in neighbouring France, which has 402,000 employees and 32,000 branches.

A man withdraws money at a cashpoint (ATM) set up in a library bus (Bibliobus) in the village of Anover de Tormes, in the northern Spanish province of Salamanca on February 15, 2022. (Photo by CESAR MANSO / AFP)

‘State of distrust’

Some are already trying imaginative solutions to address the problems.

In Anover de Tormes, a tiny village of around 100 residents some 30 kilometres (18 miles) from the north-western town of Salamanca, a library bus pulls out of the mist and parks up.

In November, the “Bibliobus” was fitted with an ATM which David Mingo, head of culture for Salamanca province, describes as “an important first step towards resolving a big problem”.

After serving six people, the bus moves on to Santiz, which has 300 residents, three bars and a school.

In front of the “Bibliobus,” Agustina Juan, 79, admits with frustration that she does not know how to withdraw money with a card. In fact, in the three villages visited by AFP, only one person used the ATM to withdraw money.

“I have no idea how to use it. You know why I have it? So I can pay by card when I go to the supermarket,” she shrugs.

The bigger problem is trying to resolve an erroneous banking charge or any other problem.

“I have to travel 40 kilometres (to the branch) to see what’s happened. Or if you phone up, it’s awful: the line’s always busy and you have to keep calling,” she says.

At her side, 76-year-old Raquel Vicente says the elderly have lost track of their finances.

“The only thing you can do in your old age is count your money, but with the system like this, you just can’t see it, so you live in this constant state of distrust,” she sighs.

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PROPERTY

What the Euribor rise means for property buyers and owners in Spain

The rise in the Euribor interest rate, used to calculate mortgage payments in Spain, is causing big changes in the mortgage rates.

What the Euribor rise means for property buyers and owners in Spain

Looking to buy property in Spain? Already a homeowner here? Well, you may have heard something about rising interest rates recently.

Or perhaps changes to the terms of your mortgage. Or the Euribor – but what is it, and what’s going on?

What is Euribor?

In Spain, Euribor is the interest rate most often used to work out mortgage payments and to calculate both variable and fixed rates.

It is anchored to the interest rate set by the European Central Bank, and, as we are now seeing, quite responsive to global economic events.

It’s the interest rate that banks in the Euro Zone use to lend to each other, so when the base rate goes up, the Euribor does too, which sends mortgage interest rates across the Eurozone rising. 

Rising rates

Most Spanish mortgages with variable rates normally vary based on a variety of factors, but this number has been rising and in May 2022 saw figures of 0.240 percent (Tuesday May 17th), well above the average. 

The rises throughout May are leading many in Spain, and indeed across Europe, to wonder how high their mortgage rates can go, and when the rises will stop.

Banco de España has estimated that the increases could range from anything between €35 a month to an additional €400. Bankinter predicts the Euribor rate will finish the year at a staggering 0.40 percent, but, more encouragingly, Caixabank’s prediction puts it at just 0.13 percent by the end of 2022.

On Euribor.com.es, a website that tracks the index on a daily basis, they suggest that the market consensus predicts the Euribor will finish at around 0.3 percent at the end of the year, but could reach as high 0.8 percent in 2023.

All of them agree, and most other economic indicators suggest, that whatever the figure at the end of the year, it will remain positive, so it seems almost certain that mortgages will continue to rise throughout 2022 at the very least.

This instability, in addition to global inflation and supply chain problems, could mean that mortgage rates will be affected at least until 2023, with some predictors even signposting 2024 as the possible end of a rise in mortgage prices.

With things uncertain in the mortgage industry, and the world economy more broadly, perhaps you’re thinking of ways to try and insulate yourself from the climbing interest rates.

How to protect yourself from the rising rates

One way to weather the storm of interest rate increases is to change your mortgage from a variable to a fixed rate, either by negotiating with the your bank or by changing bank altogether – a process known as subrogation.

According to data from MyInvestor, during March and April the number of subrogations has started to rise.

Subrogation basically means switching the mortgage from one bank to another to change its interest rate. Although it does involve certain charges in order to do so – you pay the valuation of your house, which normally costs a few hundred euros, and a fee charged to the bank you are leaving, which can cost up to 2 percent of the outstanding amount – it could, and probably would, work out cheaper than paying the hiked interests rates over time.

You could also try and take out a new mortgage with another bank and use the borrowed money to settle the loan. This is, of course, a more expensive option as you have to pay the appraisal, the commission for early repayment of the current credit (again, up to 2 percent of the outstanding amount) and the expenses associated with its cancellation of registration, which normally runs to around €1,000.

READ ALSO: Spanish mortgages – Ten things foreigners should know before getting one

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