Banking services extract value from your need to exist in society

Banks have successfully transformed a basic social necessity into a profit extraction mechanism. They don’t provide services—they charge rent for your participation in civilization.

The participation tax

Every adult requires a bank account to function in modern society. Employers won’t pay cash. Landlords won’t accept physical money. Government services demand electronic transfers. This isn’t convenience; it’s mandatory infrastructure.

Banks positioned themselves as gatekeepers to this infrastructure, then began charging fees for access.

This is structurally identical to a private company controlling all roads and charging tolls for every journey. The difference is that banking’s monopoly operates with social legitimacy.

Manufactured scarcity

Banking services have near-zero marginal costs. Moving numbers between digital accounts costs fractions of pennies. Yet banks maintain fee structures as if they’re shipping physical gold across continents.

Account maintenance fees exist because customers can’t easily leave. Overdraft charges persist because they target financially vulnerable people who have no alternatives. International transfer fees remain high because coordination between banks is artificially restricted.

None of these costs reflect actual operational expenses. They exist because the banking system can extract them.

Interest rate arbitrage as value capture

Banks borrow money at central bank rates near zero, then lend it back to consumers at rates between 3-30%. This spread doesn’t represent risk assessment or operational costs—it represents captured value from monetary system design.

Citizens cannot access central banking directly. They must go through private intermediaries who extract value from this forced relationship.

The gap between what banks pay for money and what they charge for it is pure extraction from people who have no choice but to participate.

Credit scores as behavioral control

Credit scoring systems create artificial scarcity around access to capital. Banks don’t just evaluate risk—they actively shape behavior by defining what actions increase or decrease your “worthiness.”

Pay bills early? No benefit. Pay exactly on time? Maximum score. Miss one payment? Months of penalty.

This isn’t risk management. It’s training people to optimize their lives around banking system preferences.

Your credit score becomes a social credit score, determining access to housing, employment, and basic services. Banks created a parallel social hierarchy based on compliance with their behavioral preferences.

Digital payment surveillance

Every electronic transaction creates data that banks monetize through multiple channels. They sell purchasing patterns to marketers, use transaction timing to predict life events, and offer “insights” to retailers about customer behavior.

You pay fees to use their payment systems, then they profit again by selling data about how you used them.

The infrastructure you’re forced to use becomes a surveillance apparatus that generates additional revenue streams from your required participation.

Algorithmic redlining

Banks use “risk assessment” algorithms that systematically exclude people based on zip codes, employment types, and social connections. This isn’t neutral evaluation—it’s automated discrimination that reinforces existing social hierarchies.

Someone born in the wrong neighborhood gets permanently categorized as higher risk, regardless of individual behavior. The algorithm becomes a self-fulfilling prophecy that maintains class boundaries.

Banks profit from both inclusion and exclusion. They charge higher rates to “risky” customers while using their exclusion to justify premium pricing for “safe” customers.

The compound extraction

Banking fees compound across entire lifetimes. A person paying $15 monthly account fees, $200 yearly overdraft charges, and 5% interest rate premiums over prime rates loses approximately $50,000-100,000 in lifetime value extraction.

This wealth transfer goes from people who need basic social infrastructure to shareholders of companies that control access to that infrastructure.

The system extracts value not from productive activity but from the requirement to exist within social systems.

Alternative infrastructure suppression

Banks actively lobby against alternative monetary systems, community banking, postal banking, and public digital currencies. They’ve successfully prevented societies from developing non-extractive alternatives to basic financial infrastructure.

Bitcoin and cryptocurrency emerged partly as responses to banking extraction, but banks are now absorbing these systems into traditional fee structures.

Every time alternative infrastructure emerges, banking systems work to either eliminate it or capture its value flows.

The legitimacy illusion

Banking presents itself as providing valuable services rather than extracting rent from required participation. They’ve successfully framed their extraction as “earning” rather than taking.

Credit cards offer “rewards” that are funded by merchant fees that increase prices for everyone. Banks “help” you buy homes by extending loan periods that increase total payments by 100-300%. They “protect” your money by restricting your access to it.

Each apparent benefit masks a larger extraction mechanism that takes more value than it provides.

Systemic dependence design

The banking system is designed to create maximum dependence while appearing to offer choice. Different banks provide nearly identical fee structures because they operate within the same extraction framework.

“Competition” exists around marketing and minor feature differences, not around fundamental value propositions. No major bank offers genuinely non-extractive services because extraction is the business model.

Switching costs are kept high through credit history requirements, direct deposit complications, and automatic payment systems that create friction around changing institutions.

The real service

Banks don’t provide financial services. They provide access to social infrastructure in exchange for lifetime value extraction.

Their actual product is resolving the coordination problem created by their own existence. They solve problems they created by controlling essential infrastructure.

This is value extraction disguised as value creation—a rent-seeking operation that taxes human participation in society itself.

The banking system represents perhaps the most successful transformation of social necessity into private profit in human history. Understanding this extraction is essential for evaluating any claims about financial innovation or reform.