Banks CAN be better – now’s the time for transformation

I’m perfectly happy with my bank – whether through counter service, cashpoint or online banking. So I think this intro is a bit too sweeping.
As far as helping people “who regularly slip into unauthorised overdrafts” goes I have a view on this, as you might expect. Once or twice might be accidental, but “regularly” is deliberate. If you are credit worthy then set up an overdraft facility with your bank. If they refuse they’ll have good reason – maybe because they deem you a bad risk. Taking money that is not authorised is dishonest – it is not yours. I’d much rather Which? campaigned for people to treat their financial dealings responsibly than to encourage this underhand behaviour. But don’t berate the banks.

I have to agree with Malcolm and Alfa. I have no quibbles with my bank but then I am in the 30% who do not bank with one of the big four high street banks. I have been with Nationwide for over thirty years and it provides a satisfactory service via every channel. However, from talking to others, I do not get the impression that the major high street banks, and the other building societies that provide current accounts, are significantly different. No one we know has a problem with their bank that is not mostly of their own making.

I do not believe customer service is routinely poor enough to “name and shame” any of the major banks. And which banks are so uniformly bad that they qualify for nomination as the “worst providers”? Whenever I have used a different bank I have found the service perfectly acceptable. What is this “terrible customer service” Richard Piggin refers to? Is it worse than the service provided by other major organisations like transport operators, airlines, local authorities, insurance companies?

Once in a while there is an IT failure that causes temporary inconvenience but it seems to happen to every big organisation eventually. With banks, at least they make good any losses due to the malfunction. If the banks were not offering so many useful services I suppose there would be fewer complaints and they would get better marks from the CMA.

It’s so easy to take a pop at the banks but their high street retail operations are generally run well and there’s not much to choose between them. The staff are generally polite and pleasant and are well-trained. Their premises are clean, smart and respectable. Money is available round the clock via ATM’s. Credits and debits end up in the right place with a reliability that would astonish any other industry.

As for “proactively helping customers who regularly slip into their unauthorised overdraft, rather than just hit them with high charges”, what should they do? Close their accounts? The best way to help people who break the rules is to make them pay for it, otherwise it impacts on other customers. Charge less for overdrafts? The chances are that overdrawing as a regular practice would increase rather than decrease. Banks make equitable facilities available for authorised overdrafts and also for personal loans. The terms are probably fairly standard across the personal banking sector and there are leaflets in every branch to help people manage their account. Yes, believe it or not, it is the customer’s responsibility to manage their account – not their bank’s. When opening a bank account every customer is under an obligation to act responsibly, ensure that they live within their means, and use the bank’s services in accordance with the terms and conditions. It looks to me as though the CMA has had to scrape around to find a couple of irritations whereas in reality there are probably not that many things that could be improved to make our “everyday banking experiences better” that would not be adverse to customers interests and lead to even higher charges and the end of free current accounts.

As regards Santander and the alteration to the terms of their 1:2:3 account, at least they have given plenty of advance warning of the change. It’s a commercial decision which presumably they have had to take as the popularity of the account made it unviable under it’s present structure. There was always that risk with packaged accounts, that one day the deal would have to rebalanced back in the provider’s favour. But no one need suffer any loss – free banking accounts are still available and switching is free as well. The 1:2:3 account will be fairly unattractive after 10 January and it will be interesting to see how many customers stay with it while in negative territory. I suppose Santander will be expected to take every one of those customers aside and either help them to make the account work better for them or to move to a different product.

Apart from the foregoing, I was also slightly irked by the sweeping generalisation that everybody went to university and opened a bank account. It’s a regular beef of mine that Which? people seem to think the whole country behaves like them. Half the population never went near a university [unless they were laying the bricks] and yet have had to pay,through their taxes, for university education for the other 50% and I have to wonder whether they are getting the right returns on their investment – which might be the bigger scandal than how the banks are treating people who, without asking, take more money out than they have got.

If I could be permitted to broaden the debate somewhat, this lead article is another example of how Which? is moving towards campaigning to the detriment of what used to be its core business – testing.

Which? no longer does any of its own testing, instead preferring to outsource the business to ‘independent’ labs. Personally I was much happier when Which? themselves did their own testing, because then I knew what I was paying for, but now Which? won’t even tell us which labs do the testing. Some members are starting to complain (rightly so, in my experience) that Which?’s ratings are becoming unreliable, no account is being taken of long-term reliability and frequently the quality of ‘Best Buys’ is far from what we used to be able to expect from a Which? Best Buy. Additionally, whereas Which? used to run their scheme for recommending traders completely free now Traders have to pay a substantial premium to display the Which? Recommended badge, and that despite mounds of academically-generated evidence that making recommendations which are fiscally-dependent not only leads to a dilution of the award’s perceived merit, but can also create an unhealthy association between the awarder and awardee.

The article talks about how things should change to make the banks better but I would question if it ought not to be Which? – currently dealing with a £10m loss after writing off the Indian venture, not doing its own testing, charging those to whom it awards a Which? recommended provider, paying £1m bonuses to some of its executives, refusing to name the ‘independent labs’ who now do all its testing, failing to deal with long-term reliability of products and recommending products as Best Buys which users consistently find undeserving of that accolade – that should be the organisation in need of improvement. I know I, for one, would feel a much greater degree of confidence in Which? if it were to devote more of its energies to product testing and less to campaigns.

I agree with malcolm r. I read the article in the Telegraph and thought Which?’s approach is wrong-headed, even though it might strike a chord with today’s busy-schedulers with no attention span. In these days of instant on-demand access to anything and everything via their precious SmartPhone, it’s bonkers to figure that a primary solution is for the bank to tell their customers when they are mismanaging their money. Far better to educate the customer to take some responsibility for their own affairs – these days it’s easy enough for goodness sake. Telling customers they are approaching their authorised overdraft limit is a nice touch, but to regard that as a touchstone of good service is risible and frankly infantile.

And, by the way, I don’t know what the best deal is on unauthorised overdrafts. Why? Because I have managed without EVER going unauthorised – EVER in 60 years of having a bank account – so unauthorised rates are irrelevant. Somewhat more relevant are authorised overdraft arrangements, which I have used once in a blue moon, consciously and for some specific reason.

A number of contributors seem to be quite happy with their banks. I wonder therefore for straightforward current accounts just what the problems are that Which? wants addressed (that many don’t seem to have).
Unauthorised overdrafts is one topic that Which? has reported on before. It’s stance seemed to be that they are a legitimate way for us to use our bank accounts, and rates banks on how well they charged for them. This is contentious. I find this an irresponsible approach. If you are creditworthy you can arrange an overdraft facility with your bank. If your bank refuses then it may well believe you are not creditworthy (i.e. they don’t want to lend you money), perhaps because they judge you not capable of repaying. Therefore spending more than you have is both irresponsible, and dishonest to your bank. The key here though is Richards use of “regular users of unauthorised overdrafts”. They will generally know what they are doing and cannot complain at the financial penalties the banks make. Which? should not be condoning that use of an account.
I have, of course, total agreement that someone in crisis, or who makes a payment error of some kind – but as a one off -should expect assistance from the bank if they are otherwise a responsible account holder. “Loyalty” if you like.

Like Richard, I’ve been with the same bank since I went to university. In my case it has been about 45 years. That was in the days before there were incentives for students to sign up, though I recall that as a student I had the questionable privilege of an arty coloured cheque book, though I specified standard utilitarian cheque books in future. I chose my bank simply because it was convenient to make withdrawals.

I visit my present branch about once a month or two to pay in a few cheques. Usually I just post them through the letterbox in the evening rather than waiting at the counter when the bank is in the evening.

I’m sure there are better banks but I’m quite happy to stay with mine for the time being. What might encourage me to switch is closure of my local branch. Branch closures are happening quite frequently.

I am very happy with my Reward Account at Halifax. They pay me £5 a month as long as I don’t get into the red for more than 24 hours and pay in at least £750 a month. The only thing I have to watch is that when my main pension is paid in early I just have to switch some out and then back in. I get text warnings when my balance falls below £50 so normally avoid getting overdrawn, but even if I do it is only £3 a day. I don’t expect to get interest on a current account, and am ignoring Halifax’s offer to ‘upgrade’ to an account that would cost me £15 a month and give me all sorts of ‘benefits’ I don’t want.

This from The Telegraph seems very relevant to this conversation
http://www.telegraph.co.uk/finance/personalfinance/bank-accounts/12039897/I-paid-a-US-cheque-into-my-Barclays-account-and-became-unbankable.html

Banks must appreciate that there loads who do not have and know how to work on computers!! also even the machines they have within the banks; some can’t even use the cash machines. It may take 2 more generations 40-50 years at list and then more unemployment!!! And that hoping that every human will have at list a laptop at home.
For now we suffer for the luck of human staff in the local branch……

The large banks need to be broken up. There will not be any meaningful competition unless this happens. RBS should not only spin off Williams & Glyn’s, but the District and County Banks also, each with a few hundred branches, mainly in the North. Barclays should likewise shed Martins, and Lloyds the Halifax and West Riding Union banks, also essentially Northern businesses. We would then have a decent choice up here; the Southern elite would also be given a sprinkling of branches of these revived institutions to which they could transfer their allegiance, or they could do so online, benefiting everyone by vastly greater choice.

Contrary to the above comment, retail banks are a social service: that is the essence of their business, and the sooner this is realized and modifications to the institutions to provide locally-based decision making and a more personal service the better. Call centres are OK for dealing with simple transaction instructions but for anything more complex you should be calling the people who know you at the branch which holds your account.

Oh, and while it maybe fine to allow foreign banks to own some or all of ours, this should be subject to a ring-fence arrangement and statutory guarantee of fully independent management.

I have just received a request from Which? about “Your views on banking”. It lists 3 specific “bugbears” and another “something different” (bugbear). I am perfectly happy with my bank, but there is no specific opportunity here to say so. Therefore the “survey” will seemingly only generate negative comments, and not look at the proportion of satisfied to dissatisfied customers.

The survey includes a suggestion that banks overcharge for unauthorised overdrafts. Clients have the opportunity to get an authorised overdraft, if they are credit worthy, and certainly in the case of my bank we are clearly informed of the costs of using an unauthorised one. I regard continual use of unauthorised overdrafts – using money the bank has not agreed to, and may well not agree to – as a less-than-honest practice by the customer. They should not complain if they know the penalties the deliberate use of this tactic will incur.

Not a good approach to a survey in my view, I’m afraid, Which? but I am willing to accept I may have missed the point of the survey, or the logic behind it.

Criminal records and prison sentences for bank personal when they are caught defrauding or stealing from their clients, huge fines for banks and their personel for incompetence that leads to clients losing money.

The problem with the Banking industry is quite simply fraud because of its associated cost (to us), how it is an easy crime and the monies that are written off to it. Example headlines…

“spree that cost companies more than $300 million”
“British financial services firms lost a total of 5.4 billion pounds”
“Fraud cost retail banks 475 million”

Statements like this are incorrect as fraud doesn’t ultimately cost companies, financial services firms or retail banks anything.

Banks have dealt with fraud for many, many decades, forget the Internet. Fraud existed back in the days of credit card machines with carbon paper forms. The technology of fraud gets better each year. Fraud remains consistent. From a banking perspective, the cost to obey government regulations dwarfs the cost of any individual case of fraud. Don’t be fooled that the Banks are meeting these costs – it is us as consumers that ultimately pays for them (and through the nose), every time. And the Bankers still find the excess to award themselves million pound bonuses. So from a banking perspective, fraud has never qualified as a major threat. A banker looks at his balance sheets and writes off fraud as simply a cost of doing business. Such fraud may amount to billions of pounds each year, but the cost is spread across all sectors of the banking industry and ultimately indirectly to us (that’s you & me) as paying customers all over the world.

Banks must be possessed of some gene, the like of which is only seen in those of a self-destructive disposition. How else to explain the mealy-mouthed behaviour of not awarding compensation to victims of PPI miss-selling, because they would have bought a cheaper policy elsewhere instead? No matter that the victim – sorry, client – did not want PPI in the first place, & was persuaded to sign on the dotted line by the sales force. Sadly, it’s all too typical of the contempt that passes for customer service inside our banks. What’s sad about this is that even now, years after the crash, when their greed almost brought down the entire economic system, the banks still don’t get it.

It’s also almost impossible to make a complaint about a financial institution that ‘sticks’, because the procedure is fragmented, there is no common goal amongst the vast number of regulatory organisations to make sure issues raised are either passed to the relevant body or seen through to conclusion. There is no overall empathy to customers within these regulatory organisations other than to their own goals/targets. Complaints are often fobbed off as not meeting the remit of the complaining body’s mandate. ‘Not our issue’, to coin a phrase.

Banks are currently experiencing high volumes of customer contact driven largely by recent legislative changes, the complexity and nature of queries has also put increased pressure on their operational areas such that it has resulted in an increase in servicing volumes and response times. Because they are now more committed to remedying the compensation fiascos they are also now having to reinvest in recruiting and more training to get it better.

The Banks themselves: Employees are worried about their jobs, employees will systematically lie, spouting the corporate spiel (even blatantly lie) to do whatever it takes, knowing you have a valid issue but ignoring it, obfuscating the issue for the sake of their job.

Financial Ombudsman – deal with individual customer losses, so if your loss is small and effects a large number of customers, they have no remit other than to refund the amount you lost – for me it was small but effected ALL customers, so overall the amount was huge.

Advertising complaints to Advertising Standards regarding banks are seen as ‘private communications’ between the bank and customers. They aren’t interested regarding a Visa Electron Card being advertised as something it wasn’t.

Card Payment Services – Offices in London have no contact with the public, you have to leave an answerphone message – the call is rarely returned.

Consumer Direct – a complete waste of space -monotone call centre staff which basically puts your complaint into a database, and large numbers of similar complaints supposedly are ‘flagged’, only to be asked to complete a questionnaire on service received from CD at the end of the call – I’ve enough to do complaining without more stuff to distract me.

Moneysavingexpert.com forums do this for free (albeit through advertising) – and appears quicker, and far more effective – at getting a blatant dishonest acts by a Bank – ‘out there’ in the public eye.
There aren’t any other organisation consumers can trust (operating on this scale), as ‘independent’, grass roots based system – the forums are unmoderated -long may it continue, it’s about as ‘genuine’ as it can get at the moment.

The trouble is the guns are turning in the direction of moneysavingexpert.com by big business. Financial tips websites like Martin Lewis’s Moneysavingexpert.com are attracting a “biblical” following.

So be wary of responses in the forums that nudge you in directions other than your basic beliefs or try to placate you, big business is getting savvy to consumer’s alternative methods of complaint. Is Free banking really now a dangerous Myth? Surely Banks have the ONLY industry where RAW money just comes in at their front door. Beats me how businesses have to bust their guts to sell stock, service, manufacture, ship, design, provide solutions or even borrow money to invest BEFORE they can eventually get any cash generated as profit. Surely all banks have to do is open their front door & wait for someone to put the money into their hand. Do they even have to borrow the stuff like a lot of businesses try to?