Why competition in the current account market needs urgent attention

“consumer confidence in bank remains desperately low.” I am perfectly happy with my current account with Nationwide – it does all I want with no problems. It costs me no money to run, provides online banking, branches, cheque book, statements, debit card – what better deal should I be expecting?
I do not know where “desperately low confidence” emanates from – perhaps we are blowing a problem out of proportion? I did note the complaints about the ways banks handled unauthorised overdrafts – I must say I have little sympathy with those who regularly use banks’ (your and my) money without agreement; not a main criterion by which I believe we should judge a bank.
Perhaps there is hard evidence about banks’ misbehaviour with current accounts that I have missed. Have we polled customer satisfaction as opposed to dis-satisfaction? If 98% of us have not moved accounts does this indicate gross apathy, or perhaps we are not too upset by the way our current accounts are run.
Just some thoughts before we let the beaurocrats loose..

“The unhealthy dominance of the biggest banks needs to end.” I personally would be happy if there was only 1 provider, provided it treated customers fairly instead of treating them like cash cows. And I can’t see having more poor choices will be any better than having a limited number of poor choices, its the choices that need to change not the number of them.

“Six months on from these bold words and the new personal current account switching guarantee service has seen just 2% of people have switched accounts” Well if like me many people have found a bank that they’re happy with, than like me , there’s no point in switching current account.
So a personal current account switching guarantee service is/was a waste of time.

Why not have an “ISA switching guarantee service ” instead of the laughable 15 day guaranteed one. Cos we all know banks will take 15 days and the main reason people switch is because the banks drop rates, if they didn’t do that many people would probably be happy to stick, so 15 days is about 10 too long.

I also believe that without adding 8. Banks must offer a fee free current account, all you’re likely to achieve by waving a big stick at the banks is a scenario where the poorest in society will end up paying more for their banking.

Richard Lloyd needs to curb his use of both generalisations and emotive language:
“…and all the while consumer confidence in bank (sic) remains desperately low.”.
Talking as if the banking industry and it’s customers are homogeneous is simplistic. Some people, myself included are satisfied with their personal bank and the low switching rates may be in part a reflection of that.

I bank with the Nationwide but am not a passive banking customer. I am satisfied on the whole with their products and service, although I am never passive when things displease me. I have always found the Nationwide to be quick and constructive when responding to complaints, indeed I get the impression that they welcome feedback.

I usually find it’s productive to talk to my suppliers, resolve my problems and get improvements that work for both sides. I switched banks from Barclays some years ago when they became unhelpful but I prefer not to ‘solve’ problems by switching because switching, like war, should be a last resort.

I think switching levels, particularly when viewed on their own, may be a misleading indicator of the health of any consumer sector.

I have been a current account customer of RBS (and earlier in its Williams and Glyns incarnation) since 1976. I’d like them to give me more than 0.1% interest (it was 1% years ago), but their service just works. They made a rare mistake a few months ago by making an additional payment of my Council tax, but they sorted it out and explained how they got it wrong. The on-line system keeps improving and it is now possible to setup Standing Orders with different first payments (the lack of which led me to ask them to setup the Council tax Standing Order a year ago).

I am much more concerned with the Government’s demand that RBS forcibly transfer my account (and many others) to some upstart bank at the behest of “European officials” to offset the financial support of 2008. So much for individual choice! If this ever actually looks like happening then I am still pondering moving my account to a Scottish branch of RBS to avoid being hijacked in this unfair manner.

So where have Which? got such overwhelming evidence from to state “That is why today we have called for the competition regulator – the Competition and Markets Authority – to take action now”. Has a representative poll of CA Members revealed a disastrous situation?

Test no 7:
The cost, regulation and probable lack of profit for a pure banking service are the main barriers to new entrants.