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Could this be the turning point for real change in banking?

Bank signs

The government will today respond to the Independent Commission on Banking’s (ICB) recommendations to reform the banks. It’s a once in a lifetime opportunity, but banks shouldn’t wait to treat their customers well.

We talk a lot about banking reform at Which? – and I mean a lot. But it’s with good reason. Banking services are vital to our everyday lives. So, when things go wrong, it can be disastrous on an individual level and for the wider economy.

In George Osborne’s response to the ICB’s recommendations, one of the key things he’ll announce are plans to separate retail banking from more risky investment activities. Otherwise known as ‘ring-fencing’, this is something both we support and, from the comments made here on Which? Conversation and at our ‘Your Voice’ events, consumers support it too.

Ring-fencing would mean that, if the investment bank was at risk of failing, the retail banking services upon which most of us rely wouldn’t be harmed. Theoretically, this would reduce the likelihood of a massive taxpayer bailout, as seen in 2008.

Customers need to have their say

One of the things we’ve been particularly vocal about is the missing voice of those most affected by the banking crisis – the consumer. So, in advance of the government’s announcement today, we carried out research to find out what people think about reform and how soon it should happen.

We found that when it comes to banking reform, almost half feel the government prioritises the opinions of banks over everything else, whether that’s consumers, businesses or regulators. That’s quite a depressing statistic, but somewhat understandable when you consider the power of the banking lobby and the distrust people feel in the banking sector overall.

We also found that only one in five people are confident that the government will actually reform the banking sector. Perhaps this is a wake-up call for the Chancellor to keep his promises and stick to a robust reform agenda.

Impatient for change

We’re no doubt ready for change. In fact, most people are impatient, with the vast majority (94%) wanting banks to make significant changes within five years, and two thirds wanting to see reform in the next 12 months.

That may sound like a big ask, but if banks think the old chestnut of ‘it’s too complicated to undertake that soon’ will wash with the public, they should know that almost 57% of people don’t think that’s a valid reason for holding back.

Moreover, half of the population doesn’t think the potential cost of change, or arguments that other countries aren’t doing the same, should prevent reforms going ahead either.

Banks can make changes now

As for Which?, we think the government has a once in a lifetime opportunity to reform the banking industry, restore consumer trust and prove it hasn’t let banks off the hook.

And aside from that, banks don’t need to wait for the government to change the way they carry out their business. We’re all bearing the cost of the bank bail-out – £2,000 for every man, woman and child has been injected into the banking system, with £5 billion a year in interest payments. Don’t we deserve a bit of payback now?

Banks have the power to develop value for money products now. They can sort out their complaints handling practices and deliver a service that will go some way to restoring trust in an industry that’s let us all down. How about delivering some of that as a New Year gift to their customers?


It is all very well to talk like this. I agree bankers should not be paid any bonuses let alone these obscene amounts that seem standard. However anybody in the past who has tried to change the system and to nationalise the banks and print their own money seems to have died a sudden death. A most famous one is Abraham Lincoln. The banks are controlled by a few families who do not even appear on the rich lists and are not about to give up their wealth for any government.