/ Money

Voice your views on banking reform

Group of young people shouting

The voice of consumers in banking reform isn’t always as loud as it could be – maybe because the invite to join in isn’t clear or the discussions get a bit techy? We’re notching up the volume so you can tell us here.

Following the success of the Big Banking debate in February last year, we’ll be hosting a joint event with the Independent Commission on Banking (ICB) ‘Which? – Your Voice for Better Banking’.

It’ll take place on the evening of Thursday 24 May at a London location.

The event will be an opportunity to have your say on some of the key issues raised in the ICB’s interim report – which include ring fencing retail banks, improving transparency and helping consumers switch accounts.

How does this affect you?

If you’re wondering how issues like this affect your day-to-day banking it’s worth noting that they really do.

Have you been fed up with your current account’s interest rate and overdraft fees, but haven’t bothered switching accounts because of the hassle of changing all those pesky direct debits?

Well, a recommendation in the report calls for portable bank account numbers. A potential benefit of this is the ability to take your bank account number with you, reducing the hassle for customers.

Big banks squeezing out the little ones

And competition is all about making sure the big players don’t have it all their own way. If you used to like getting veg from your local grocer but have found they’ve been pushed out by big brand supermarkets then it’s the equivalent for the banks. The financial crisis has resulted in reduced competition – the big banks have got bigger and the small ones have been forced out.

With the five big banks dominating the market it’s hard for others to thrive and so the range of incentives and benefits can be limited as there can be less difference between the bunch.

Would you feel your money was safer if banks separated their retail business (dealing with you and me) from their investment businesses (big businesses, stocks and shares)? At least this way, we wouldn’t feel banks were gambling so much with our hard-earned cash?

Whatever your view, we’d like you to tell us what you think. We appreciate we can’t squeeze everyone into one space – but we’ve certainly room to squeeze in as many opinions as possible by collecting them here and sharing them with the ICB.

Comments

I no longer trust Banks – Any Bank –

What we should have is a real National Bank – A social bank – run for the benefit of the customer only.- any profit shared by the customers and the bank workers equally. So say a profit of £1million is shared 50% to customers – 50% to Bank workers. There would be far fewer bank workers so this would be the incentive to make profit for all.

It is obvious that the last two major recessions were due to the endless obsession of Private Banks to maximising profits for themselves and their shareholders. The customer is never considered.

The customer is never right – totally different from the usual businesses where the customer is supposed to be always right.

Too big to fail and too big to regulate. The tax payers’ nightmare risk.

Alan says:
13 April 2011

Make the top bosses legally responsible with jail terms and loss of all possesions for a repeat. They have no responsibility fears just job loss with a fat pay off. Maybe 20 years in shared showers will make them think next time.

Sophie Gilbert says:
14 April 2011

Separating the retail business from the investment business is one of the key things, and another is what Alan suggests, huge personal punishment for utter recklessness.

pickle says:
14 April 2011

It’s a commercial world – every business is out to make a profit – as it should do otherwise it would become bankrupt. If it is owned by an individual then profit is their livelihood. If it is owned by a group of people who have put money into the business then profit goes to them.
The “bank problem” arises when one half of a business prospers far more than the other half – mainly due to risk taking being very successful. The managers (read bankers) of that half voted themselves a big share of the profits – without consulting those who invested money into the business….hoping they would get away with it. and they did!
In my view the risky part of the bank should be separated from the ‘normal’ high street bank and each treated as a separate firm. The risky part of the bank might not be so successful another time and could drag down the high street part of the bank.

maybe we should all take a moral judgement and put all of our money into mutuals?

Why are you with your high street bank? I have no idea why I am still with mine, I already have an account with a mutual and so may be changing altogether very soon.

If people had so many issues with shareholders and risk taking, put your money where your mouth is and move to a mutual. Is there any service you can get from a high street bank that you can’t from a mutual?

Whatever happens with the banking reforms will mean more costs worse service than we have now . It seems ok for politicians to say that these reforms will be better long term but i think its yet again a talking exercise to cover up banking incompetence and individual greed. Banks in this country can do exactly what they want and charge what they want . the banks caused the last recession and forced a government bailout yet they have been allowed to pay outrageous bonuses while people lose there jobs . the banks need alot more regulation and taxation . The bank bosses must be laughing there heads off after whats happened and can stick 2 fingers upto their customers. Come on Cameron whats happened to your big society or are the banks exempt

Henry says:
28 April 2011

I agree with Anthony completely – after starting the crisis, taking large bailouts, putting the country into recession and depression, still denying loans to businesses and charging far more if they did and spreading the myth that that they will leave for other shores if conditions were made tougher, the banking bigwigs are laughing their heads off at the govt, the shareholders and the public for having got away with it. The govt is being weak kneed – it is composed of yellow bellied politicians who are only biding their time in parliament to take up juicily paid directorships in the banks when they eventually leave politics. No matter what their war-cry, do you, for one moment, imagine they are going to bring in tough rules for the banks?

I think the banks’ bluff should be called – No one in the foreign shores wants them anyway, because:
– nobody will trust them not to misbehave there as well.
– there are not enough banking jobs out there to absorb a mass migration from British and other jurisdictions. If there were, it would have precisely the opposite effect ie. it will bring down their obscenely fat pay packets and bonus rates.
– It will also be competition for the local banks which the local govt is not going to like.
– This is an idle threat anyway – they actually do not want to go because first they will have to speak the local lingo (if at all, the jobs are likely to occur in non-english speaking places) and still pay tax to the British chancellor regardless.

The odds are stacked against them and the sooner we all realise this the better.

Which brings me back to my original point – In this day and age of ultimate interconectedness why can’t we all be our own banks? We borrow and lend as and when it suits us, to and from whomsoever it suits us and at rates that suit us; all without the staffing levels, the swish offices and overheads and the fat pay packets and bonus levels of the robber-baron/middleman/conman/bank – take your pick.

Paul says:
14 April 2011

try to cash your check at the end of the month at any lloyyyds branch… and you will have at least half an hour guaranteed in the queue, 4 from 5 service windows will be closed.

May I start a campaign here? Specifically for on-line accounts: all savings institutions should be made, by law, to DISPLAY the current interest rate – pertaining to that account – on all pages showing that accounts’ current balance.

Wouldn’t that immediately show all on-line investors what their savings were currently earning? We would soon learn when interest rates dipped on our chosen account!

If you have more than just the one account, or haven’t accessed your on-line account for a while, it is sometimes the Devil’s Own Job to find out the current interest rate applying to that account.

Banks and Building Societies are always introducing new accounts with similar names, and making old accounts obsolete – all at different interest rates – so that searching through a l o n g list of new and obsolete account names, looking for current interest rates, is time consuming. Sometimes, it is the only way to discover that your account has been “obsoleted”.

It would be the easiest thing for the financial institutions to implement. It would be a great benefit on-line savers, seeing their interest rate displayed on every page. But it may be resisted by the Banks etc who rely, to a great extent, upon investor inertia.

How often have *you* found your “once-shiny, new, high-interest” on-line account quietly closed to new investors, its interest rates slowly reduced to a pittance, while, unknown to you, new accounts have been opened with better rates?

But if these (reducing) interest rates were displayed every time you logged in and viewed the current balance, wouldn’t you be better informed?

Banks are very quick to plaster their Home Pages with hot, new, high-interest rates for the latest “shiny, new, accounts”. But rather reticent about telling you what your chosen account is earning, or when its initial bonus period has come to an end.

Let’s have a law which says financial institutions must display *your* current interest rate on the same page which displays the current balance.

Terry says:
13 May 2011

I agree but would go further. Banks know that the main attraction of a savings account is the interest rate. They should not only display the rate on statements (paper ones and online ones) but also notify you when they change the terms of the account by changing the interest rate – an email notification and a note on the statement showing the original rate and the new rate would be sufficient.
I wonder how investors have become the the poor relation in this arrangement. Perhaps if a large enough number of investors with one bank (I am happy to suggest a target, but there are so many to choose from) acted in concert to move their savings, that bank may realise who actually holds the upper hand. A few grumbing investors voicing their disapproval.from time to time are hardly likely to achieve much.

Richard writes: “What we should have is a real National Bank – A social bank – run for the benefit of the customer only.- any profit shared by the customers and the bank workers equally.”

This is very close to how the Co-op Bank works. I already use it. Check it out.

Cheers…

Mikhail says:
22 April 2011

Really? What makes you say that? …The Co-op advertising? The Co-op Bank charges their costumers even MORE than some other high-street banks.

Here are some facts from their T&C:
Foreign transaction fee: 2.75% (Applied to any debit or credit card transaction in a currency other than Sterling.) Santander, Halifax, Norwich & Peterborough and Nationwide charge less!

As long as those charges are not the actual charges, e.g., that Co-op pays to VISA, but higher it does not make co-op bank any better than any other bank!

It seems that all Co-op current accounts have no interest on in-credit balance, e.g., Lloyds pays up to 4% and there are many other banks which pay interest on their current accounts! And of course co-op CEO takes home a basic salary of £664,000, along with performance-related payments of £511,000 – just as other bankers.

Dean writes: “maybe we should all take a moral judgement and put all of our money into mutuals?”

I’m afraid that “Mutuals” were NOT all immune from irresponsible action leading up to the Banking Crisis. The Derbyshire (bad debts), Cheshire (bad debts) and the Dunfermaline (property crash) all had to be taken over and rescued by the Nationwide. The Chelsea Building Society lost such a huge amount of money in the Icelandic Banking crash that it had to be taken over and rescued by The Yorkshire.

You should see what the “Mutuals” pay their Directors!

I wrote:

“Richard writes: “What we should have is a real National Bank – A social bank – run for the benefit of the customer only.- any profit shared by the customers and the bank workers equally.”

This is very close to how the Co-op Bank works. I already use it. Check it out.”

But then, a “Mikhail” writes:

“Really? What makes you say that? …The Co-op advertising? The Co-op Bank charges their costumers even MORE than some other high-street banks….”

and then goes on, in a form of English which is quite difficult to understand (what does that third paragraph mean, for example?), to rant about interest rates, charges and fees! As if that had *anything* to do with “sharing its profits with customers and employees”.

The Co-op Bank does not have shareholders (it is, therefore, not listed on the LSE). Its profits are shared with its members. Its members are its customers and employees who wish to join. It did not require a penny from the Government during the Banking crisis. It consults its members about its investment policy, and other matters, on a regular basis.

THAT is what makes me say it!

It may not be perfect but, as a customer-member, what I pay in charges I recoup in Dividend. So, “Mikhail”, just what is your point?

Mikhail says:
28 April 2011

I gave you at least 4 points, you gave me only one – that you cannot read properly.

So “Keith”, how could the co-op provide to its customers worse services than some of the high-street banks with shareholders?

Tony says:
27 April 2011

Let’s have some proper consultation over what the banker’s get paid with ALL shareholders getting a chance to vote on their pay not just the current directors cartel. By all shareholders I include those who have money in pension funds, insurance policies and in in ISAs that are invested in the banks, they should all be given the chance to vote on the bankers pay,

Henry says:
27 April 2011

Moving away from your high st bank has always been easy – what has not been easy is circumventing the total power the big five wield over the entire industry. For instance, no matter whose cheque you write, it has to go through the clearing system owned and run by the big four in cahoots with BoE. Why does a cheque drawn on co-op or any other non-four or indeed your building society, take 7 days to clear? In this day of the electron, why can payments and receipts not clear at the speed of the electron. Because they still allow themselves that delay and deposit the funds in the marketplace to make a few quid while at it.

In this day of the speed of the electron and all the technology at our disposal, why can’t all of us be our own bank, settle our own debts between ourselves and borrow and lend between ourselves? That will be the day of the true mutual. Big banking will still not disappear but they will have to come begging on our terms – what a day that will be eh?

Michael says:
29 April 2011

In Holland the boos of a bank was gong to take a bonus of under 2 million euros. So many customer changed accounts or threatened to that he gave up the bonus.
We need to do the same. I am with the Halifax. I’m happy to change my account

Mikhail says:
30 April 2011

Haha I was planning to move to Holland next year, Holland also has excellent pension schemes!

“Mikhail” wrote:

“I gave you at least 4 points, you gave me only one – that you cannot read properly.”

All of your points were irrelevant concerning the ownership and profits of the Co-op Bank, which were the sole issues being discussed before you butted in.

“Mikhail” wrote:

“As long as those charges are not the actual charges, e.g., that Co-op pays to VISA, but higher it does not make co-op bank any better than any other bank!”

That sentence does not make any sense. I can read, but you cannot write simple English.

“Mikhail” wrote”

“So “Keith”, how could the co-op provide to its customers worse services than some of the high-street banks with shareholders?”

If you check the most recent Which? customer reviews, you will find the Co-op Bank/Smile comes out in the top three in one survey (scoring 79% satisfaction), and second (scoring 86% satisfaction) or joint third (85% satisfaction), in the Which? recommended bank account providers. All that, plus you get Dividends.

But the original issue was a comment from Richard: “What we should have is a real National Bank – A social bank – run for the benefit of the customer only.- any profit shared by the customers and the bank workers equally.”

To which I replied: “This is very close to how the Co-op Bank works. I already use it. Check it out.”

That is still true. The Co-op Bank is owned by its members and workers, and shares its profits with them.

You just keep interrupting with irrelevant comments, writing poor English, and then demonstrating your failure to research Which? findings. And you lie that I “cannot read properly”. You are just trolling.

So “Keith”, how could the co-op provide to its customers worse services than some of the high-street banks with shareholders?

Mikhail says:
5 May 2011

“As long as those charges are not the actual charges, e.g., that Co-op pays to VISA, but higher it does not make co-op bank any better than any other bank!”

I guess I owe you more detailed explanation: the co-op itself has fees to pay, e.g., to VISA/MasterCard, etc. to facilitate all payments going through those systems. That’s how VISA makes a living. However, as a truly ‘mutual friendly’ bank, the co-op must pass those charges to its clients or have losses (I hope you’re following the logic) or compensate e.g., VISA fees using other sources, e.g., interest paid by people who don’t pay their balances in full, mortgages, etc. However, VISA charges 1%, if you use your card in Europe (currency exchange fee), but the co-op charges 2.75%. Nationwide 2%, Halifax, Santander and N&P ZERO%. 2.75% is a rip-off only Amex charges more (2.99%)

“If you check the most recent Which? customer reviews, you will find the Co-op Bank/Smile comes out in the top three in one survey (scoring 79% satisfaction), and second (scoring 86% satisfaction) or joint third (85% satisfaction), in the Which? recommended bank account providers.”

According to Which? Tesco mobile is the best mobile network in the UK. Despite the fact that Tesco mobile runs on O2 (apparently the second most popular mobile network in the UK) I have serious doubts about the quality of such reviews/researches. I guess this kind of research and websites are for people who do not have brains, therefore their own opinion, and have to rely on somebody else. Well the fact is if I tell you 2+2=4 you would rather believe 2+2=5 if Which? stated so.

“All that, plus you get Dividends.”
What is the ratio of dividends you receive to amount you spend?

“To which I replied: “This is very close to how the Co-op Bank works. I already use it. Check it out.”

…and I said there are many more commercial banks that are considerably more rewarding in all aspects of banking to its customers than co-op!

“That is still true. The Co-op Bank is owned by its members and workers, and shares its profits with them.”

I don’t care if they do or don’t share their profits, I receive £235 interest paid to my non co-op bank current account every year, plus no fees on cash withdrawal and foreign currency exchange transactions on my credit card. Co-op is faaaaaaaaaaaaaaaaaar from beating that!

“You just keep interrupting with irrelevant comments, writing poor English, and then demonstrating your failure to research Which? findings.”

You can’t research ANYTHING! So far you have only demonstrated that you can make research on another person’s research, that in university terms is called plagiarism (absence of your own ideas), but I guess you never went to uni.

Hi Mikhail/Keith
It’s great to see you’re so passionate about the subject, however I have to point out that your comments are getting very personal. Please remember that we do have clear commenting guidelines that we expect all users to stick to. In these we clearly state that we don’t tolerate offensive or harassing language or behaviour towards others, or comments that veer off topic. Please familiarise yourself with these before posting further comments.
many thanks, Hannah

LiLo says:
7 May 2011

i suggest 2 small changes which in my case will make a big difference (and i have fed them back to my bank already but not sure they are listening). my bank is Halifax by the way. 1) they need multichannel approach to customer service – branch and phone is not enough. i know they are on Twitter but replies to posts are patchy. i suggest secure email (Amex does this beautifully) and 24/7 social media presence, preferably Facebook. 2) incentivise customer service teams not based on selling products (which leads to them assuming a rather aggressive sales approach rather than helping customers), but on customer feedback and satisfaction scores. these 2 small changes would make a big difference, no government involvement or hefty investment required.

LiLo – I am just a little skittish to have two social networks owned and based in the US as primary communication channels. If there was an EU or UK based system than I would feel happier that the resilience of the system would be higher and that US law would not be an additional factor.

You are aware that both Twitter and Facebook are, or planning to, commercialise all the information passing through their systems?

Leslie says:
7 May 2011

My banking requirements are quite simple. A current account does not have to add interest but needs to offer a range of efficiently run services such as easy access to cash, direct debits and standing orders etc. There should also be a linked instant access savings account with a competitive rate of interest that gives an above inflation return. Banks do not seem to worry that customers take their savings elsewhere for a better deal.

Also, the Government should change the way that savings interest is taxed. The Bank of England target rate of inflation is 2% but, in spite of this recognition that our money loses its value over time, interest is still taxed at source as though it is real income. The first 2% of dividend from investments should be free of tax. This would be a welcome concession if cash ISAs are abolished.

Beth says:
13 May 2011

I like Leslie’s ideas particularly on taxation.

I have two current accounts.

One is with Santander, because First stopped having a connected savings account with a non-insulting interest rate, and I transferred to Santander to acquired £100 and an interest rate of 5% on balances up to £2500, so I use it like a savings account. It has a connecting easy access savings account (3%) which enables instant topping up of the 5% current account. I think this is incredible – why would a Bank give such a high interest rate for providing services (DDs and SOs etc.)?

I keep my old BofS account because I have so many Direct Debits and Standing Orders on it and there is a local branch where I seek clarification from a person (not an automated service) and, if necessary, complain and achieve resolution and compensation (just the £20 they charge if we make a mistake!) I mainly bank online. It pays £5 because I pay in £1000 every month – it can be moved out instantly to earn interest elsewhere. I find this surprising too, but I’m not complaining.

Would a Personal Bank Number support my belt-and-braces preference for keeping two current accounts?

Credit cards give me “cashback” for paying in full, as well as the privilege of not paying instantly for my purchases and insurance if the company goes bust. They also have better means of communicating (internal email). Again I find this pleasing, but still think it’s illogical.

I would welcome clear communication from Banks, specifically the current interest rate as a percentage like a government health warning in large bold type at the top of every statement. Finding the current rate is sometimes even beyond bank staff, who ask “When did you open the account?” Had I known this would be significant I would have made a note of it! I can work out the percentage, but I think many people can not. This enabled me to question Santander who were initially paying 0.5% instead of their promised 5% and get the error corrected.

I am pleased that mis-selling is being successfully addressed and look forward to unfair overcharging being next!