MSE News: Banks must do more to ensure current account users get the best deal

Former_MSE_Paloma · 22 October 2015 at 9:18AM

Banks must make it easier for customers to take charge of their accounts, the competition regulator has announced...

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Banks must do more to ensure current account users get the best deal

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jimjames · 22 October 2015 at 9:27AM

Ridiculous to suggest a lack of competition when banks are paying up to £200 for new customers to switch. Just because people aren't switching doesn't mean the process isn't working more that people are happy or too lazy to bother. No different to switching energy suppliers which has been in place for 15+ years and still a majority have never changed which would save £200 or so a year.

Zanderman · 22 October 2015 at 9:37AM

jimjames wrote: »

Ridiculous to suggest a lack of competition when banks are paying up to £200 for new customers to switch. Just because people aren't switching doesn't mean the process isn't working more that people are happy or too lazy to bother. No different to switching energy suppliers which has been in place for 15+ years and still a majority have never changed which would save £200 or so a year.

Agree entirely. I don't see a need for change to encourage competition (basically by encouraging switching) as I don't believe any change will have any effect on switching.

Those people who don't switch (whether bank accounts, gas suppliers, broadband suppliers etc, it makes no difference) are not switching because they are either happy as things are, or don't realise things could be better.

If happy as they are they will never switch.

If they don't realise things could be better by switching - in a world crammed full of incentives to switch (including lots of print, online and TV ads promoting switching of all types, all shouting out about the incentives) - then they never will.

The message is already out there loud and clear - and a proportion of people just aren't, and probably never will be, interested.

jimjames · 22 October 2015 at 9:58AM

You only need to read a few comments on this link to realise what a futile exercise this is. I know it's the DM but gives a few indications of the mentality being dealt with here.

http://dailym.ai/1OJAw5k

colsten · 22 October 2015 at 10:01AM

I would agree that consumers need more education about current accounts but I disagree that this could be achieved by banks making switching easier, or that success can be measured by the number of people that switch.

It's schools and money journalists that should be telling people that e.g.

it's perfectly ok, and even smart, to have more than one current account
multiple current accounts don't trash your credit records
it's critical to read T&C and charges leaflets
it's good practice to keep an eye on new offerings and use them if they are better

grumbler · 22 October 2015 at 10:08AM

What does the CMA propose?
... Banks should increase funding for a widespread advertising campaign promoting the seven-day current account switch service launched in 2012, and improve the service it offers.

What a nonsense. The service works fine and doesn't need serious improvements.
If CMA think that the switching service needs advertising (it doesn't IMO), then they can advertise it themselves instead of wasting money on pointless investigations like this strained one.

There are much more serious problems in banking industry that need attention of the regulators than this far-fetched one. E.g. reckless accounts freezing for indefinite time leaving customers without any money. Irresponsible reporting to CIFAS and other 'black lists' with impunity.

Consumerist · 22 October 2015 at 11:40AM

However, it's [CMA] not gone as far as recommending an end to free if-in-credit accounts . . .

I can almost taste the sigh of relief on that one.

Archi_Bald · 22 October 2015 at 1:34PM

Just heard on the news that the CMA study, which will make final recommendations in 6 months time, has so far cost the tax payer £4.5 million. What a terrible waste of money.

michaels · 22 October 2015 at 1:39PM

Consumerist wrote: »

I can almost taste the sigh of relief on that one.

And the downcast faces in the bank boardrooms - the industry would love nothing more than to be 'forced' to charge for a service that competition currently forces them to provide for free.

Archi_Bald wrote: »

Just heard on the news that the CMA study, which will make final recommendations in 6 months time, has so far cost the tax payer £4.5 million. What a terrible waste of money.

What annoys me is that there is a cost to switching, credit scoring is often gives weight to how long you have been 'with your bank' which this study and indeed most of the guides like Martin's ignore. For businesses it is an even bigger issue. Of course this could be overcoem if your accoutn history came with you to the new bank but no one seems to have even thought about it.

Archi_Bald · 22 October 2015 at 1:50PM

michaels wrote: »

What annoys me is that there is a cost to switching, credit scoring is often gives weight to how long you have been 'with your bank' which this study and indeed most of the guides like Martin's ignore. For businesses it is an even bigger issue. Of course this could be overcoem if your accoutn history came with you to the new bank but no one seems to have even thought about it.

I reckon there's two main lots of personal switchers:

the bonus tarts. They couldn't care less about keeping their history for a switched account
those unhappy with their bank, often because of the charges. The last thing they might want is that the new bank gets their history

The length of having had a current account seems quite overrated, anyway. The last 6 years of banking history that's freely available to banks via the CRAs should be sufficient for any lender.

I can't comment for businesses.

Cisco001 · 22 October 2015 at 1:58PM

grumbler wrote: »

What a nonsense. The service works fine and doesn't need serious improvements.
If CMA think that the switching service needs advertising (it doesn't IMO), then they can advertise it themselves instead of wasting money on pointless investigations like this strained one.

These people just trying justify themselves to stay in the job of 'investigating'

MSE News: Banks must do more to ensure current account users get the best deal

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