Should we be told?

christook71

I have just found out that in order to use the Nationwide MySave account you have to pay your money directly into a Barclays bank a/c which is set up by Nationwide to receive payments from non Nationwide savers as they are not a clearing bank. The same is true of the West Bromwich Websave account as well as possibly some others. I quite understand the mechanics of all this but am I the only person that feels that both Nationwide and West Brom. should make it clear to investors that Barclays are being used and of course being paid. Transparency this is not.

ChiefGrasscutter

Pretty well every single Building Society uses one of the main clearing banks to act as their bankers.

The clue is when you are asked to make online deposits to a certain bank account No which is often 000000000, (whch will be at the clearing bank) and add the number of your building society account into the reference field to enable the money to be correctly allocated to the account within the building society

Indeed going further, perhaps you were unaware that the Newcastle Building Society actually has a subsidiary of itself than runs the front end customer operations (debits, credits to accounts, account opening/closing/ID checking etc) for other savings groups to enable them to provide online account access to their accounts for their customers.
First Save for instance uses the Newcastle subsidiary to 'run' its accounts... and obviously they will use one of the main clearining banks as their bankers to receive funds on their behalf.
The user is quite unaware that this is happening, though its perfectly normal to outsource "non core" activities to experts - all business do it.

noh

Nationwide is a "clearing bank" it is a member of the Cheque & Credit Clearing Company.

http://www.ukpayments.org.uk/uk_payment_schemes/cheque_credit_clearing/

The Nationwide MySave account is an oddity in so far as it is administered for Nationwide by a subsidary of the Newcastle Building society as mentioned by ChiefGrasscutter in the previous post.

The frontend and all backoffice administration for the MySave account is outsourced to NSS.

dunstonh

I quite understand the mechanics of all this but am I the only person that feels that both Nationwide and West Brom. should make it clear to investors that Barclays are being used and of course being paid.

Historically, all the building societies used clearing banks. Back in my banking days, I remember the building societies walking all their transactions over the road to the banks to pay them in just like any other bank customer.

How much have you been charged for them doing this?

opinions4u

am I the only person that feels that both Nationwide and West Brom. should make it clear to investors that Barclays are being used and of course being paid.

Why does it matter? As long as they pay you what they say they'll pay you I don't see what the problem is.

If you want real transparency, I suppose you could ask them to provide:

- cost of server
- cost of maintaining web site
- cost of each inidividaul transaction
- cost of branch / call centre staff in providing support for product
- cost of rates on the buildings
- salaries of staff

The list could go on forever.

If you can get a better rate/service elsewhere move. If not, stay put.

christook71

Thanks grasscutter and noh for your informative replies. Your answers reveal the machinations of these banks/building societies to be far more complicated than the majority of us realise.
Why therefore if Nationwide are a clearing bank are my funds being paid into Barclays? and more importantly, coming back to my post, am I not entitled to know?
I think the general public having suffered from the collapse of worldwide economies due to the banks appalling management of overly complicated financial matters that they didn't fully understand deserve more transparency in where their money is going.
As far as your comment dunstonh - it sounds sarcastic and I can only say that Nationwide are paying Barclays for their services and as far as I am aware they they are not using their own money so they must be using mine.

christook71

You are missing the point opinions4u. I don't mind what they do. What I mind is not being told. If you have ever had poor service from a company and taken your business away swearing never to use them again it is slightly annoying when you take your business down the road to their 'competitors' only to find that they are giving your business back to the people you have just been let down by. You'd be delighted with that would you?

antrobus

I suspect that this may well cause the OP even more concern, but the fact is that every building society in the country will have some kind of business relationship with a long list of banks. Indeed most banks have some kind of relationship with most other banks. They're all moving funds between each other on a daily basis and borrowing and lending from each other through the interbank market.

opinions4u

christook71 wrote: »

Thanks grasscutter and noh for your informative replies. Your answers reveal the machinations of these banks/building societies to be far more complicated than the majority of us realise.

It's unusual, but not complicated.

Why therefore if Nationwide are a clearing bank are my funds being paid into Barclays? and more importantly, coming back to my post, am I not entitled to know?

Have you asked?

I think the general public having suffered from the collapse of worldwide economies due to the banks appalling management of overly complicated financial matters that they didn't fully understand deserve more transparency in where their money is going.

Why does it matter, as long as the account does what it says it will do and pays what it says it will pay?

As far as your comment dunstonh - it sounds sarcastic

It's quite relevant. How much has it cost you? If the rate and service provided by the account appeal to you, what's the problem? If they don't, move. Why would it make a difference if they said "Using Barclays adds 60p to the cost of each transaction. We use them because it would have cost us £3m to build this product on our systems and outsourcing it meant it could be done quickly for £1m"?

and I can only say that Nationwide are paying Barclays for their services and as far as I am aware they they are not using their own money so they must be using mine.

Or they may be saving you and others a huge sum by doing things this way.

Why does it matter?

You are missing the point opinions4u. I don't mind what they do. What I mind is not being told.

Well if they won't tell you, take your business elsewhere. If you are worried about the ethics of their business arrangements, do you want them to tell you who cleans the toilets in head office, who has the IT contract to outsource to Mongolia, who does the catering for the board meetings? There's so much you can ask about to ensure there's no connections with companies you don't like.

oldvicar

Key things to remember about the MySave account are:

The deposits count as with Nationwide (including especially for FSCS purposes)

Transfers between this and other Nationwide accounts are not instant (in any significant way). It takes as long as if going by BACS to/from the Newcastle BS (who, given the context of OP's post I imagine use Barclays as their clearer)

christook71

The thing is opinions4u some things do matter.
If you can buy a tshirt for £2 in the high street it does matter that a 12 year old kid is in a sweat shop being paid 2p to make it.
It does matter that that MI6 send suspected terrorists to Libya to get tortured because its illegal here (allegedly). Sorry to go well off subject here it must of been your comments about outsourcing IT to Mongolia and toilet cleaning which were also clearly off subject.