MSE News: Government wants smarter basic bank accounts

crittertog

JuicyJesus wrote: »

Lovely stuff. Now scale that service up from a tiny credit union to a bank the size of, for example, Lloyds TSB. Logistical nightmare.

Or not. Make it possible to manage the set-up online, and (hopefully the majority of) the customers can sort it out themselves. If the banks' IT systems can't handle a jump in accounts of about a factor of 5, it's probably poorly written (I work in IT and aim for a 2 orders of magnitude increase in load before degradation, at the very least).

lancashirelassie

I love my Halifax basic account, and it has pictures of sub accounts of piggy banks as well. I despise the banks through their greed I left the banking system for a while (7 years acutally). As it is in reality we have to use them so its my choice to go basic. Also helps not going overdrawn and does stop overspending I am in control of my payments I use the old fashioned way of standing order not direct debit - I love the online banking now I am using it. I am sure lots of benefits people would be fine with this and manage it themselves if they had access to the internet I am sure many do as they have mobile phones.Why should the worse off financially be treat any less? back off folks you dont know all their circumstances.

JuicyJesus

crittertog wrote: »

Or not. Make it possible to manage the set-up online, and (hopefully the majority of) the customers can sort it out themselves.

The sort of people who need this sort of service will not be able to or want to use Internet banking, I can guarantee you. Basic bank accounts are especially expensive for banks to operate because the customer segments they tend to appeal to and/or be sold to (i.e. people who are just generally sh*t with money or on benefits or both) tend to prefer branch banking and cash to Internet or telephone banking.

I'll put this bluntly: the people who would want or need this service are people who are thick enough to need the bank to manage their money and budgeting for them because they cannot or will not do so themselves. If they cannot be bothered to sit down and work out a budget with pen and paper now they will not do so on a computer.

If the banks' IT systems can't handle a jump in accounts of about a factor of 5, it's probably poorly written (I work in IT and aim for a 2 orders of magnitude increase in load before degradation, at the very least).

It isn't the IT systems that are a problem. It's the cost of managing such a service, especially given the points I made above. Why should banks be forced to nanny their customers at their own expense? At least allow them to charge a monthly maintenance fee for this type of account so they can recoup at least some of the administration costs. A lot of the contention with basic bank accounts is that banks make a lot of loss on them for !!!!!! all gain. Say what you like about bank profits or bonuses or whatever but if someone told a small business owner they had to give more expensive services to less profitable customers for no money they would be told to sod off.

ThinkBanking already provide such a service as described, and they charge a monthly fee for it. Personally I think it's a rip-off, but if you want to pay someone else to manage your day to day finances for you I see no reason why you can't. Conversely, if you want someone to do such a thing I don't see why this charge should be borne by anyone else.

Consumerist

Butterfly_Brain wrote: »

I much prefer the envelope system....pull all of your cash out of the banks and put bill money in separate envelopes, it has worked for me for years as it did my mother and both grandmothers and I am never overdrawn.

I understand the rationale but you are effectively not using the banking system at all for paying your bills. How do you actually settle the bills with the cash in your envelopes?

dr_adidas01

Consumerist wrote: »

I understand the rationale but you are effectively not using the banking system at all for paying your bills. How do you actually settle the bills with the cash in your envelopes?

There a funny little thing attached to your bill that your supplier sends, called a bank giro credit slip.

So you can take this into the post office and pay your bills that way. Thats what the OP does I'm guessing!!!

Consumerist

dr_adidas01 wrote: »

There a funny little thing attached to your bill that your supplier sends, called a bank giro credit slip. So you can take this into the post office and pay your bills that way. Thats what the OP does I'm guessing!!!

Just seems a bit of a chore to go to the bank to withdraw the cash and then go back to the bank (or Post Office) to pay the bills. Seems easier to me to divide up the money on paper then pay each bill by bank transfers from a single account on the appropriate dates.

It is likely that the OP is far fitter than I am, however. .

JuicyJesus

Consumerist wrote: »

Just seems a bit of a chore to go to the bank to withdraw the cash and then go back to the bank (or Post Office) to pay the bills. Seems easier to me to divide up the money on paper then pay each bill by bank transfers from a single account on the appropriate dates.

You'd think that, but millions of people apparently think drawing out cash and then waiting in a queue at the Post Office/bank is "better". I have no idea why.

Rafter

Just like the millions who queue up outside the supermarket and withdraw cash on their debit card that they then spend in store!

It has been in the banks interest not to give people the tools they need to know exactly what is in their accounts at any point in time and what is due to be paid - that way they maximise income on overdraft interest and fees.

Hopefully mobile banking will change all that without the need for complicated bank accounts. You will have your main account for bills and your electronic wallet on your phone for all the other stuff and immediately be able to see how much you have left - just like looking in your purse or wallet.

R.

JuicyJesus

Rafter wrote: »

It has been in the banks interest not to give people the tools they need to know exactly what is in their accounts at any point in time and what is due to be paid - that way they maximise income on overdraft interest and fees.

Yeah, banks don't provide branches, cash machines, telephone banking, Internet banking, mobile banking or daily text messages containing your balance, all free of any charge.

Oh wait, yes they do.

I also have a brilliant way of knowing what's due to be paid. It's called a calendar. Direct Debits come out on specific dates listed on this magical device, and after these dates have come out they will have been paid; conversely, before these dates arrive they will not have been. You can therefore see this at a glance.

Always stuns me how people never seemed to have this sort of issue many moons ago when things like telephone or Internet banking didn't even exist and balances weren't real time, and things should therefore have been even harder to keep track of. Could it just be that people can't be a*sed to budget any more?

Hopefully mobile banking will change all that without the need for complicated bank accounts. You will have your main account for bills and your electronic wallet on your phone for all the other stuff and immediately be able to see how much you have left - just like looking in your purse or wallet.

You can do that now. Have two separate accounts, one for spending money and one for bills. Transfer money to bills account on payday to cover all bills due, allow balance to fall naturally to nil as Direct Debits are paid, repeat next payday. I do this, it works stunningly well.

Or you can pay a company like ThinkBanking £15 a month to do the same thing only less well. Your choice.

Rafter

Blimey JJ! Pretty negative response to what was trying to be an objective and helpful post!

Sure you can create budgeting spreadsheets and get text alerts or log in. But can you really do that while standing at the till in a supermarket?

There is absolutely nothing to stop a bank from giving you a card or phone app that tells you exactly how much is in your current account at that exact moment in time just as you could see how much cash you have by looking in your purse or wallet.

Problem is they would lose millions in overdraft fees, charges and interest if they did so.

That is why I'm hopeful that the mobile phone companies will do it for their customers instead because they arent burdened by the costs of all those branches, cash machines and bonus payments linked to unfair income streams!

R.