MSE News: Osborne commits to speedier bank account switching

dalesrider

pmduk wrote: »

Osborne's already said that he wants a system where no bank is too big to fail. Wait until he sees the effect a few bank failures has on overseas confidence in the UK, although, as with most politicians, he'll be out of office by then and will blame the current incumbent for the results of his own decisions.

I guess we already have seen enough near failures and how that effected public confidence.
So much so that they were all bailed out.

It's not a case of one failing. Its the knock on effect that will bring down others as consumer confidence dives and runs start..... Because you can be sure that the media will not help in boosting confidence , and advising people not to panic :mad:

TBH. Polticians need to keep out of banking. Look at the mess they make of GB PLC.
Like all companies banks need a kick up the backside to keep them in line from time to time.
But unlike most companies failing. A back takes down everyone who has money in them.

So I would not like to be in the goverment when they let a bank fail and Joe Public see how their hard earned cash is tied up for months while the FSCS get their head out of their backsides and start refunding people.....
Not going to be pretty even if its a small player like Metro that went belly up.

innovate

How do you suggest we (the UK taxpayers) would fund more bank failures? It's not as if we aren't already 'overdrawn' to the hilt. If you want to bancrupt the entire UK, letting the bankers run a bit more riot is a sure-fire plan to achieve that sooner rather than later.

abinanthanb

ses6jwg wrote: »

To be honest I have done probably over 100 switches in my 3 years in working for a high street bank and I could quite honestly count on one hand the number of times something has gone wrong!

As long as:

1) You keep money in both accounts whilst the switch is taking place
and
2) Don't rush into closing your old account
and
3) Re-arrange your credits in a timely manner

Then there is very very little to go wrong.

If you can't be bothered to provide your employer with a new account number for your salary then one would question the reason for you wanting to switch banks in the first place!

It's a big fuss over nothing. You walk into your new bank of choice, you sign a few forms, your old bank can even re-direct your credits for you now if you ask nicely!

It's all a big fuss over nothing!

Making it easier won't make any difference because the fact of the matter is people simply don't care.

Every day I get people sat in front of me who can make themselves £600 a year better off by switching banks and they simply do not care.

If everything has to be done by the customer, then what exactly your bank did as part of the switching? :rotfl:

ses6jwg

abinanthanb wrote: »

If everything has to be done by the customer, then what exactly your bank did as part of the switching? :rotfl:

what do you mean "everything"?

All the mandates are moved by the bank.

dalesrider

innovate wrote: »

How do you suggest we (the UK taxpayers) would fund more bank failures? It's not as if we aren't already 'overdrawn' to the hilt. If you want to bancrupt the entire UK, letting the bankers run a bit more riot is a sure-fire plan to achieve that sooner rather than later.

In pretty much the same way as RBS etc were delt with.
Except do not let another bank step in and try to resolve. Only to end up in the mire as well. Although lloyds I think were pulled in by G Brown in a hope that they would save the day....
But even lloyds realised it was a bad deal in the end... Which has cost them dear.

End of the day RBS deal will see a profit for GB.PLC. So it will payback everything it was lent to stave of closure. And clear some of the debt GB.PLC has.
Although no Gov will ever go bust... They just print more money.

End of the day. If they had let RBS fail. How much would have been paid out in compensation to customers.
How many companies would also have been put out of buisness.
How much would the Gov be paying out in increased payouts to families out of work.
Never mind the loss of trust in GB.

While I do not agree with bailouts at any cost. The net result of say RBS going titsup.com.
Does not bear thinking about.

I'm afraid that to let a bank go to the wall is a risk many in power dare not let happen.
Mr Osborne is mearly spouting what the public thinks it wants to hear, while dreading the thought of actually having to stand by his words.
I'm sure if Barclays went cap in hand tommorow. He would be 1st in line to keep them afloat.

innovate

Lehman Brothers wasn't rescued and the world didn't end.

It's by no means certain RBS will be able to return their debts.

Countries have gone bancrupt before, and there will be some again.

After the financial disasters in 2007/8/9, it's inconceivable that bankers could just continue to throw billions away and their mess will be picked up by taxpayers. I am absolutely with Osborne when he gives the BoE the powers to wind up a bank if it turns into a lunatic asylum.

pmduk

dalesrider wrote: »

Mr Osborne is mearly spouting what the public thinks it wants to hear, while dreading the thought of actually having to stand by his words

There's strange new concept there, a politician standing by his word? It'll never happen.

Alpine_Star

JuicyJesus wrote: »

It's just a solution in search of a problem. Portable account numbers would only help with regular credits coming in, which most people have one or two of and which are trivial to switch if you choose to change banks. The real problem is switching of debits, of which most people have about 10 or more of - and this problem has pretty much been solved.

There are a few other cases where portable account numbers would be useful, but they are edge cases, and not worth completely upending our account numbering system for. Especially not when the cheque clearing system would completely break down if a specific sort code didn't refer to a specific branch or bank.

Mainly people propose it because of that old chestnut of "we aren't getting the results we want" -> "we must do something" -> "portable account numbers are something". People aren't switching accounts not because it's a pain in the a*se, but because it's a pain in the a*se for very little real benefit, as personal current accounts are all pretty much the same price and the only real differentiation is service, which you won't know about until after you've switched anyway.

The idea of account portability was put to the Parliamentary Commission on Banking Standards by Donald Cruickshank, his idea being that if a bank made a complete balls-up of something on a Friday evening, it should be genuinely fearful that 20% of its customers would have migrated to a different bank by Monday morning and as such would revolutionise competition.

The 1 week scheme won't promote switching enough to make a difference as people still fear a period where there is a lack of certainty about which account money is being debited and credited from.

JuicyJesus

Alpine_Star wrote: »

The idea of account portability was put to the Parliamentary Commission on Banking Standards by Donald Cruickshank, his idea being that if a bank made a complete balls-up of something on a Friday evening, it should be genuinely fearful that 20% of its customers would have migrated to a different bank by Monday morning and as such would revolutionise competition.

And Donald Cruickshank is talking out of his 'arris. Sure, it would revolutionise competition - it would also, using his same example, make financial institutions remarkably susceptible to bank runs and general instability.

And if they'd made a complete balls-up of something on a Friday evening, along the lines of the RBS Group catastrophe last year, how exactly are people going to switch their accounts that same day anyway?

It is also still not enough of a benefit to justify porking our entire account numbering system. People do not switch banks that often, and I am certain it's not non-portable account numbers that stop them.

The 1 week scheme won't promote switching enough to make a difference as people still fear a period where there is a lack of certainty about which account money is being debited and credited from.

There's never been a lack of certainty the few times I've used the auto-switching service (personally I prefer to ring around myself, takes about half an hour tops, or doing it online, and then it's all sorted and you know for certain what's going on). The new bank sends out a letter saying "your payments will be collected from this bank from xxxx", and you leave enough money in the old account to cover it just in case. Simple.

It's not ideal having to leave money in the old account, but if you are going to insist on switching things a*se-backwards (still think it's absurd expecting the bank to chase up mandates for a system where the mandates are controlled by everyone except the bank, and then letting the bank take the blame if they go wrong) then that's the price you pay.

Consumerist

JuicyJesus wrote: »

It's not ideal having to leave money in the old account, but if you are going to insist on switching things a*se-backwards (still think it's absurd expecting the bank to chase up mandates for a system where the mandates are controlled by everyone except the bank, and then letting the bank take the blame if they go wrong) then that's the price you pay.

You're talking from the point of view that you have enough money to spread it between two accounts because you can't be sure, if only for a short period, which account will be called to pay.

I don't see that banks will need to "chase up" anything. If a call is made on a transferred DD, the old bank just passes it to the new bank for execution. I don't see that as being "a*se-backwards".