Nationwide Fairer Share Payment 2024

[Deleted User]

Well I am quite happy with my £100. I have been with NW for years and would never contemplate switching from them. A lot of the moans on here are from people who play the system with their constant switching of accounts and transferring money here there and everywhere.

Personally, I would like to see the end of all the switching deals, the cost of which has to be borne ultimately by the customer.

Before anyone counters by saying I must be financially well off and do not need to switch, I actually don’t have that much money. I have enough to pay my bills and to put something by each month. For me it is about the quality of life not maximising financial gain.

TheBanker

[Deleted User] said:

Well I am quite happy with my £100. I have been with NW for years and would never contemplate switching from them. A lot of the moans on here are from people who play the system with their constant switching of accounts and transferring money here there and everywhere.

Personally, I would like to see the end of all the switching deals, the cost of which has to be borne ultimately by the customer.

Before anyone counters by saying I must be financially well off and do not need to switch, I actually don’t have that much money. I have enough to pay my bills and to put something by each month. For me it is about the quality of life not maximising financial gain.

With the exception of Nationwide the cost of switching deals is bourne by the bank's shareholders, not their customers. The banks must believe there is a net benefit to these deals in terms of attracting new customers - whilst a lot of people do engage in the merry-go-round of switching, I think the vast majority of switchers genuinly want to move their banking and will stick with the new bank and may take additional products too.

I worked for a bank that did switching deals for a while. There was a marketing budget that funded advertising, promotional mailings etc as well as the switching incentives. If the bank wasn't paying customers directly, they would probably have spent more on advertising instead. The product department had overall targets i.e. attract xx new customers, attract xx in new deposits, generate £xx through fee paying accounts, but also targets to maintain the customer volumes (so they could not achieve their target if 1,000 new customers joined but 900 existing customers left, or if they attracted £500m of new savings balances but £450m of existing balances was withdrawn). 

Whilst Nationwide are able to badge 'fairer share' as a return of profit, it's basically the same thing. It's money they're spending on marketing to retain existing customers and attract new ones. It's not how I would have designed the scheme, but I expect they've researched and modelled a range of different options and decided this is the best one. It is certainly a point of difference compared to the banks.

WillPS

[Deleted User] said:

Well I am quite happy with my £100. I have been with NW for years and would never contemplate switching from them. A lot of the moans on here are from people who play the system with their constant switching of accounts and transferring money here there and everywhere.

Personally, I would like to see the end of all the switching deals, the cost of which has to be borne ultimately by the customer.

Before anyone counters by saying I must be financially well off and do not need to switch, I actually don’t have that much money. I have enough to pay my bills and to put something by each month. For me it is about the quality of life not maximising financial gain.

Would you also end all other marketing activity? It also costs tens/hundreds of millions of pounds, and if you weight it out over the amount of new business it inspires likely has a cost of way more than £200 per head.

You also don't need to switch your actual banking arrangements to benefit from switching bonuses, btw.

[Deleted User]

I believe most marketing activity makes little difference. It’s a bit like the emperors clothes scenario. I make my own mind up about things. I do not have to be led.

TheBanker

[Deleted User] said:

I believe most marketing activity makes little difference. It’s a bit like the emperors clothes scenario. I make my own mind up about things. I do not have to be led.

That may be the case for you, but marketing activity does make a big difference. Every company I have worked for, in banking and other sectors, has had a marketing department. Activity is tracked and almost without fail resulted in an increase in sales of whatever was being marketed. Some campaigns are more sucessful than others, but overall marketing makes a big difference to the sucess of a company.

I mean marketing in its broadest sense - not just putting adverts on TV/in newspapers, but being on cashback sites, having a PR team to get products featured in the media (and in the case of financial products, that includes trying to get them in the MSE emails), sponsoring events/sports teams to raise brand awareness, doing nice things for charity which also raise brand awareness and hopefully create a warm feeling... Paying people to have a bank account is just another strand, which directly helps to build customer numbers but also indirectly raises awareness of the brand, even among those who don't qualify for the offer or want to switch. 

flaneurs_lobster

TheBanker said:

[Deleted User] said:

I believe most marketing activity makes little difference. It’s a bit like the emperors clothes scenario. I make my own mind up about things. I do not have to be led.

That may be the case for you, but marketing activity does make a big difference. Every company I have worked for, in banking and other sectors, has had a marketing department. Activity is tracked and almost without fail resulted in an increase in sales of whatever was being marketed. Some campaigns are more sucessful than others, but overall marketing makes a big difference to the sucess of a company.

I mean marketing in its broadest sense - not just putting adverts on TV/in newspapers, but being on cashback sites, having a PR team to get products featured in the media (and in the case of financial products, that includes trying to get them in the MSE emails), sponsoring events/sports teams to raise brand awareness, doing nice things for charity which also raise brand awareness and hopefully create a warm feeling... Paying people to have a bank account is just another strand, which directly helps to build customer numbers but also indirectly raises awareness of the brand, even among those who don't qualify for the offer or want to switch. 

Most people, if asked, will say that advertising (by which they mean marketing) has no effect on on their spending decisions.

If marketing has no effect then why do companies (and other bodies) spend millions each year on this activity? They would not continue this spend if there was no tangible benefit.

But. of course, it only effects other people. 

smk77

Nationwide customer with a personal FlexPlus account opened in Feb 24 which means I qualify via that.

However, also got a joint flex account with my wife. Over £100k in transactions over the period. A couple of savings accounts and a mortgage customer for 19 years. Do not qualify. The reason, 2 of the 3 months didn't have more than 10 transactions.

Note to self. Pay in £1000 Jan, Feb, Mar 2025 and make 10x £100 transactions back into the funding account.

smk77

TheBanker said:

intalex said:

For me it is (rightly) not weighted on how profitable each customer is, but it certainly is biased on specific member usage activity.

It is almost entirely an incentive to take up and use one of their current accounts one way or another, even the current account switch offer is intertwined with this payout such that you get paid either to use existing current account or to switch in another active current account, not both.

Kind of like mobile operators (used to? still do?) fight hard to increase active subscribers first and foremost and then worry about how to stimulate revenues out of each one.

Why call it members' loyalty when it's literally just a current account users' loyalty? Feels wrong!

Even the discussion for this payout is in the MSE current account forum, not the savings account forum (despite the payout being allegedly taxable like savings interest).

I think they would argue that having an active current account demonstrates 'loyalty', whereas I imagine most customers with mortgages simply selected Nationwide because they had the best rate at the time and they're now on a fixed rate with ERCs. I imagine the same applies to a lot of savers, although there will be some savers who just stick with Nationwide out of inertia (is that another word for loyalty?), or for other reasons e.g. they want access through a local branch. 

For most people, having an active current account doesn't make the bank money. Salary goes in and most goes out the next day on bills. Surely, it's the saving and mortgages that make the profits?

boingy

smk77 said:

Note to self. Pay in £1000 Jan, Feb, Mar 2025 and make 10x £100 transactions back into the funding account.

After missing out on last year that's what I did this year, except only £600 in and two transactions out. All done with standing orders so zero effort once it was set up. I'll do the same next year as well but I'll probably increase the amount and the transaction count a little, just in case they tweak the criteria. Turns out I am now a valued current account customer ;p

WillPS

smk77 said:

TheBanker said:

intalex said:

For me it is (rightly) not weighted on how profitable each customer is, but it certainly is biased on specific member usage activity.

It is almost entirely an incentive to take up and use one of their current accounts one way or another, even the current account switch offer is intertwined with this payout such that you get paid either to use existing current account or to switch in another active current account, not both.

Kind of like mobile operators (used to? still do?) fight hard to increase active subscribers first and foremost and then worry about how to stimulate revenues out of each one.

Why call it members' loyalty when it's literally just a current account users' loyalty? Feels wrong!

Even the discussion for this payout is in the MSE current account forum, not the savings account forum (despite the payout being allegedly taxable like savings interest).

I think they would argue that having an active current account demonstrates 'loyalty', whereas I imagine most customers with mortgages simply selected Nationwide because they had the best rate at the time and they're now on a fixed rate with ERCs. I imagine the same applies to a lot of savers, although there will be some savers who just stick with Nationwide out of inertia (is that another word for loyalty?), or for other reasons e.g. they want access through a local branch. 

For most people, having an active current account doesn't make the bank money. Salary goes in and most goes out the next day on bills. Surely, it's the saving and mortgages that make the profits?

I think the theory is that one naturally leads to the other.

There must be something in it as it's the avenue through which half a dozen challengers have entered the market, and now Coventry are buying the Co-op Bank seemingly motivated by getting a foothold in this same market...