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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 13th Sep 12, 8:11 AM
    • 2,324Posts
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    Former MSE Helen
    MSE News: Public 'backs portable bank account numbers'
    • #1
    • 13th Sep 12, 8:11 AM
    MSE News: Public 'backs portable bank account numbers' 13th Sep 12 at 8:11 AM
    "Consumers would be more likely to switch their bank account if they could keep their account number, says Which? ..."

Page 1
    • agrinnall
    • By agrinnall 13th Sep 12, 8:47 AM
    • 22,627 Posts
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    agrinnall
    • #2
    • 13th Sep 12, 8:47 AM
    • #2
    • 13th Sep 12, 8:47 AM
    But would the public back the large cost that they will have to pay in order for the banks to change all of their systems to allow this to happen?
    • InsideInsurance
    • By InsideInsurance 13th Sep 12, 10:00 AM
    • 22,215 Posts
    • 11,383 Thanks
    InsideInsurance
    • #3
    • 13th Sep 12, 10:00 AM
    • #3
    • 13th Sep 12, 10:00 AM
    Whilst the headline was about portable bank account numbers what the article went on to say was actually not having to move/ update direct debits etc.

    This therefore is potentially therefore much more than just meaning you keep the same 8 digit account number.

    As has been said, to allow it to happen there is going to be a big fundamental change in how banking works, sort codes could no longer identify banks etc, and therefore with it a massive cost.

    Given this gives no competitive advantage to any one bank its going to be very hard to get the industry as a whole to move and spend such a vast sum of money in a coordinated way.

    Look at Faster Payments, suggested as required in 1998, greed in 2005 and partially implemented May 2008 and by October 2009 - 11 years later - only 45% of standing orders were using it.
  • tagq2
    • #4
    • 13th Sep 12, 10:08 AM
    • #4
    • 13th Sep 12, 10:08 AM
    A single interbank database mapping virtual to real #s, mostly read-only? I'm sure if the banks were designing DNS, they'd argue that they need a billion pound subsidy to implement CNAMEs too.

    I guess if you really wanted to commercialise it, you'd start with a group of portable sort codes and charge people to migrate once to it in return for the promise that it will be available for x years, renewable. Just as anyone with sense rents a domain name so they're not tied to their ISP or GFail or whatever, even if e-mail is simply forwarded to an ISP/webmail account.
    • Pincher
    • By Pincher 13th Sep 12, 10:19 AM
    • 6,516 Posts
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    Pincher
    • #5
    • 13th Sep 12, 10:19 AM
    • #5
    • 13th Sep 12, 10:19 AM
    BACS, Bank Automated Clearing System will need to maintain a mapping system, so you just apply to change your physical bank details and use your portable number. It does mean changing every standing order and direct debit you have, as well as informing anyone who wants to send money to you.

    If somebody manages to hack into this mapping, they can divert money into their own account. In one night, millions could be transferred into one account, which will be wired overseas the next morning.

    Even if BACS sends out advisory e-mails for every change of mapping, if this was done at 16:50, it is unlikely people will see it until the next day, by which time the money has already gone.

    With the current system, the destination is hardcoded, and is much harder to hack en masse.
  • tagq2
    • #6
    • 13th Sep 12, 11:01 AM
    • #6
    • 13th Sep 12, 11:01 AM
    I assume the priority would be for consumer DDs+SOs, so the mapping is concerning (typically) *source* of funds rather than destination.

    I understand the concern of say, a virtual account receiving A Lot Of money on a daily basis having its destination changed, but that's a different market segment. It certainly shouldn't admit an instant, fully automatic mapping update any more than the bank would allow an instant electronic change of business name and address details. It might not even be appropriate at all to have large businesses hold virtual accounts.

    Any mapping changes might, I suppose, be initiated by new bank with customer consent confirmed from old bank also. The customer is supplied a definite date on which money comes from new rather than old account. This isn't zero admin, but may be better than the current system of requesting your new bank update each DD and SO and at least one DD inevitably failing - probably an important one affecting e.g. insurance cover.
  • martinaj
    • #7
    • 13th Sep 12, 12:01 PM
    Portable account numbers - why?
    • #7
    • 13th Sep 12, 12:01 PM
    For everyone to have their own portable account number will require a fundamental change and will involve tremendous cost. Who will pay? "If it ain't broke, why mend it?"

    If people want to change banks it's easy, with guaranteed service levels regarding moving DDs and SOs and issue of cheque books and cards.

    Besides, I have accounts and credit/debit cards with more than one bank. I use a "Money" program to keep track of all my accounts and with online banking I can check my balances each day and move money where it gets best interest. I know when to "ditch and switch".

    I don't need a portable account number and I certainly don't want to pay for one!
  • jamesd
    • #8
    • 13th Sep 12, 2:52 PM
    • #8
    • 13th Sep 12, 2:52 PM
    At the moment the interface to change DD or SO is in the wrong place. It should be at the place where the DD or SO is currently held, with an instruction to switch there, combined with a consent choice at the receiving account. Want to move:

    1. Tell the current bank to move the DD to the new one.
    2. At the new one confirm that you've made this request and want it to go ahead.
    3. New bank tells DD originator to change the DD and the current bank to forward this DD payment request to it from now on, perhaps with a one day delay.

    Similar for SO but step 3 becomes the current one stops paying, the new one starts.

    Those are the source of funds side, at the recipient usually company side there are forwarding issues for payments made using old details which could generate a "please update the details you use" notification to the originator.

    Moving DDs isn't always about moving banks, it's sometimes just about which account you want the money to come from.
    • Chrisblue1962
    • By Chrisblue1962 13th Sep 12, 4:00 PM
    • 1,148 Posts
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    Chrisblue1962
    • #9
    • 13th Sep 12, 4:00 PM
    • #9
    • 13th Sep 12, 4:00 PM
    To me this would be a pointless costly exercise.

    It's not rocket science to change your bank account.
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    • rogerblack
    • By rogerblack 13th Sep 12, 4:25 PM
    • 9,273 Posts
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    rogerblack
    I wish that there was a standard way for programs to talk to banks.
    This would allow the creation of apps that enabled simply moving money between your accounts, and monitoring balance.

    Rather than seperate non-integrated apps.
    • alanq
    • By alanq 13th Sep 12, 4:35 PM
    • 4,152 Posts
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    alanq
    There is more than enough scope for foul ups at present. I see the potential for far worse with this proposal. Is there any country in the world that is successfully operating such a system?
    • JuicyJesus
    • By JuicyJesus 13th Sep 12, 4:40 PM
    • 3,478 Posts
    • 3,937 Thanks
    JuicyJesus
    At the moment the interface to change DD or SO is in the wrong place. It should be at the place where the DD or SO is currently held, with an instruction to switch there, combined with a consent choice at the receiving account. Want to move:

    1. Tell the current bank to move the DD to the new one.
    2. At the new one confirm that you've made this request and want it to go ahead.
    3. New bank tells DD originator to change the DD and the current bank to forward this DD payment request to it from now on, perhaps with a one day delay.
    Originally posted by jamesd
    What you have just described is the Direct Debit switching system, only with the first and second steps reversed.

    1. You tell new bank to switch Direct Debits to them.
    2. They tell old bank to move Direct Debits to new one.
    3. New bank tells originator to change Direct Debits.

    This does, true, only apply for Direct Debits switched en-masse. But that's because for single DDs there's absolutely no benefit in switching through the bank and a lot of potential issues. Far better to inform the originator (who are, after all, the ones requesting payments) and have surety of the switching date and a known organisation to b*llock if it goes wrong than involve two separate banks AND the originator.

    The same goes for portable account numbers. They are a solution in search of a problem, and a "solution" that comes with numerous other demerits; moreover, one proposed by idiots who don't think things through other than to think that "if thick people want it it will make banking better".

    The situation Pincher mentioned with a single account suddenly being the receiving point for a large number of other account numbers and then used for massive muling of fraudulent money is an example of exactly why this is an utterly moronic idea. Money laundering is another consideration. Consumer confusion is yet another ("Which bank's your account with?" "NatWest" "But it has a Barclays sort code...").

    Not enough? Well, the necessity of recoding pretty much the entire cheque clearing (inasmuch as that is still relevant), BACS and Direct Debit systems to handle the fact that sort codes now no longer refer to specific banks but could in fact refer to a completely different branch of a totally separate bank at the other end of the country is YET ANOTHER consequence of this (oh, this cheque with a 40 sort code needs to be returned? Good luck returning it to HSBC when actually it's from Lloyds...)

    There's also the fact that Direct Debits and standing orders can already be switched automatically, so really this is only an issue regarding credits inwards, and with most people only receiving credits from one or two organisations at once you'd basically be b*llocksing up the UK's entire banking infrastructure, incurring massive costs on the part of virtually any organisation with any interaction with the UK clearing and BACS systems, and opening people up to insane amounts of fraudulent activity, in order to save incredibly lazy people from having to make one or two telephone calls.

    Basically, it's a fraudster's wet dream and it will do nobody any good whatsoever. The good news is that while cheques exist it's a near-absolute impossibility for very solid, immovable operational reasons. So we now have a good reason for cheques to continue to exist...

    It's also, having now actually read the article, not in the least bit similar to the process of switching mobile numbers. There's no operational reason why a mobile number can't be switched to route to another network; LOTS of operational reasons why a sort code and account number can't be switched to route to another bank.
    Last edited by JuicyJesus; 13-09-2012 at 4:43 PM.
    urs sinserly,
    ~~joosy jeezus~~
    • fiesta04
    • By fiesta04 13th Sep 12, 4:57 PM
    • 486 Posts
    • 292 Thanks
    fiesta04
    The way forward is simple:-

    Merge all banks, use NI numbers as account numbers so therefore no sort codes.

    Then the Government will be able to STEAL our money to pay off the debts.

    I wonder how quick I can empty all my account?????

    F4
    • anniecave
    • By anniecave 13th Sep 12, 7:49 PM
    • 2,271 Posts
    • 738 Thanks
    anniecave
    I also can't see the point of this suggestion. If you want to change your bank account, it's not that difficult. Lots of people do it all the time.

    My main reason for not having switched in the last few years is that the length of time of having a current account is a factor in credit scoring, and I don't want to reduce my credit score unless there's a clear benefit for me in it.

    As a poster above put, if the current system isn't broken, why try to fix it?
    Indecision is the key to flexibility.
  • jamesd
    What you have just described is the Direct Debit switching system, only with the first and second steps reversed.

    1. You tell new bank to switch Direct Debits to them.
    2. They tell old bank to move Direct Debits to new one.
    3. New bank tells originator to change Direct Debits.

    This does, true, only apply for Direct Debits switched en-masse. But that's because for single DDs there's absolutely no benefit in switching through the bank and a lot of potential issues.
    Originally posted by JuicyJesus
    That's not a system I'd be keen to use. I want control at the initial bank and without the chance of confusing just which DDs should be moved and which shouldn't. The first bank knows all of them including those that may be paying the same place at different times of for different things.

    That bulk switching is part of the current broken model of one bank account only so you depend for everything on just one bank. There's no reason for consumers to accept that these days.

    There's also the fact that Direct Debits and standing orders can already be switched automatically
    Originally posted by JuicyJesus
    If they can be I've seen no sign of any of the three banks I have current accounts with making it available to me to use

    It's also, having now actually read the article, not in the least bit similar to the process of switching mobile numbers. There's no operational reason why a mobile number can't be switched to route to another network; LOTS of operational reasons why a sort code and account number can't be switched to route to another bank.
    Originally posted by JuicyJesus
    The mobile numbers have the same issues, dialing prefixes which identify a particular network. They just have a better infrastructure in place and are accustomed to dealing with things live.
    • JuicyJesus
    • By JuicyJesus 13th Sep 12, 9:01 PM
    • 3,478 Posts
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    JuicyJesus
    The mobile numbers have the same issues, dialing prefixes which identify a particular network. They just have a better infrastructure in place and are accustomed to dealing with things live.
    Originally posted by jamesd
    It's not so much that. Dialing prefixes on mobiles are meaningless - certain ranges do "belong" to certain operators, but if you switch an O2 number to a Vodafone number it causes no operational issues for either them or anyone calling that number. Meanwhile, moving an HSBC account number to Barclays causes numerous operational issues at both ends, because sort code ranges definitely do belong to certain banks by design, and all sorts of processes would have to be redesigned from the ground up to accommodate the fact that a 20-xx-xx sort code account could NOT be a Barclays account, but in fact could be any other bank in the UK. Cheque clearing, Direct Debit set-up and BACS, as three examples.

    And you still haven't explained what benefits there'd be to portable account numbers, or how those benefits would even slightly outweigh the massive drawbacks I outlined

    If they can be I've seen no sign of any of the three banks I have current accounts with making it available to me to use
    If you wish to switch some or all of your Direct Debits to an account with one bank from another one, ask them for a form and they can do so through the automated service (although some will now only switch all, mainly because switching some is a pain in the neck for them as there are far more points of failure which they tend to end up getting the blame for, even when it isn't their fault (which most of the time it isn't).) But the point remains that if you're just switching one or two, it makes far more sense to handle that yourself by calling the originator(s) - bringing the number of companies potentially at fault for ignoring your instructions down from three to one.

    And, bringing this back on topic, portable account numbers wouldn't help bring about the service you ask for anyway.

    That bulk switching is part of the current broken model of one bank account only so you depend for everything on just one bank. There's no reason for consumers to accept that these days.
    This will be a controversial sentiment, but a lot of people can barely manage having one bank account with a few DDs coming out of it, let alone more than one with DDs coming out of each. Banks also have precisely zero incentive to encourage people having multiple current accounts, for all sorts of different reasons.

    Those who wish to have multiple current accounts can do so, but those people probably care enough about having control over their accounts that they'd be happy to manage DD switching themselves.
    Last edited by JuicyJesus; 13-09-2012 at 9:24 PM.
    urs sinserly,
    ~~joosy jeezus~~
    • The pc tech
    • By The pc tech 13th Sep 12, 11:18 PM
    • 405 Posts
    • 239 Thanks
    The pc tech
    This seems like a completely barmy idea.

    The sort code identifies the receiving financial institution and then the account number is used by that institution to identify the customer's account so if both were portable it could cause masses of problems.

    1. Imagine how hard it could be to recover a payment thats gone astray due to incorrect data being held in a copy of the database.
    2. Assuming a central control and lookup system is employed run by say, UK payments the central server cluster hosting such information is going to be one hell of a target for hackers as has been pointed out, unless of course it's completely separate from the Internet on a private backbone.
    Interests: PCs. servers, networks, mobiles and music (esp. trance)
  • tagq2
    Far better to inform the originator (who are, after all, the ones requesting payments) and have surety of the switching date and a known organisation to b*llock if it goes wrong than involve two separate banks AND the originator.
    Originally posted by JuicyJesus
    Indeed. But 1) many people have more interesting things to do than making up to a dozen telephone calls and then several more to chase up the mistakes; 2) changing information may cause a delay with payment and that may in turn affect service, so you have to time the change correctly. Otherwise you risk late debt repayments or gaps in insurance coverage. For the person not interested in the banking system - i.e. the average person - it's just too much hassle.

    one proposed by idiots who don't think things through other than to think that "if thick people want it it will make banking better".
    I would never deny being an idiot, but I certainly think things though ;-).

    The situation Pincher mentioned with a single account suddenly being the receiving point for a large number of other account numbers
    Why would the system allow that?

    Consumer confusion is yet another ("Which bank's your account with?" "NatWest" "But it has a Barclays sort code...").
    I answer an 0207 number even though I'm usually nowhere near London; gone are the days where I could tell what mobile provider someone was with; the IP address I present to the world only occasionally reflects where I am; and these days almost all my bank accounts have a sort code which returns a central customer service address.

    Not enough? Well, the necessity of recoding pretty much the entire cheque clearing (inasmuch as that is still relevant), BACS and Direct Debit systems
    Why? Cheques would surely still have the destination non-virtual account numbers printed on them. BACS/DD simply need a lookup usually on source.

    (oh, this cheque with a 40 sort code needs to be returned? Good luck returning it to HSBC when actually it's from Lloyds...)
    Even if you did use virtual account numbers on cheques (which you wouldn't), the lookup would be just as automated, but take account of account number too. It's not like anyone really looks at cheques when they're cleared any more.

    you'd basically be b*llocksing up the UK's entire banking infrastructure, incurring massive costs on the part of virtually any organisation with any interaction with the UK clearing and BACS systems,
    Non-banks would have to do nothing at all. There could just be a new set of sort codes which refer to a virtual bank.

    In principle, it's like having a new account with a bank which automatically forwards money to/from the real account. A prototype could perhaps be knocked up in a few days using an enterprise-level account which provides a decent API, where the transparent mapping is simulated via a single direct debit set up between the real and prototype-"virtual" accounts.

    in order to save incredibly lazy people from having to make one or two telephone calls.
    One or two? I'm glad your household has so few outgoings :-).

    the central server cluster hosting such information is going to be one hell of a target for hackers as has been pointed out, unless of course it's completely separate from the Internet on a private backbone.
    by The pc tech
    If you have write access to the Bacs servers, you already have enough opportunities to cause mischief.
    • alanq
    • By alanq 14th Sep 12, 1:30 AM
    • 4,152 Posts
    • 2,730 Thanks
    alanq
    There is already supposed to be a system for dealing with migrating direct debits. However there is no automatic system for simply changing the bank account details for all incoming payments. I don't suppose it would be that difficult to implement, for those people who want/need it, to have a dummy bank account that all incoming payments are directed to that then automatically redirects them to ones specified active account of the moment. The institution providing the dummy account would need a fee to pay for the service as funds would never be in the account long enough for the institution to benefit from them. I doubt that there would be much demand for such a service.
    • antrobus
    • By antrobus 14th Sep 12, 6:54 AM
    • 16,660 Posts
    • 23,594 Thanks
    antrobus
    Which? says portable account numbers may also reduce the chances of taxpayers having to bail out banks, as the regulator could shut down a failing bank and transfer personal and business accounts to another outfit.
    Clear evidence that Which? is staffed by idiots who don't understand banking. The 'personal and business accounts' of any bank are liabilities; no other bank is going to accept the transfer of those liabilities without an equivalent transfer of matching assets, loans, gilts whatever. Which is what banks are really interested in because that's what generates their income.
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