A two-year investigation by the Competitions and Markets Authority (CMA) into rip-off practices has found something rotten at the heart of the British banking industry. Lack of consumer choice and control over our accounts, exorbitant charges and pushy sales tactics have all come in for approbation.
The CMA’s recommendations – designed to put power back into the hands of the consumer – include this revolutionary plan to force all financial institutions to give their customers access to the same services on their smartphones as they might expect in a High Street branch. So-called “open banking” is not the answer, I am afraid.
I’m no technophobe. Indeed, I was one of the first customers of First Direct, the Leeds-based bank which pioneered telephone and then internet banking. I’ve been running my account online for years now. However, I can’t say this would work for everyone. My mother, for example, who can’t even send a text. The thought of transferring money from one account to another online terrifies her. She simply wouldn’t do it.
A good bank should be able to serve and respond to the needs of all its customers. The danger with this CMA edict is that the industry will be compelled to make changes and will have to find a way of paying for them.
If the job cuts and branch closures we have seen in the past five or six years are anything to go by, I think we can see where these savings will come from – by cutting the services which customers have come to rely on.
I know that everything must move forward. When it comes to money though, we need security and reliability. We also need convenience. What happens when a branch closes? People have to travel, sometimes great distances, in order to perform even the simplest transactions. I can see that the counter-argument to this is to give the power to the people on their mobile phones.
The problem is that this risks ostracising those who don’t have access to such technology, or simply don’t trust it.
This brings us onto a major issue – security. How many times have we heard of a financial institution jeopardising the confidential personal and financial details of its customers through a breach caused by technology? It’s estimated that at least one in four UK adults has been a victim of financial fraud committed online. Are we really walking blindly into the lion’s den of hacked accounts, stolen passwords and untold stress and anxiety?
How can we be convinced that the banks have got their systems so watertight that this will not keep happening? If mobile banking is expanded so quickly – the CMA recommends that customers should be able to access all their banking through one single app by 2018 – how can we be convinced that they have everything locked down and watertight?
And this is not to mention the unreliability of smartphones per se. I don’t know about you, but in our house we’ve got four – and there is always one that isn’t working properly. Whether it won’t charge, or the “data bundle” has run out, or the internet won’t pick up, I could list a hundred ways in which a mobile phone can fail. Why would anyone want to put their trust in a few square inches of technology which seems determined to befuddle and break down?
I’d much rather put my trust in a real, live human being I could talk to without pressing a button. I was reminded of this when I accompanied my partner to his bank recently to set up a new account. It’s NatWest, for the record. The town centre branch in Barnsley has recently been upgraded and, in my view, it’s a blueprint for how banking should be in the 21st century.
There is a row of machines for paying in, paying out, checking balances and so on. There are helpful counter staff who approach you and make you feel welcome, with no hard-sell. There are also bank managers who you can – believe it or not – book an appointment with and sit down and talk to.
On this occasion, we met a very helpful chap who was probably young enough to be our son, but he took us through the process with politeness and authority. In a world where a remote algorithm can make or break your ability to secure a mortgage without even speaking to you, it felt like we were making an ally for life. When was the last time you went anywhere and experienced that?
This level of service is backed up by internet banking and a smartphone app if you so wish. As yet, there is no compunction to take either. And that’s the way it should stay.