Trust in banking is consistently low, complaints about customer service are a matter of course and most people are so jaded by their lack of choice that they’d sooner get divorced than switch bank accounts.
The City regulator today attempted to address the lack of transparency on a bank’s customer service record and overall standard of performance – two factors that if known, might help boost competition and standards. It has published proposals to make comparisons of these considerations, not just price, available for the first time.
10 years on from the financial crisis that brought trust in banks to the floor, the FCA proposes to require firms who offer personal current accounts and business current accounts to publish service information about:
· how long it takes to open an account and have features of the account working, including overdraft facilities
· how long it takes to replace a lost, stolen or stopped debit card
· how long it takes to give someone access to a personal current account under a power of attorney
· how and when customers can carry out various transactions, including making payments or cancelling a cheque, and whether 24-hour help is available, and
· the number and type of major operational or security incidents.
“It’s vital that consumers have access to useful information that helps them make informed choices about which bank to move to.”
The regulator said this information would make it “easy for consumers to access and compare”. It will also be available for use by comparison services and others. In turn, the FCA expects to drive increased competition between firms to offer improvements in service quality.
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The consultation represents one strand of a broader programme of work looking at retail banking which includes action on five recommendations made to the FCA by the Competition and Markets Authority in its 2016 market investigation report into retail banking, including operational performance metrics – the subject of this consultation.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: “Customers tell us they think “all banks are the same” and so they are discouraged from looking for current accounts offering better performance. We know from our consumer research and the CMA’s report that consumers and small businesses are really interested to know about the service their bank or building society offers compared to other firms.”
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“These proposals represent a step forward, making it easier for consumers to judge whether their bank is offering good service and for firms to see if they are competing effectively against other providers.”
Gareth Shaw, Which? money expert, said: “It’s vital that consumers have access to useful information that helps them make informed choices about which bank to move to. However, many customers that would benefit the most from switching banks, such as those who regularly rely on overdrafts, don’t switch. This is why we are calling on the Financial Conduct Authority to use its review to end excessive changes for unarranged overdrafts.”
Mike Fotis, founder of Smart Money People, said: “Data that helps to make consumers more savvy and forces firms to up their game is a positive step. The data around business banking in particular will be fascinating given the atrocious levels of service many SMEs have come to expect. But making this data user friendly enough to encourage consumers to engage will once again be the biggest challenge.”
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