Consumer champion calls for reforms at bank branch level in the UK

News - Banking

Written by Ray Clancy

The UK Banking Commission must push for root to branch reforms and not fudge the serious failings that the global economic crisis revealed, consumer champions warn.

‘Banks must be allowed to fail without bringing down the rest of the economy and we must never again be faced with a situation where consumers pay the price for the failures of the banking system,’ said Which? chief executive, Peter Vicary-Smith.

‘The financial crisis highlighted serious failings in our banking system and we need root to branch reforms to prevent it from happening again in the future. Competition on the high street is at an all time low, with the three biggest retail banking groups consisting of two that would have collapsed without taxpayer support and one that has a woeful record on customer services. This is not the template for a market that works well for consumers,’ he explained.

‘When the Government sells off its stakes in the bailed out banks it must ensure that the public interest is served and competition is increased, instead of shifting retail branches from one big bank to another, as we saw with the sale of RBS branches to Santander,’ he added.

The consumer organisation also revealed that banks offering a raw deal to customers without internet access. The four million Britons who don’t have internet access are missing out on the best rates for financial products, according to an investigation by Which?

It found that an online saver could be 37% better off over a year compared with a branch only saver. The average rate for instant access savings accounts available in branch is just 0.56%, half of that available to online savers, with fixe -rate savings accounts, current accounts and cash ISAs also offering better rates for online savers.

It also found a staggering 355% difference between the best online deal for travel insurance and the best in branch deal.

‘Not everyone is comfortable or able to manage their finances online and these people are missing out on the best deals as a result. Banks should be more inclusive by offering terminals in branches where customers could access online deals, with some help from staff,’ said Vicary-Smith.