Consumers gathered in London last night to share their views on banking issues – such as switching current accounts and competition – at an event hosted by with Which? and the Independent Commission on Banking (ICB).
The Your Voice for Better Banking event, hosted by the BBC’s Paul Lewis, gave consumers the opportunity to examine the current banking system, and what could be improved.
The speakers set the tone of the event by analysing the issues consumers have faced since the banking crisis. Peter Vicary-Smith, chief executive of Which? pointed out that the market-leading banks often offer the worst value products, showing that there is a serious lack of competition in the market.
Sir John Vickers, ICB chairman, talked about the importance of a ‘firewall’ to separate the banks riskier global investment business from the day-to-day consumer facing retail banking.
Switching – better the devil you know
One of the key messages that came out of the debate was that banks need to make it much easier for customers to switch, not just with incentives and portable bank account numbers, but with a real commitment to customer service.
Many attendees admitted that the reason they didn’t switch account was that they feared they would get worse service from their new bank.
Neville Richardson, chief executive of Co-operative financial services, pointed out that although more people are switching bank accounts, the numbers are still far too low. In an ideal market, consumers should feel comfortable with switching regularly so banks will have to work much harder to keep their custom.
Competition – are any banks better?
Many voiced their concerns that banks were all the same. In a market where there is little to distinguish the big players, how can a customer choose the best place to put their money?
This became especially clear in discussions of overdraft charges and overseas withdrawal fees. If most of the banks charge a large amount for both of these things, then the customer has little choice but to pay the fees – there is nowhere to switch to when all the banks offer the same poor choice.
What happens next?
All feedback captured on the night, via our video booths and on Which? Conversation will be fed back to the ICB to influence their final report. The report will be published in September, and will make recommendations to the government on how to avoid a future financial crisis.
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