Wednesday, 23 October 2013

Switching bank accounts,19/09/13

Switching our current accounts has become easier, and according to the government, this is good news, as there will be more competition on the high street. Within seven days, apparently, the switch can be completed, all standing orders and direct debits sorted, and everyone better off. Haven`t we heard that before? We only have to look at the energy companies to realise that "more" does not mean "better" deals for the consumers.
The big four, Lloyds Banking Group, RBS, HSBC and Barclays, hold 75% of our current accounts, and as we know their important role in bringing about the 2007-8 crash, and the subsequent economic mess, it`s a chance for us, the taxpayer and customer, to show our disapproval. More good news is that the so-called challenger banks, the likes of Santander, Halifax and Marks and Spencer, are making special offers to entice us, because they know once we`ve signed up, the chances of us switching again are slight; after all, haven`t we been with our present bank for years, perhaps since our student days, or since our parents recommended theirs?
           We may as well make the switch,if only to make a point, but you can bet all is not as it seems; we are talking about banks, after all.How many people are attracted by better than average savings rates, only to find this includes a "bonus" rate, which soon disappears once they`ve got our hard- earned cash? The chances of us, the plebs, getting similar treartment with these deals are high. The most ethical of the banks is, apparently. the Co-operative Bank, but sadly,recent news of this bank`s troubles will not act as an incentive, despite assurances that current accounts are absolutely safe.
           Transparency is not the banks` strongest point either; how many Lloyds customers might feel attracted by the deal at Halifax, but not realise that the latter is owned by the former! The Post Office has incentives, but how many of its new customers will realise that its owners are the Bank of Ireland?
            Of course, the banks make their biggest profits from the "socially useless" activities by their investment sectors, but that doesn`t mean profits are not also their main motive with our current accounts; whatever money we give them , they will invest or lend out at a huge profit, and that`s the point, No matter how many banks are on the high street, their sole purpose is to make a profit out of us, their customers.The hundreds of thousands the banks have spent on advertising their new "products"indicate how much money they expect to make.The big 4 can become the big 8 or 10 but as long as they are privately owned, by shareholders expecting dividends, and run by individuals who know the size of their bonus depends on the profits they can screw out of us, the banking culture will remain unchanged, and the unadulterated greed will still be prevalent. Will the Bank of Ireland, or Tesco, or Virgin, or whatever bank really offer customers better deals, higher savings rates, more loans to small businesses, cheaper mortgages to first-time buyers, all in order to kickstart the economy? Of course not, the needs of the shareholders will take priority.
            It`s probably still worth giving a switch a go; these newer and smaller banks weren`t the ones mis-selling insurance policies, money-laundering drug dealers` wealth in Mexico, or fixing the Libor rates, so, at worst, it`s a protest, and there may be some cash benefit in it. However, only a state-owned bank, one whose primary objective is not the shareholders` dividend, the avoidance and evasion of as much tax as possible, nor the investment banker`s bonus, can act as a realistic "challenger", and can attract sufficient customers away from the mainstream ones. Labour should be doing everything in its power to delay the privatisation of RBS;  the myth that more privately-owned banks on the high street, offering more current accounts, will make a difference needs to be exposed.

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