Do it yourself banking will only work if we can be bothered to do it

Can we?

Last week was a good one for British Banking, for both the industry and its customers. The first sale of shares in one of the part-nationalised banks – at a nominal profit, no less – marked an important first step on the road back to a healthy finance industry. At the same time the advent of the Current Account Switch Service represented a significant shift in the balance of power between retail banks and their customers. Over the next few years, we will see just how significant it is.

I say years, but it may well be longer. Research from the CEBR has predicted only a doubling of account switching frequency over ten years, which seems remarkably low, and is probably more credible, rather than less, for being commissioned by Metro, one of the key challenger banks that stand to benefit from the new service. The much-recited statistic about the average bank account lasting longer than the average marriage is no less odd than it is true, and the CEBR seem to believe that this old habit will die hard.

The truth, however, is that no-one yet knows what the impact will be. On the face of it, the new Current Account Switch Service ought to provide a huge opportunity for the challenger banks, but the established institutions will fight very hard to protect their turf. And, with the advantages of established brand networks, huge marketing budgets and massive reserves of customer data, there’s no doubt that they begin with the upper hand.

Those advantages, however, may not be as robust as they might appear. A ranking of UK banks’ customer service (admittedly assessed alongside the somewhat subjective categories of "honesty" and "integrity") released to coincide with the launch of the Current Account Switch Service, gave a damning verdict on all four of the UK’s biggest retail banks. The same customer satisfaction survey showed a very wide spread of standards as well, with marks ranging from four out of a hundred for one institution, to 89 for another, so this malaise does not affect every company in the industry.

While it may be that the smaller players, the mutuals and the challengers simply have to try harder to counter the incumbent advantages of the big four, the Account Switch Service could mean that their effort translates into growing market share for some of the industry’s smaller players.

In the long term, of course, the Current Account Switch Service will mean that all banks will need to become more customer-centric. That is the inevitable effect of pro-competitive regulation in any industry, and the voice of the customer is likely to have a great deal more influence upon the way that banks will run. The onus will then fall on us, the consumer, to make sure that we communicate clearly with our banks – by taking our custom elsewhere if necessary.

If the Current Account Switch Service works as intended, then dissatisfied customers will simply be able seek better service elsewhere, without any great inconvenience. Poor customer service and other questionable practices may persist, and the institutions that provide them may endure. If they do, however, it will be clear that UK consumers simply have other priorities. Either way, it will show the true colours of what really matters to banking customers in the UK.

For the sake of the economy, and our wellbeing, we can only hope that that is a sensible balance of good value and good service. Those few banks with high customer satisfaction scores do offer something along those lines, and the technology and business know-how needed to do so already exists in most institutions – what will hopefully change is the influence it exerts within them. If the British public do not use their new-found consumer power, then we will have missed a golden opportunity to build a banking industry more in the image of the one we’d all prefer to deal with. After the events of 2008, it was clear that we needed to reform the UK’s retail finance industry. Now that the economy is getting back to its feet, we all have the opportunity help do that.

Photograph: Getty Images

Claire Richardson is VP at Verint

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Hannan Fodder: This week, Daniel Hannan gets his excuses in early

I didn't do it. 

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“Why Brexit should work out for everyone”

And yesterday, there was his column on Conservative Home:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Or, to put it more concisely, courtesy of Buzzfeed’s Marie Le Conte:

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

If there any rhetorical technique more skin-crawlingly horrible, than, “Your response to my behaviour justifies my behaviour”?

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.