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

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.