Current account providers may need to show service stats
The Financial Conduct Authority (FCA) is proposing that firms offering personal current accounts and business current accounts should publish service information in a bid to improve competition in the market.
It has called for the following to be included in information on websites:
- Account opening: clear information on the process and how long it takes to open an account, plus details of any overdraft facilities
- Replacement of cards: how long it takes to replace a lost, stolen or stopped debit card
- Power of Attorney: how long it takes to give someone access to a personal current account under a POA
- Service availability: how and when customers can carry out transactions, including making payments or cancelling a cheque, and whether 24-hour help is available
- Major incidents: the number and type of major operational or security incidents that have been reported to the FCA.
It says this information should be measured quarterly (beginning April 2018) with the publication of the April to June metrics in August 2018.
The FCA said its proposals on information would make it easy for consumers to access and compare various current accounts. It will also be available for use by comparison services and others.
However, the proposals only apply to larger providers, defined as firms with more than 70,000 personal current accounts and 15,000 business current accounts (per brand). As such, the FCA said it is aware that not requiring the smallest firms to provide service information and not applying rules to certain providers, including credit unions, “could potentially distort competition”. But smaller providers can choose to publish the data too.
Today’s consultation builds on recommendations from the Competition and Markets Authority (CMA) following its investigation of the retail banking market. It found there were barriers to accessing and assessing information about service quality, which contributed to low customer engagement in the current account market. It concluded customers may receive poor value by staying with products that are not best suited to their needs or with companies that do not provide quality service.
Dispelling the myth that ‘all banks are the same’
Christopher Woolard, executive director of strategy and competition at the FCA, said: “Customers tell us they think ‘all banks are the same’ and so they are discouraged from looking for current accounts offering better performance. We know from our consumer research and the CMA’s report that consumers and small businesses are really interested to know about the service their bank or building society offers compared to other firms.
“These proposals represent a step forward, making it easier for consumers to judge whether their bank is offering good service and for firms to see if they are competing effectively against other providers.”
Kevin Pratt, consumer affairs expert at MoneySuperMarket said: “Not enough of us are switching current account. There are some great accounts out there, but the message isn’t getting across to enough people. Indeed, many of those picked up by the switching statistics may be so called ‘rate tarts’ – serial switchers who move frequently and repeatedly to benefit from incentives.
“The great shame is that millions of people have current accounts that pay little or no interest and offer no other benefits. Anything that can be done to champion good service and attractive benefits is to be welcomed, along with continued efforts to provide reassurance and guidance on the switching process.”