Banks throw money at customers to entice them to switch

Business banking news review: week ending 20 Nov 2014

Smaller banks are willing to try anything to get customers to switch – including just throwing money at them in a bare-faced attempt at bribery.

You know things are bad when High Street has such a stranglehold on the personal and business bank accounts in the UK that smaller banks are throwing shedloads of money at customers to entice them to switch.

At the top of the list right now are Yorkshire and Clydesdale banks, as they’re both dangling wads of cash under the noses of anyone who switches their current accounts to them. £150 quid in fact is on the line – maybe not exactly Harry Enfield levels of cash but it’s still a nice bit of money to be sure.

Of course, this little bonus comes with some rather stringent requirements, though. Customers won’t get the cash unless they commit to making a £1,000 minimum deposit every month. It’s not just new customers that are eligible for the deal though; existing customers are also welcome, provided they have cash to transfer in from another banking institution.

So what’s this say about the state of personal and business banking in the UK? Well to be sure it’s a bloody mess. As much as the new seven-day switching rules have tried to foster more lateral movement amongst customers in an effort to break apart the competitive stranglehold the Big Four have on the market, it’s only been marginally effective to be sure. Not that it isn’t a good idea – for what it’s worth, there was no reason that switching current accounts from one bank to another needed to take so long in the first place – it’s just that High Street banks are so entrenched that it’s hard to get a leg up. Even new upstarts like Metro Bank, who have been largely successful in growing their market share, are still operating at a loss because securing new customers is like pulling teeth – and Metro is one of those banks that puts most High Street institutions to shame.

Still, I can only hope that the landscape improves for current account holders. As far as savings accounts goes, banks are providing such abysmally poor interest rates on their savings products that you’d might as well just put all your banknotes in a big pit in your back garden and light the whole thing on fire.

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