It’s been a busy week, with all of the retail banks frantically trying to attract business away from their competitors. They’ve also been doing what they can to hang on to their own customers.
It’s puzzling, when we’re told that banks make no money from current accounts and subsidise them from their more profitable activities. Whether or not that’s true, we can clearly see them falling over each other in their desperation to sign us up.
Most of them have been relying on bribes such as vouchers, free coffee, free insurance and so on. The problem with this approach is that if everyone’s doing it no-one stands out. The banks are parting with money to gain little advantage. This could have a deleterious effect on their profits, and we wouldn’t want to see that, would we?
I have some suggestions for these competing organisations. They would do well to take heed.
They should identify a sector of the market that particularly suits their product, and concentrate their efforts there. A Lloyds current account, for instance, would be of great value to a money-launderer.
Such folk should be encouraged to use Lloyds to service their money-mules. There will be no difficulty in paying £100,000 into one of these accounts and immediately transferring it all out again. They will have no awkward or irritating questions to answer. In fact, it’s likely that Lloyds will not even notice.
This will allow the money-launderer to concentrate on their core business without unnecessary distractions. A bank’s primary duty, according to the Financial Ombudsman, is to follow their customers’ instructions. Lloyds carries out this duty with commendable diligence.
Another bank with a refreshingly relaxed approach to security is Santander. For example, if you have a business account with PayPal, you’ll be aware of its insistence that your name, as registered with them, is the same as the one on your bank account. This can be restricting if you want to use a name that’s better matched to your website. It’s also an inconvenience to members of the criminal fraternity. They may prefer to keep their identities private.
This is where a Santander account can be invaluable. Contrary to PayPal’s preconceptions, Santander has no interest in the name on the account into which it accepts payment. PayPal can label your payment ‘The Noble Association of Thieves and Fraudsters’ and Santander will unblinkingly pay it into one called ‘Albert Hetherington, Undertaker’.
Santander, like Lloyds, knows exactly where its primary duty lies.
These banks and others should follow my advice, and play to their strengths. They should stop being so modest; we need to know about unique selling points like these. If they were to tell the world about their special attributes, customers would come running. They could save themselves millions.
- Bank switchers ‘could save £600’ (bbc.co.uk)
- Marks & Spencer Bank hopes vouchers will tempt new customers (theguardian.com)
- Santander has ‘worst online banking security’ (telegraph.co.uk)
- The problem with banks ‘buying’ customers (telegraph.co.uk)