What Are Banks For?

Almost everyone has a story to tell about their bank and very few of their stories are positive ones.    It didn’t used to be this way.

I remember clearly the day that I opened my first bank account. I was 12 years old and my father took me to open a child account at the very grand branch of his bank in St. Jame’s Square. I was treated like royalty even though my life savings amounted to £100.

Ten years later the same bank refused to lend me a relatively small sum of money to open my first business. So I moved my account to another of the major banks who welcomed me with open arms. My new bank manager, Mr Bindefeld, agreed the loan and remained as my bank manager for the next 15 years – something that would be unheard of these days.

After he left the service started to deteriorate. None of his successors stayed very long and none understood my business affairs. The local branch closed and moved to a business park a few miles away. Later, that was closed too.

I was encouraged to use telephone banking which was very good when it started. However, as time went on it took longer and longer to get through. Later, the call centre was moved off-shore and the service deteriorated further. Finally, they replaced most of the staff when an automated ‘push one for A and two for B’ service which made it unusable.

Next, I moved to internet banking. Again, this worked well when it started but then they started to make it increasingly difficult to use.  This was probably done on purpose to encourage customers to use the banking app so that they could get more data and sell them more services that they did not want or need.

Throughout all of this I stuck with the same bank through a mixture of loyalty and inertia but about two years ago the problems went from difficult to impossible. They started to bombard me with ‘know your customer’ questionnaires despite the fact that I had been a customer and a mortgage holder for over 40 years. I gritted my teeth and completed all the questionnaires, one for each account, but the bank just sent the same questions again. I replied to say I had already sent them the information but they just sent it again. I then started to get text messages asking me to ring the call centre – so I did.  It took 20 minutes to get through and then they cut me off after 30 seconds. This happened six more times. I sent the answers again by recorded delivery post. They ignored them and just sent the questionnaires again.

Finally, I went to a branch in person. I explained the problem to the member of staff but she said she had no authenticity to deal with the matter and could only call the same call-centre for me. Again, it took 20 minutes to get through. She explained the problem to the call-centre operator and was promptly cut off! The staff member was clearly embarrassed, explaining that the call-centre team had a target for the number of calls they had to deal with and the moment she said: ‘I have a customer with six Limited Company accounts’, they ended the call to avoid increasing their average call time! How could anyone invent a system like this?

As a result, I was forced to move to one of the challenger banks where the service is excellent. My former bank has lost a customer from whom they made huge profits over a period of 40 years.

However, compared to others, I seem to have got off lightly. Hundreds of estate agents and letting agents have had their accounts closed at short notice because they could not comply with the banks’ new ‘know your customer’ procedures. This has often caused absolute chaos. One of my large clients was left unable to pay rent money to their landlords because their bank closed their account without warning.

Another huge problem is that the same banks have wilfully misunderstood the client money protection rules and have insisted that the pooled client account that has operated for many years must be replaced with a separate account for each landlord. The administrative burden that this placed on a letting agent with hundreds or even thousands of landlords is horrendous.

I cannot think of any other commercial industry where standards of service have deteriorated so badly and so quickly and clearly there is an urgent need for the governments to sort this problem out.

For a few weeks I thought that the problem might be addressed as a result of the Nigel Farage de-banking scandal but the publicity quickly died away and the matter now seems to have been forgotten. In the meanwhile, bank accounts are still being closed without good reason and staff are wasting hours every week sorting out routine banking problems that should be resolved in minutes. The only solution is for business owners to vote with their feet and move to one of the challenger banks who, in my experience, are excellent.

Adam Walker is a business sales broker who has worked in the property sector for over 40 years.