Wednesday, 4 July 2012

Occupy your bank account (UK) - update

As, I've said before, in a culture where money already talks loudly enough to drown out most other conversations, consumer activism (one pound, one vote) isn't my preferred form of political engagement. The coalition's already doing a very effective job of disenfranchising the poor, without the help of middle-class ethical shoppers. Still, these are desperate times so, with a few reservations, I'm cheered to read that:
Consumers increasingly feel they can no longer trust Britain’s big banks to look after their money, with many closing their accounts, latest research shows.

As public outrage mounts over a catalogue of banking problems, from the RBS and NatWest technical problems and bankers’ bonuses, to the Barclays Libor rate rigging scandal and the mis-selling of payment protection insurance (PPI), customers are moving their money elsewhere.

A YouGov poll reveals that 60 per cent of customers don’t trust the high street banks to look after their money, 49 per cent think they are dishonest – and 45 per cent think they’re incompetent.,uk

 Even better, the US 'Move Your Money' campaign, has now spread to the UK. A few retail customers switching accounts probably won't make much of a difference, but at least it keeps the most important issue in the headlines - the fact that a handful of hostile institutions are still big enough to take whole nations hostage. Never mind splitting up retail banks from investment banks - what about the anti-competitive conglomeration of power within retail banking itself, with the Lloyds and RBS groups controlling nigh on 45% of the UK market?

We've had a succession of governments who've claimed to love the idea of competition so much that they've spent years determinedly trying to squeeze it into odd places with questionable results (the railway network, education, the NHS). Yet even when political class should be able to impose a bit more competition on the banks, after the billions they've hosed into these failed institutions, it's left to a scattered Dad's Army of disgruntled bank customers and activists to vote with their feet.

Of course, apologists for the banks will warn of dire things, should anything happen to threaten their market share. I've already heard the ones about this sort of activism putting blameless bank clerks out of work and forcing banks to start charging for current accounts. If these are the best threats they can come up with, bring it on. After all, the big merging, acquiring and branch-shutting banks have already done a pretty good job of shedding jobs in the sector and I don't buy the idea that more, competing players in the sector would result in fewer jobs overall. Likewise, who's more likely to impose unwanted charges on customers? An oligopoly of big organisations dominating the market, or a host of smaller players competing for customers' business?