Banker bashing appears to have become a national pastime for certain sectors of the great British electorate in recent times. Of course it’s all gone a bit quiet right now (I can only imagine recent events have given those of a certain political persuasion different priorities to focus on) but pre-election it’s been pretty much seven solid years of blaming all of the world’s ills on a small group of professionals who, prior to 2008 had gone about their day to day business of trading and earning vast amounts of money relatively unnoticed.
I don’t really buy into all that and it has frustrated me greatly to watch certain politicians and commentators positively straining at the leash to utter those immortal words that will guarantee them a round of hearty applause from at least 50% (actually maybe not quite as much as 50% - any thoughts YouGov?) of the “representative” BBC audience:
It is therefore a strange feeling to be writing a blog that directs my own ire in the direction of the banking establishment.
My sights though aren’t focused on those redoubtable city gentlemen (and women) who fiddle your LIBOR rate or trade in toxic debt. No, my vitriol is reserved for the outdated, archaic, inflexible and immensely frustrating practices of the bog standard UK high street bank.
I’m not even going to launch any sort of attack on the object failure of the high street bank to play its part in the rejuvenation of the British economy (by, for instance, lending moderate sums of money to entrepreneurial start-up businesses who are chomping at the bit to help generate wealth and jobs). My complaints are a lot more prosaic than that.
Probably the best way to demonstrate the daily frustration I and my firm experience as a result of the intransigence of the banking community is to list just a few anonymised (sort of) examples:
- An overseas client with a UK company who travelled to the UK and spent an hour listening to a banking representative telling him about the wonderful debt factoring service they could provide, only to receive a one line email the next day declaring “the business has no appetite to provide facilities to UK companies whose owners /directors are domiciled outside the UK”. No names mentioned but this was from a bank that once claimed to be “the world’s local bank”. Not if you’re “Johnny foreigner” with the gall to invest in this sceptred isle obviously!
- The charity client who set up a UK subsidiary company and then failed after six months of trying to persuade their current bankers to set up a new account for that subsidiary. Another three months of correspondence finally produced an apology from that bank for the handling of the situation and an amount of £500 compensation – not paid, as you would imagine, as an electronic credit to the clients existing account but instead given in the form of a cheque that the client had to waste time queuing up in their branch to deposit back with them!
- The jubilant look on the face of a very pleasant but exceptionally world weary “Business Manager” when he realised that he’d managed to open a very basic account for my business (no overdraft; no loan) after only two hours of us sitting down and wading through mountains of paperwork.
- The 15 minutes I spent sitting outside the Oxford Street branch of a well-known high street bank one morning waiting for their staff to work out how to open the automatic doors and then the star jumps that the business manager had to do to get the lights to switch back on half way through our meeting because they were on a timer and the manager with the keys to reset it was late in to work.
- The endless requests that we receive from banks and other financial institutions to fax documents to them or to add our company “seal” (I’m afraid the fax machine and the sealing wax were thrown out the same day I shot the carrier pigeon).
The list goes on and on - these are just a few examples.
It’s not all doom and gloom though. You may not believe it but I am by nature an eternal optimist and I’m convinced that the industry will eventually be dragged (kicking and screaming maybe) into the 21st century!
The signs are already positive. It may still take endless hours of meetings and form filling in order to open a simple account with no credit facilities (effectively to just give the bank some of your hard earned money) but there is one area at least where progress is apparent.
Xero have been working for years to build up direct relationships with the banks so that they can secure much more stable direct feeds of bank statement information into their software. Here I will name names (credit where it’s due). HSBC signed up years ago and RBS / NatWest joined them a couple of years later. Both banks charge small fees for the privilege of this service but it’s a small price to pay for the efficiencies and peace of mind that it provides.
The question has to be – where are the others?! This was answered in emphatic fashion recently at Xerocon where it was announced that direct feeds would soon be available in the UK for Metro Bank and Santander with a number of others on the way.
It seems a lot more banks are jumping on board then and the reason behind this may well be Mr. Osborne’s proposed “little black box” that will collect a business’s financial information and submit details straight to HMRC for tax purposes. This is going to necessitate significant and long overdue technological development of banking systems in order for them to interface properly and it seems Xero is making the most of this!
Significant developments have also been made on the payment processing side with traditional credit card acquirers being challenged by more tech savvy and adaptable alternatives such as iZettle. Take a look at Ed’sblog from last month for more details about developments in this area.
It all seems to be moving slowly but surely in the right direction then. Now they just need to employ staff who can figure out how to open the doors and turn the lights on. Maybe someone from head office could fax over a memo?