Barclays bank has scored a disastrous four out of 100 in a test for honesty, customer service and value to society, on the same day a new service which makes it easier to switch current accounts has gone live.
The survey, carried out by lobby group Move Your Money, found Barclays to be the lowest scoring financial institution out of the 70 included. The group is encouraging Barclays’ 12 million current account holders to switch to other banks.
‘You don’t have to put up with disgraceful scandals, poor service and excessive bonuses any more,’ said Laura Willoughby, head of Move Your Money. ‘Now is payback time.’
Barclays, which has been embroiled in more scandal in the past few years than you could shake your credit card at, including the misselling of PPI and Libor rigging, scored just four out of 100. This put it behind RBS, with seven points, HSBC with 18, and Lloyds with 21 points. Barclays could console itself which the fact that none of its biggest rivals escaped Move Your Money’s ‘red rating’ (read as 'switch immediately').
Co-operative Bank scored 46 and Nationwide raked in 64, putting them in the ‘amber’ category. The only institutions worthy of the group's halo-polishing ‘green’ category were relative newcomers Metro Bank, which scored 77 and Handelsbank with 74, as well as Cumberland Building Society, with 89 points.
Although its not clear exactly what the survey is testing (how can you put a figure on 'value to society'?) it couldn’t come at a worse time for Barclays. From today it will be easier and quicker to switch banks: the industry has promised it will take seven working days to move, a change from an average of 30 before. Bank account holders are being told they could save up to £600 by switching their accounts to other providers.
The move follows a report from the Independent Commission on Banking from 2011, which recommended making it easier to switch in a bid to encourage greater competition among banks.
‘It is definitely worth switching,’ Mark Fiander from the Money Advice Service told the BBC.
‘It's not uncommon to save £500 or £600 by switching your bank. Now whether that's because you're not paying fees or charges, or equally if you're not getting interest that's sitting in your current account, it can really add up.’
A recent YouGov poll suggested bank account switchers would be most influenced by high levels of customer complaints, bumper boardroom salaries and fines for misconduct. Presumably the last thing Barclays chief executive Antony Jenkins wants to hear.
‘We work hard to put our customers at the heart of everything we do and have taken steps to ensure this happens,’ said a spokesperson for Barclays.
Whether banking customers will all jump in and start hopping from bank to bank is a question dividing analysts. An estimated 2 million people switched banks last year: some surveys have suggested this could increase to five million. Others are more sceptical: the Centre for Economics and Business Research thinks numbers of switchers will only double in the next ten years.
Somewhat predictably, the head of the relatively new Metro bank (which scored particularly well in Move Your Money’s test) is eager to make the seven-day switch a success: ‘To change the face of British banking, we need to make seven-day switching work,’ Metro chief executive Craig Donaldson told the BBC.
‘But we also need to create more choice for people,’ he said.
Meanwhile, former Barclays chief executive Bob Diamond, the man at the helm of the embattled bank when most of its misdemeanours were carried out, has called for a banking rules shake-up. He says insufficient progress has been made in safely winding down failing financial giants. He also reckons leverage was ‘too high in the boom years’.
Quite the change of heart for ‘Diamond Bob’ Diamond, but maybe too little too late for Barclays and its tattered reputation, waiting to see the outcome of the banking industry’s great switcheroo.