Latest News About England: RBS outlines changes – what will that mean for its customers?

jueves, 27 de febrero de 2014

RBS outlines changes – what will that mean for its customers?

RBS aims to be 'smaller, simpler, smarter', scrapping 0% balance transfers and teasers for new customers, and simplifying savings

Alongside the announcement of an £8.2bn loss, RBS also outlined its plans to become "a smaller, simpler and smarter UK-focused bank that puts the needs of its customers at its core". The bank said it would be improving customer service and making some big changes to the products it offers borrowers and savers.

What is it doing for borrowers?

It is scrapping 0% balance transfer deals on credit cards from mid-March. The credit card market thrives on these deals, which allow customers who have built up borrowing elsewhere to move their debts between providers. Banks and building societies are offering interest-free periods on transfers for as long as 31 months, and although they now have an upfront transfer fee, they can prove a good bet for consumers determined to clear their debts without adding to their borrowing. RBS currently has a range of deals in this market, including a platinum card offering up to 28 months interest free. The bank's decision to scrap the deal is part of a move to stop offering products to new customers that are not available to existing ones.

Andrew Hagger, a finance expert at MoneyComms, says that although RBS's current deal put it in the top 10 "there are so many others on the market it is not going to be missed". He added: "People are quite happy to shop around for these deals, they don't necessarily take a credit card from the bank their current account is with, so if they want a 0% deal they will look elsewhere."

What is happening to savings rates?

RBS says it will stop offering different rates to customers who bank online. "Customers should be able to bank with us in the way that is best for them and not pay more for doing so," it says. Previously, in common with many banks and building societies, RBS offered special deals for those who only wanted to operate their accounts online, but in July 2013 it withdrew several of its e-savings deals. Now all of its accounts are available via all of its channels and it has committed to keeping things this way.

"Customers will be relieved that the range is less confusing," says Hagger. "However the rates they offer are not very competitive." The Instant Saver account, which pays just 0.50% on balances up to £25,000 can be beaten offline – Britannia building society is offering 1.5% on instant access savings.

The bank has also banned "teaser rates" on any product, meaning no more short-term savings bonuses either.

What does this mean for existing customers?

All existing Isa customers were moved to the new rates in November, and the bank says it will do the same for all of its instant access accounts by the end of the year. In the meantime, some customers will get a different rate to that on offer to new customers.

Are current accounts changing?

There are no changes to products but the bank has said that by the end of the year new customers will be able to open an account in just a day, rather than five as is currently the case.

What about customer service?

The bank says that by 2020, it wants to be "the number one bank for customer service and the most trusted bank in the UK". It has some way to go – on Wednesday, the consumer website MoneySavingExpert said its readers rated customer service on current accounts at RBS/NatWest 13th out of 14 providers, and a string of IT failures, as well as ongoing PPI payouts, have dented public trust.

The executive director of Which?, Richard Lloyd said: "We're encouraged that RBS says it will now put customers first and we look forward to seeing better rewards for loyal customers, simpler products and faster service. This is an essential step towards winning back consumer trust in the bank but it's the start of a long journey and it will be important that changes are clearly communicated to customers."

Does this all just apply to RBS?

No, the same things are happening to its NatWest and Ulster Bank brands. Their savings rates have already been simplified, but they still offer 0% credit card deals.

Are other banks doing the same?

Banks and building societies are moving towards simplifying their ranges. On Wednesday, Nationwide announced a big shake-up to its savings accounts which included the removal of an e-savings account for online customers only.

The regulator is currently looking into "teaser rates" for new customers, and could recommend that they are withdrawn completely.

Hilary Osborne