Time to drop the high street bank?

[AGTDenton]

I've been pondering this a lot lately. What worth is my high street bank or any high street bank for that matter?

My view of their philosophy has always been; during the 60s/70s/80s early 90s, how can we (the bank) increase the customers wealth. From the mid 90s I've seen it as, how can the customer increase our wealth.

During my lifetime my bank has never contacted me with an offer or advice to increase the health of my account. They've only ever contacted me to sell me something, like insurance or other such nonsense. It used to be that being in contact with the bank was of importance, and that idea is still evident as over the years I've been asked where my bank manager is or when I put a cheque in I have to give the address of the bank I signed up with, but I see that of absolutely no relevance these days. What difference does it make, especially as mine closed down eons ago to the point I barely remember its existence.

Additionally it was the done thing to have both a bank and a building society account. However, with interest rates as they have been for the last 10+ years, that's now a dilapidated view.

My current bank hadn't changed their online banking system since it was first implemented, back in roughly 2002, until last year. They made an already terrible experience even worse. You have to keep digging further and further for basic information that should be on the first page.

Looking at this letter on Wiki, it's clear that banks were much more adaptable to change back then. I view the electronic revolution described in the letter as the digital revolution we're currently experiencing, only this time round, traditional high street banks are so far behind that I'm not sure they will ever catch up.

My train of thought is to modernise and adapt over the next 24 months. I'd transition to a modern online only bank as well as cautiously a digital asset bank and leave the high street bank for dust as they've failed in almost every way for the last 20 years.
Yes there's some risk involved in the latter, but what's not to love about 12-20% interest being offered on your digital assets.
The online bank I aim to move to can take cheques with a simple photo, and that was for a while the only reason I would have held onto a high street bank.

Has anyone already made this leap and modernised, or is there no way you would change from your high street bank, do they offer you something you just can't give up?

[spacein_vader]

Living in a small town with no physical bank in we moved to an online only bank (First Direct x technically part of HSBC I think,) years ago.

The cheque photo thing is handy for the odd one grandparents still insist on writing, more use is being able to pay in cash at the post office (which we do still have in town,) the modern mobile app and the fact that you're never in a queue when you call them.

I don't blame the banks so much for interest rates being low, but it does mean creative looking elsewhere is required for a decent return. Things like premium bonds are the safe option but there are plenty of non-digital and more traditional investments for all risk appetites. Assuming digital =crypto I'm staying well away from that house of cards. Especially NFT ponzi schemes.

[DanceswithUnix]

I'm still with Barclays. They have an app which I can use to do easy payments and generally manage my finances, including apparently paying in cheques by taking a photo of it on the phone (not that I've seen a cheque to try it with for years).
If something goes wrong (rare, but has happened), I can pop into town and complain to someone, and they fix it.

[Jonj1611]

Lloyds can also do cheques with a photo, I am with several banks including a couple of online ones though my main account is with a high street bank. The reason for that is if there is ever a problem I can go and physically see someone

[cheesemp]

From what I hear almost all bank IT systems are barely understood (the guys who made them are retired/dead) unix systems that everyone is too afraid to touch/change. Everything else is just new software layers on top. I suspect this is why so many banks have day long failures while they have to careful restack the pile of layers once something fails.

I also find they have no local branches any more so why be loyal? To be honest the only reason I've not moved from Nationwide's pitiful systems is they screwed my mortgage direct debits both times I've switch before (once with them as provider, once as bank) - I almost lost out on a house purchase thanks to them.

I did almost switch to monzo, one of the new highstreet banks a year or so ago only to find they don't do joint accounts. Neither my wife or I have individual accounts so I stayed.

[Spud1]

Yep, I switched permanently to Starling 3 years ago and I don't regret it for a second.

Their tech is great - nice app, good integration with Google/Samsung pay, really easy integration into other services if you need/want it and above all else, top notch customer service (not that i've had issues with them, but more to cover things like large payment approval or general questions). There is nothing I miss from a high street bank with them tbh.

I would offer some caution though -not all "modern" banks are made equal - Monzo has limited integration support e.g. they still don't support Samsung Pay, Revolut still don't have a UK banking licence - I'd be very wary of them as a "main" account for now...and that's really the list - all the others that I know of also don't have UK banking licences yet or only offer Savings/credit products rather than full current accounts.

It's an evolving market right now but there is actually surprisingly little choice for true current accounts - there are loads of "fintech" apps out there, but until they get their banking licences I wouldn't touch any of them with a barge pole as a current account. That's not to say they can't be useful - I have a revolut account for making transfers to certain territories for example, and others for savings only...and I have tried Monzo too

Edit I guess there are also the "hybrid" banks to consider - First Direct for example have a great reputation and could be a good stepping stone, and some of the other high street banks have launched online online only brands too. Could be a way to find out if online only is for you, with the backing of a major high street bank.

[[GSV]Trig]

I'm with Coop and Lloyds, dont see a need to change for now as there's nothing that I need that they don't do.

[Ttaskmaster]

First Direct have always had a good rep, ever since I first heard about them in what must have been the mid-90s...

Santander is another that gets big votes from my more techy friends. Most of them get paid in cash for some of their jobs, as they're self-employed mechanics and the like, so being able to pay that in when they're passing the high street branch is great. They also get card machines from their work accounts, which is equally cool.

I'm still with Nationwide because it's always been a hassle-free and pleasant experience. I find them very friendly, both in person and in the various emails. They do seem to offer customers a lot, although most of it is for people who aren't me, but I even read the newsletters they send out and cast votes in their AGM.
However, I do prefer going in and sitting down with someone to chat about financial options and stuff over a cup of coffee. Far nicer than a phonecall and far better than having to wade through pages and pages and pages and pages of gumph to find the info I'm looking for.

I've had no problems with their tech side. I do some online banking from my PC, but all the mobile integration stuff and the higher end functions just seem like an absolute faff at this point, regardless of which bank/B-Soc you're with... and the really techie ones make it seem like a full-time job just to keep up with the latest stuff and find who offers the best deals on everything. I already have to do that for my car insurance, mobile phone, TV subscriptions, water, electric, and a dozen other things... all while having to work a full time job and then somehow find time to actually live the life all this stuff is supposed to be geared around.

It's a bank - I give them my money to safeguard, they get to invest it and pocket the profit, minus a fraction of a percentage for me in interest. That's all the deal is, as far as I'm concerned.
If I want someone who will be returning me 20-30% I know several financial investors and advisors.

[cptwhite_uk]

Yes there's some risk involved in the latter, but what's not to love about 12-20% interest being offered on your digital assets.

Curious to know where you can make 12-20% ...I'm getting about 6-9% on my Vanguard Stocks & Shares ISA.

[Ttaskmaster]

Curious to know where you can make 12-20% ...I'm getting about 6-9% on my Vanguard Stocks & Shares ISA.

Digital assets....

https://www.bankinghub.eu/themen/digital-assets

[Spud1]

Curious to know where you can make 12-20% ...I'm getting about 6-9% on my Vanguard Stocks & Shares ISA.

You generally can't, at least not risk free or anything approaching the risk levels of your VG Tracker. There are a whole load of financial instruments based on NFTS/Digital Tokens/various crypto's etc, with many of them being (falsely) advertised as risk free or similar. You absolutely have the potential to make those sort of returns, but also a much bigger chance to lose even more than that. The classic "too good to be true" rules still apply to digital assets and honestly right now its much closer to gambling than investing.

That's before we get into the Ponzi scheme that is most NFTs. But hey if you can risk some money then you can absolutely make a fortune in the short term I am a big believer in crypto & blockchain backed tech in general, but only once you understand the risks involved and that is not really about making money.

Honestly, if a bank or fintech firm is pushing these things hard then it should be a giant red flag.


edit: clarified my initial wording.

[CAT-THE-FIFTH]

It's a bank - I give them my money to safeguard, they get to invest it and pocket the profit, minus a fraction of a percentage for me in interest. That's all the deal is, as far as I'm concerned.
If I want someone who will be returning me 20-30% I know several financial investors and advisors.

This pretty much,especially as there are certain protections in place(if UK incorporated) and also ease of use,convenience,etc. Historically if you have been willing to do stuff your own way via various investments,you would always get a higher return. Its been the case for decades!

[AGTDenton]

The cheque photo thing is handy for the odd one grandparents still insist on writing

Exactly the reason I was looking for cheque handling

more use is being able to pay in cash at the post office (which we do still have in town,) the modern mobile app and the fact that you're never in a queue when you call them.

Definitely a nice to have feature! Just had a quick check, looks like Starling offer this as well.

I don't blame the banks so much for interest rates being low, but it does mean creative looking elsewhere is required for a decent return. Things like premium bonds are the safe option but there are plenty of non-digital and more traditional investments for all risk appetites. Assuming digital =crypto I'm staying well away from that house of cards. Especially NFT ponzi schemes.

Thanks, point taken and yes it is Crypto. Over a year ago I opened a traditional savings account which comes to an end in the summer. As it's a small amount I was going to switch to a digital savings account.

Yep, I switched permanently to Starling 3 years ago and I don't regret it for a second.

That's the one I'd be signing up to, once I saw cheques could be processed I was sold. I had a look at the other 2, but there was something Monzo couldn't do and believe they had some high fees for aspects I still use, and didn't get a good impression on Revolut.

It's an evolving market right now but there is actually surprisingly little choice for true current accounts - there are loads of "fintech" apps out there, but until they get their banking licences I wouldn't touch any of them with a barge pole as a current account. That's not to say they can't be useful - I have a revolut account for making transfers to certain territories for example, and others for savings only...and I have tried Monzo too

Edit I guess there are also the "hybrid" banks to consider - First Direct for example have a great reputation and could be a good stepping stone, and some of the other high street banks have launched online online only brands too. Could be a way to find out if online only is for you, with the backing of a major high street bank.

Thanks very valid points. I would only put in a tiny amount to dip my toes in whilst it evolves.

Curious to know where you can make 12-20% ...I'm getting about 6-9% on my Vanguard Stocks & Shares ISA.

As Ttaskmaster states, they are digital assets, the two that caught my eye are, Nexo.io & Crypto.com

And as Spud says, not without risk!

[cheesemp]

I'm still with Nationwide because it's always been a hassle-free and pleasant experience. I find them very friendly, both in person and in the various emails. They do seem to offer customers a lot, although most of it is for people who aren't me, but I even read the newsletters they send out and cast votes in their AGM.
However, I do prefer going in and sitting down with someone to chat about financial options and stuff over a cup of coffee. Far nicer than a phonecall and far better than having to wade through pages and pages and pages and pages of gumph to find the info I'm looking for.

I've had no problems with their tech side. I do some online banking from my PC, but all the mobile integration stuff and the higher end functions just seem like an absolute faff at this point, regardless of which bank/B-Soc you're with... and the really techie ones make it seem like a full-time job just to keep up with the latest stuff and find who offers the best deals on everything. I already have to do that for my car insurance, mobile phone, TV subscriptions, water, electric, and a dozen other things... all while having to work a full time job and then somehow find time to actually live the life all this stuff is supposed to be geared around.

You are very very lucky then! I will be brave enough to move one day...

I'll be honest nearly losing the house we where buying plus the stress of going into 'enhanced' mortgage affordability checks due their screw up with the transfer (It was current account to nationwide, existing mortgage was with nationwide!) never felt like they where looking after me. Trying to explain in a letter why you'd spent £X on games, £Y on takeaways etc etc for 3 months previous is not a pleasant experience - It was impossible to justify everything. Had to go to a broker and take a mortgage elsewhere in the end. Sad part is we only switch to nationwide to get a better rate mortgage with them!

Ugh - I hate banks and from my point of view nationwide have never felt any different.

[Iota]

My train of thought is to modernise and adapt over the next 24 months. I'd transition to a modern online only bank as well as cautiously a digital asset bank and leave the high street bank for dust as they've failed in almost every way for the last 20 years.

....

Has anyone already made this leap and modernised, or is there no way you would change from your high street bank, do they offer you something you just can't give up?

I've sort of transitioned, I moved my current account from Lloyds over to First Direct a few years ago (mainly for a disdain for the charges on an overdraft if I ever used it by Lloyds). Had zero issues with First Direct, nice phone app so rarely use the web version. Even had a decent rate on a regular savings account when everyone else was offering much of nothing from them. I do still have a basic Lloyds account though, for purely paying in those physical pennies that accumulate over the years. I know I can use the Post Office to pay money into First Direct, just never have as the Lloyds branch is closer and generally quieter at the time of day I go.

I found Fairer Finance to be a fairly good barometer of how good or bad different banks are, it also tells you if they're covered by the Financial Services Compensation Scheme. I'd be very wary of moving to someone who isn't as your money is not covered if everything goes tits up.

[Saracen999]

It probably won't come as a shock to those that know me that I'm not a fan of online banking. I do very reluctantly have online banking set up (which was a considerable PITA in it's own right) but it's with an existing high street bank, but I only have it at all by virtue of necessity.

I am also not a fan of traditional high street banks. IMHO, the days in which they actually provided a valuable service (and yes, they used to) are long, long over. I mean, that finished several decades back. When? Dunno .... 80's, 90's maybe. Since then, customers have become a number for whom they do the minimum they can get away with, and the 'service' becomes more and more impersonal almost month by month, and even if you do have a high street branch, it's getting harder and harder to get to see an actual person, as opposed to a row of ATMs inside the branch when I do go in.

So I use that bank more or less as a payment processor on a day-to-day (or month to month) 'float', with some savings and some investments sitting behind it.

The reality is I don't use either high street or online banks much, because I don't need them for much.