Time to drop the high street bank?

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?

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.

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.

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

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.

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.

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.

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.

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Originally Posted by AGTDenton

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.

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

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Originally Posted by cptwhite_uk

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

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Digital assets....

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

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Originally Posted by cptwhite_uk

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

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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.

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Originally Posted by Ttaskmaster

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.

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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!

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Originally Posted by spacein_vader

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

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Exactly the reason I was looking for cheque handling :)

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Originally Posted by spacein_vader

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.

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

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Originally Posted by spacein_vader

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.

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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.

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Originally Posted by Spud1

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

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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.

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Originally Posted by Spud1

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.

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

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Originally Posted by cptwhite_uk

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

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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!

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Originally Posted by Ttaskmaster

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.

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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.

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Originally Posted by AGTDenton

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?

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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.

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.

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Originally Posted by cheesemp

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.

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This is far from unusual! I remember having to go line by line through the last three months of statements too (with a different provider to Nationwide) but at the end of the day it's just so they can sign off due diligence.

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Originally Posted by Saracen999

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.

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I remember a loooong time ago we had a small bank in the village I used to live in, I went in when I was about 7/8 to open an account and they sat down with me and we had a chat, cant even remember the name now, but moved from them to Natwest back in the days you would get pigs to collect.
Banks are like politicians now, just in it for themselves and when things go wrong they don't seem to suffer the consequences but get everything brushed under the carpet by friends in higher places..

Its all a cash grab these days, do high-interest accounts even exist anymore, you used to be able to stick money in an account that was high interest and then if you wanted it you had to wait like a month before funds were available...

That sort of high interest account don't exist any more, no, Trig (IMHO) but nor do the sort of mortgages that saw me paying 15%, despite me having about 40% of the purchase price of a house in cash. In other words, I don't think we can really blame the banks fo overall interest rates. It's far from being this country only, and applies to both savings and borrowings, that we're in a different world.

At least, we are at that end of the market.

It is still possuble to get pretty good returns, by which I mean double digit interest rates, but on investment accounts not savings accounts, and even then, that involves an element of risk. To get good returns effectively means good investmnet advice, and that means having enough capital to invest to interest good forms, and afford their fees.

That is to say, money still goes to money. If you've already got it, you can get it. Always has been like that, and no doubt always will, with the average Joe getting neatly cut out of that. It'll only change when, and if,we end up in a StarTrekian utopia where something else replaces money as what makes the world go round because right now, it sure still is.

Cynic? M'oi?

Cynic, yeah, theres a lot of that going round, perhaps its an age thing, which would obviously make you more cynical than me ;)

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Originally Posted by kalniel

This is far from unusual! I remember having to go line by line through the last three months of statements too (with a different provider to Nationwide) but at the end of the day it's just so they can sign off due diligence.

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Not to this level - I had to account for every bit of discretionary outlay for 3 months (I had to try justifying why I had spent £3 on a steam game in a letter for example!). The mortgage was all fully agreed until they screwed up the direct debit transfer just before signing off on the mortgage. The nationwide advisor told me I was very unlucky, he'd sort it out and I just had to explain in a letter that it was all their fault to get out of special checking. However the underwriter didn't want to know and kept asking for more and more details (all in letters!) plus how could I afford the mortgage with so many different outlays etc. I had 30%+ equity, ok affordability and no other blemishes on my record. When I went to the independent, he got me a mortgage with no more than a copy of my statements/earnings and at a better rate. Instant agreement - no issues or explaining. It should have been the same at nationwide if not for their screw up with the direct debit. I've had many mortgages since and before - trust me this wasn't standard due diligence checking. It was super stressful and unpleasant. I've used independent advisors ever since every other one has been equally simple (and never nationwide for the mortgage)!

I don't think I'd have been so annoyed by it all if it wasn't for the regular nationwide adverts saying we're by your side - no they flipping well weren't! Rant over...

@cheesemp .... I have to say an experience like that would have me spitting feathers too.

My question is ... do you believe that to be typical of them? Or, perhaps, was eiher an individual, or maybe a branch, in CYA mode, or liability-reduction mode, or something?

I've never had any dealings wih them so have no first hand experience, either positive or negative, to compare it to. I have had negative experiences with several other banking institutions, including outright incompetence, but nothing so ... peurile, so petty, so ... almost overtly vindictive, as that.

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Originally Posted by Saracen999

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.

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How much of this is because there are now far more people wanting far more of everything done for them and expecting it within 5 minutes, do you think?

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Originally Posted by cheesemp

--- Warning rant ahead ---

Not to this level - I had to account for every bit of discretionary outlay for 3 months (I had to try justifying why I had spent £3 on a steam game in a letter for example!). The mortgage was all fully agreed until they screwed up the direct debit transfer just before signing off on the mortgage. The nationwide advisor told me I was very unlucky, he'd sort it out and I just had to explain in a letter that it was all their fault to get out of special checking. However the underwriter didn't want to know and kept asking for more and more details (all in letters!) plus how could I afford the mortgage with so many different outlays etc. I had 30%+ equity, ok affordability and no other blemishes on my record. When I went to the independent, he got me a mortgage with no more than a copy of my statements/earnings and at a better rate. Instant agreement - no issues or explaining. It should have been the same at nationwide if not for their screw up with the direct debit. I've had many mortgages since and before - trust me this wasn't standard due diligence checking. It was super stressful and unpleasant. I've used independent advisors ever since every other one has been equally simple (and never nationwide for the mortgage)!

I don't think I'd have been so annoyed by it all if it wasn't for the regular nationwide adverts saying we're by your side - no they flipping well weren't! Rant over...

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Effectively by getting you to move current accounts with the enticing offer of a mortgage, they have done a bait and switch.

Regardless of whether you took your mortgage elsewhere or not, raise a complaint. They have utterly wasted your time with misleading you into moving your bank to them and then screwed you on the mortgage. Work out how much time was wasted and put a realistic value on that.

The process for raising a complaint is you state your problem and how they can make it right with you. This starts an 8 week timer after which you can raise the case with the ombudsman. Having witnessed "discussions*" inside a bank where a customer complaint has been left festering for too long and the 8 week deadline was approaching, they will probably take you seriously, provided you are being reasonable.



* Robust discussions. Very, very robust.

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Originally Posted by Saracen999

@cheesemp .... I have to say an experience like that would have me spitting feathers too.

My question is ... do you believe that to be typical of them? Or, perhaps, was eiher an individual, or maybe a branch, in CYA mode, or liability-reduction mode, or something?

I've never had any dealings wih them so have no first hand experience, either positive or negative, to compare it to. I have had negative experiences with several other banking institutions, including outright incompetence, but nothing so ... peurile, so petty, so ... almost overtly vindictive, as that.

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As I mentioned in my first message - this was a tech problem. Nationwide seemed unable to handle a direct debit moving either as a bank account or a mortgage provider. This tech failure was the cause of the failed payment which then bumped me into these 'special checking'. It wasn't a bait and switch tactic (thanks for the response though @badass). It was their tech failings screwing me over. I got treated as someone with bad credit marks even though the only ones I had where nationwide screw ups. This was nearly ten years ago so maybe things have improved but I doubt it as I still believe all the backends to be the same ropey UNIX systems from the 1980s just like all the other mainstream banks (I know the hardware has been upgraded but the software has not - I think the only thing protecting banking from major hacking is no one understands the out of date tech).

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Originally Posted by cheesemp

This was nearly ten years ago so maybe things have improved but I doubt it as I still believe all the backends to be the same ropey UNIX systems from the 1980s just like all the other mainstream banks (I know the hardware has been upgraded but the software has not - I think the only thing protecting banking from major hacking is no one understands the out of date tech).

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Unix is what you want on the hardware, it's what stuff like the big almost unbreakable IBM servers run. It's just the crappy old software being run on it.

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Originally Posted by cheesemp

As I mentioned in my first message - this was a tech problem. Nationwide seemed unable to handle a direct debit moving either as a bank account or a mortgage provider. This tech failure was the cause of the failed payment which then bumped me into these 'special checking'. It wasn't a bait and switch tactic (thanks for the response though @badass). It was their tech failings screwing me over. I got treated as someone with bad credit marks even though the only ones I had where nationwide screw ups. This was nearly ten years ago so maybe things have improved but I doubt it as I still believe all the backends to be the same ropey UNIX systems from the 1980s just like all the other mainstream banks (I know the hardware has been upgraded but the software has not - I think the only thing protecting banking from major hacking is no one understands the out of date tech).

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You have a right to have your record corrected with the credit providers (IIRC Equifax and Experian) and anywhere else. This was the law even before GDPR was implemented. If your record has not yet been corrected, force them to do so.

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Originally Posted by badass

You have a right to have your record corrected with the credit providers (IIRC Equifax and Experian) and anywhere else. This was the law even before GDPR was implemented. If your record has not yet been corrected, force them to do so.

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I did get it corrected as soon as I was aware. The problem is, due to it being present at application I was then picked up for this enhanced checks (and therefore screwed). I came to the conclusion its almost impossible to get through enhanced checking - deliberately as its for defaulters! I'd had a mortgage for 8 years before then with ~3 years with nationwide so my history was good apart from their mess up.

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Originally Posted by DanceswithUnix

Unix is what you want on the hardware, it's what stuff like the big almost unbreakable IBM servers run. It's just the crappy old software being run on it.

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That's my point - these systems are 40 years old. The hardware and OS might have been upgraded but the software is just a mess of misunderstood layers.

At least it's moved on (apparently) from the days when it was largely all COBOL.

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Originally Posted by Saracen999

At least it's moved on (apparently) from the days when it was largely all COBOL.

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Given all the problems high street banks have and low level of change do to risks/limited IT budgets/interest from board level I'd believe COBOL was 100% gone when I saw it. I've heard enough horror stories from banks that I wouldn't want to work on their systems for double what I currently pull in.

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Originally Posted by cheesemp

Given all the problems high street banks have

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Most of the disasters that hit the news seem to be down to outsourced IT staff submitting dodgy overnight batch jobs into systems they don't understand. That's more an incompetent management trying to cut corners on staffing costs problem than anything technical, which if anything is more worrying :(

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Originally Posted by DanceswithUnix

Most of the disasters that hit the news seem to be down to outsourced IT staff submitting dodgy overnight batch jobs into systems they don't understand. That's more an incompetent management trying to cut corners on staffing costs problem than anything technical, which if anything is more worrying :(

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This is often the problem with IT in places like banks with no technical management - they just view it as a cost to be squished not something to invest in!