Why British banks don't want new customers?
My experience with British banks.
How untrained front desk people can cost banks millions!
I was translating for several people who recently emigrated to Britain from Hungary. One of the tasks was to open a bank account so they can pay bills and auto insurance etc.
These people are from a country that is part of the European Union thus don't need any special permits or work permit to live and work in the UK.
We thought it'll be a simple process to open an account as they had several thousand pounds they wanted to deposit. They are also looking for work and wanted to deposit their paychecks into the same account.
The surprise came when we went to the first bank.
The bank would not take them on as a customer saying they have no jobs and how would they fund their bank account which is free to start with. I understand there is some administration fee to set up an account but after that, it is done by computers and not humans, except the tellers if they would make a window transaction.
Another requirement of the bank was, is some sort of proof of address which could be a utility bill like phone or gas-electric or phone company or a tax document from the IRS. Of course they don't have any of these as they are renting a furnished room in a private house and not need for utilities of their own and since they have no jobs as of yet there is no IRS document.
The result was, they would not let them to open an account.
The next Bank was Barclays.
Same thing. Untrained, unknowledgeable front desk personnel. After asking several questions from them about their requirements to open an account. The only difference was, since these people are from Hungary the bank wanted them to supply Hungarian utility bills to prove their address. Hmmm. I was puzzled, what do a British bank wants with Hungarian utility bills as proof of address in the UK?
So this bank wouldn't take them as customers either.
The next bank was Halifax.
Same thing. Untrained, unknowledgeable front desk personnel. The lady was a bit more curious and adventurous as the ones at the other banks because after telling us the same requirements and me doing some questioning she had actually got a bank leaflet that tells the customer what would they need to open a bank account.
On that leaflet, clearly stated what two documents are needed. One was a passport and the other a European Union ID card which they all had. After showing this to the lady she gave them an application form and told them, they need to fill them out and post it in the enclosed envelope to the bank’s main office where they would make the decision. They had them posted and now are waiting for the banks response.
First! British banks don't operate like normal businesses where a NEW customer walks in and taken care of, hoping to get their business. No! British banks, if a new customer walks in, tell them to call first and make an appointment for a future date if they want to open an account. Indication that they are the the ones in charge and the customer is nothing.
Second! If a new customer is lucky enough to be able to open a bank account most of them will get a so called "basic-basic account" which entitles them to nothing, but to withdraw cash at an ATM or have their bills paid by direct debit. They can't use their own money as their own because they only get a cash card that is only good for taking cash out at an ATM machine. No Visa or Master Card logo and thus they can't purchase anything on the Internet or in stores with that card. The harder it is to take the money out of a bank, the more money is left in the bank so they can invest them for their own good. After all, business is business!
The British banks reason for that, if a customer gets a normal (or current account they call it) account, that account comes with overdraft and if they are not making enough money how would they pay overdraft money if they use it.
Wouldn't it be more simple just to give overdraft only upon request and give the people the Visa or Master Card debit card like normal banks do and if they run out of money they can't make a purchase with the card. Is it too Simple for British banks?
Third! If someone deposits a check into a British bank account, that check gets cleared in a week or so. Some banks take as long as 8-10 days. Like Halifax for an example. (Those are business days) Showing people we don't care about you, we just want to use your money as our own for a while. Yet when someone takes money out or pays something using their account, the money is out of it in a heartbeat in less than a second.
Their reasoning of the long clearing period is, they have to actually verify that the check has money on it. Well, only takes a computer and a few keystrokes to enter the bank sort code and the account number that is on the check and transfer the money. If it can go out in less than a second it can go in in less than a second too.
Of course, banks have expenses with an account. But the expenses are minuscule because the system is set up anyway and people are employed to operate that account anyway.
Of course, the banks have to pay those people. But those people are already on the payroll doing their work.
Of course, if the bank takes on more customers their workload increases and have to hire more employees.
That's the cost of doing business as a business and it's already built into the operating expenses anyway.
Of course, the bank has other expenses like mailings and follow up or survey calls.
That cost is part of doing and improving business and the money is already allocated to it.
Of course the British banks are loosing the battle because they are not flexible enough towards today's environment. They are too conservative and not taking into account the changing needs of the people that technology brought.
The old snotty attitude of the banks don't work anymore and yet they are still