Traditional banking system continues to disappoint

Recent scandals at Barclays and RBS (which owns NatWest and Ulster Bank) respectively have resulted in many commentators deeming banks unfit to protect their customers‘ assets. In an expansive essay, The Guardian’s Aditya Chakrabortty, writing about the Barclays-LIBOR topic, described the attitude of banks as shamelessly accepting bailout payments financed by tax payers’ money in times of crisis and then funnelling it into the pockets of their own managers shortly after.

By tampering with lending rates, Barclays had entirely distorted tariffs, from, as Chakrabortty pointed out with merciless precision,

“how much homeowners paid on their tracker mortgages to the deals struck by pension funds purely to pump up bank profit margins and their own bonuses.”

The banking system is suffering from mismanagement

Even more scandalous, to him, was the fact that the fine slapped on Barclays by regulators, said to amount to £290m, was hardly a serious punishments for the institution, which earned as much in a mere two weeks of business. The legal combination of mild fines and high prospective gains meant that problems were threatening to spread to other banks – and across the entire banking sector. Chakrabortty’s comments were mirrored by James Nye from Mail Online, who quoted experts as warning:

“it could be the biggest consumer fraud in history”.

When in crisis blame the software malfunction

As if to prove Chakrabortty’s analysis right, a major software malfunction at RBS showed signs of negligence and incompetence at one of the country’s biggest financial services providers. As a result of the programme error, thousands of transactions were processed with a huge delay, creating massive problems for both private individuals and companies. Although a spokesperson for RBS was quick to publicly apologise for the mishap, all employees were forced to work long hours to deal with the backlog and the bank claimed all overdraft fees resulting from the error would be waived, there was no definitive statement on when and how, precisely, the issue was to be resolved.

Mismanagement hits customers hard

Requests for all customers to keep receipts of their banking transactions as evidence also did little to ease the minds of worried customers – the BBC reported it was being swamped with stories about the kind of serious issues RBS had created for their customers:

“Ken Taylor in Watford runs a payroll business and has 1,000 contractors still waiting to be paid.

Dean Sneddon in Bolton says he cannot pay for goods or his staff:

“Our business has not only not received payments, but money that was in the account has disappeared,”

Martin Reynolds from Birmingham is a disabled user of Ulster Bank. He says he has been unable to do the online food shopping he relies upon:

“I am disabled, and rely on shopping online. To date, Asda have had to cancel my essential food order twice.”

Eccount is a sound alternative for your banking needs

To Will Thomas of eccount money, the conclusions from these two scandals were quite clear:

“It is hard not to see a common theme between the RBS software problem and the Barclays-Libor issue. In both cases, traditional banking system have dealt with the money and trust of their customers in a careless and irresponsible fashion. There really is no excuse for this, especially since many of them are still very much relying on tax payers’ money to operate and can count themselves lucky they didn’t have to apply for bankruptcy only a short while ago.

It seems obvious that these issues are deeply ingrained into the traditional banking system. Customers are therefore well advised to take their funds to service providers who care about them and have built sustainable business models. Eccount money, for example, is financed by the monthly fee paid for eccount holders rather than excessive overdraft fees or outrageous credits – and our transparent fee structure rules out the kind of scandals witnessed at major banks.

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