New comparison tool to offer best current accounts launched
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Version 0 of 1. A new government-backed comparison service that allows people to use their own personal data to find the best current account goes live on Thursday. It could prove controversial because it involves customers handing over their bank statements to a price comparison website. The launch of Midata online tool means that for the first time, customers of the big five banks – Barclays, HSBC (including First Direct), Lloyds (including Halifax and Bank of Scotland), Royal Bank of Scotland/NatWest and Santander – as well as Nationwide building society, will be able to use information from their statements to compare all the accounts on the market to see which would offer them the best deal, based on usage of their own account. This innovation could transform the current account market. The comparison tool is part of a wider government programme that aims to give consumers better access to, and control over, their personal data. The government said this could transform the multibillion-pound current account market, and has teamed up with the price comparison website Gocompare.com, which is currently the only company offering this facility. The service allows people to download a file containing their last 12 months’ bank statements from their bank’s website, and then upload this to Gocompare’s website. The site said the file would contain no identifying information about the account holder – names, addresses etc – as this would have been “redacted” by the bank beforehand. Once the customer has uploaded their data, the tool will look at all the accounts on the market and present the individual with a personalised table showing how much money they could save by moving to another bank or building society account. It will do this by making around 1,500 calculations and examining more than 30 different types of transactions, including overdraft charges, in-credit interest, overseas charges and fees for bounced cheques. More than 1.6 million people have moved their accounts since a seven-day switching service came into force in September 2013. But Gocompare claimed people were still reluctant to change bank accounts, with its research showing that 40% saying they had never switched. The table will break down the costs and benefits associated with each account, and include any switching incentives on offer, in-credit interest, and any charges. The City minister, Andrea Leadsom, said: “This innovation will put much more control in the hands of customers, and could transform the current account market. It will help customers understand how they are spending their money and whether they can get the best deal.” But it could encounter resistance from customers nervous about handing over personal data – even in an anonymised form. Leadsom said those who use the facility could be reassured that their data would be protected, adding: “The banking industry has worked closely with the government and the Information Commissioner’s Office to make sure safeguards are in place.” Gocompare, meanwhile, said the data used in a search was encrypted and “purged” at the end of the process. A spokesman said it would not be able to read the data, which would not be kept or used for any other reason than to carry out the necessary calculations. Customers of banks that have not signed up to the initiative will not be able to use the tool, because these institutions have not yet agreed to provide the downloadable statements. And the new service will not work on devices such as iPads, because it makes use of csv files (similar to Excel spreadsheets), which are not compatible with many tablets and mobiles. |