So I’ve been trying to open a new business bank account for Dsruptiv for a few days now.
My thought process was simple:
- Google search for “best uk business bank accounts“
- Identify a source I trust that has compared the offers available, in this case Martin Lewis’ Money Saving Expert (3rd hit)
- Choose a bank and apply online
According to Mr Lewis, NatWest stand out for offering free business banking for the first 24 months. Being from the UK, and therefore conditioned not to pay for my bank account, this was just what I was looking for. Plus I also have personal accounts with NatWest, so would get the added benefit of seeing all my accounts in one place under a single online banking login. I also hoped that being an existing customer would help expedite the application process e.g. no need for further Know Your Customer identity checks.
No such luck. I could start my application online, but the experience since I would best describe as multi-channel HELL.
These are the steps so far, noting that I’m an existing personal customer, I’ve had a business account with NatWest before (now closed), I’m the sole director of Dsruptiv Limited and I wanted their direct business banking service:
1. At the end of the online application process I’m informed that some details would need to be confirmed over the phone.
2. I missed the call back because I was busy. NatWest didn’t leave me a voicemail, but instead sent me a text message to my mobile:
From: RYLBNKSCOT
“We have received your internet enquiry for a business account, to take forward call NatWest 08000282677, RBS 08000686939 quote INTERNET 9 to 5”
[Given I applied via NatWest, why confuse matters by including numbers to RBS? Why the weird text speak aversion to vowels in the sender id? The message copy is dreadful and a total turn off.]
3. I called the number requested and managed to get through to the right department after 4 IVR menus. [Why make new customers jump through so many hoops?]
4. I’m told that as I’d requested the direct business service, it’s likely that I might be moved over to “the new challenger bank we’re setting up in about 12 months time.” I explained that I wanted the direct business service because I wanted the ability to talk to an advisor outside usual branch hours (i.e. not when I was likely to be working). I was advised that the direct business service isn’t 24/7 and only operates 8am-7pm Mon-Fri, so only marginally better that standard branch service (plus some branches are now open Saturdays). Even on the branch service I would still get 24/7 telephone and internet banking, and there would be no risk of my account being moved into the challenger bank.
5. So I agreed to set up a branch based account instead. I was advised I’d have to go into a branch, and was asked which branch I would like to visit. I asked for the nearest one and gave them them my post code, but the agent was unable to tell me which was my closest. [Weird given this service is available f0r me to use on the NW website.] The agent then puts me on hold while she contacts the branch I identified.
6. The telephone agent is unable to get through to the branch so has left a note for the branch to call me to arrange an appointment.
7. Frustrated, I walked to the branch, asked to open a business account and was ushered into an office within 5 minutes. I explained the situation. I was asked for the company’s certificate of incorporation which I emailed to the branch employee. He printed this out and then handed me a paper copy. He then picked up the phone and talked to the central banking team. [Perhaps this could have been done over the phone after all?] I was advised that they couldn’t open the account immediately, and that I would receive a call back to arrange an appointment to visit a branch. I asked what further information is required. I was told that everything was in order but I have to speak with a business banker. I was promised that I would receive a call within four hours (I visited the branch at midday), certainly by the end of the day.
8. A day later, I’m yet to receive a call back.
I’m struggling to understand the part of this process that cannot be fulfilled direct with straight through processing. A Companies House look-up to validate the business name, incorporation date, registered number and my association can be performed automatically. Further given I’m an existing customer, I could easily authorise the account opening after securely logging in online or verifying my identity over the phone.
While I recognise providing business banking to small and medium enterprises is not as profitable as as providing banking to consumers or big business, I would posit that most SME customers are also personal customers of the same institution. Therefore getting the experience right is critical, because you might not only lose the opportunity of further business (the SME) but also the customer and their personal accounts.
If banks can’t address their experience failings, I’m certain that others will on their behalf. Other organisations will step in, own the relationship to the customer, help identify the right service or product, and then negotiate prices down given their buying power. It’s an extension of a trend that has already begun in the UK – namely the use of aggregators in helping me choose the right bank at the beginning. In my case this was Money Saving Expert, but easily could have been the more commercially focused Money Supermarket, Go Compare, uSwitch, etc. It’s a natural extension for those firms to take more ownership of the relationship from the banks, in a similar way to car insurance, where they already help customers when it’s time to renew, and therefore control most of the value. (Car insurance firms typically only turn profit if you renew successive times with the same firm due to marketing costs.)
If you look to the USA, this trend has already begun. Simple and Moven are both what I would call “meta-banks”. They may not be regulated to hold deposits, so are not banks per se, but they are the brand that their customers trust to manage their money. Simple and Moven own the relationship with the customer, given the customer uses their interfaces – their website, apps etc. – to access banking services. Under the surface, meta-banks take white-labelled products from actual banks – whether that be bank accounts, debit cards, credit cards, etc.
And so banks may ultimately become dumb balance sheets, in a similar fashion to the way telecommunication networks have become dumb pipes. Yes, they provide essential services (saving and borrowing), but they will lack insight into, and have only a low impact relationship with, the end customer if they are intermediated. If this trend continues, their opportunity to help the end customer, and earn a profit from doing so, will be severely limited.