Money Insider: Lessons for all of us to learn from RBS and NatWest debacle
Saturday 30 June 2012
The computer problems that have dogged RBS and NatWest have been front-page news with stories of inconvenience and misery aplenty. When the situation is resolved and the bank tries to get on with business as usual, no doubt there will be one almighty investigation into how and why this issue was allowed to happen and what must be put in place to prevent it happening again in the future.
It's an issue that will haunt RBS and NatWest for many years to come as it attempts to repair the considerable damage to its reputation and reassure customers that it was a one off.
At the same time, maybe it will prove as a wake-up call to us all, not just those RBS and NatWest customers who didn't receive their wages or salary payments and were unable to use their debit cards due to lack of funds.
The lesson that many will have learned over the last couple of weeks is not to keep all your accounts with one bank. Just think for a minute about your own situation, if your bank encountered a similar systems issue as NatWest and you were unable to access your accounts, how would you cope financially?
Now, I'm not suggesting keeping a pile of notes under the mattress as a backup, but it's certainly worth keeping some easily accessible money in a separate bank or building society.
There were many tales of woe on the TV where people had no access to cash within 24 hours of the computer failure, so it makes sense to have an instant-access savings account at another bank as a contingency fund that you can dip into in case of emergency.
Alternatively, you could keep a credit card available to use in such situations, after all, that's what they're meant for, to help you manage your cash when something unexpected happens and you suddenly have to find money for something you hadn't planned for.
The pain for RBS and NatWest is likely to include losing customers to competitors with many reports saying that people will be switching their banking custom elsewhere as soon as normal service is resumed.
In the seven days up to 25 June, the Moneynet price comparison website echoed this as we saw the number of visitors to the current account section of the website increase by almost 10 per cent compared with the average for 2012 to date, so it looks as if RBS and NatWest's problems could be good news for its competitors.
Usually consumers are apathetic when it comes to switching to a new bank, with many having remained with the same provider since leaving school or starting work, but it's no surprise that those suffering major inconvenience are this time starting to consider their options.
If you're looking for a new account, these are some pointers based on what aspect is important to you:
If you are always in credit, I would look at Halifax Reward Current account which pays you £5 net each month as long as you fund the account with £1,000 per month (however it's one to avoid if you sometimes go overdrawn as charges are high).
Those who keep their balance in the black could also consider the benefits offered by the 123 Current Account from Santander which pays interest on credit balances over £1,000, plus you get up to 3 per cent cash back on household bills paid by direct debit.
If you fall into the bracket of frequently using an agreed overdraft limit, then a decent option is the 1st account from First Direct. You need to be able to fund the account with a minimum of £1,500 per month, but you'll find the first £250 of your overdraft is interest free and a competitive 15.9 per cent above that. Another plus is that you'll also get a £100 payment from First Direct when you switch.
Another option to check out is the FlexAccount from Nationwide Building Society with a lower-than-average overdraft rate of 18.9 per cent plus free European Travel insurance and a reputation for offering attractive loyalty deals for current account customers.
For travellers looking to keep costs to a minimum when using a debit card abroad then I'd suggest the Gold current Account from Norwich and Peterborough Building Society or a current account from Metro Bank, both offer a fee-free card.
While NatWest and RBS will make it a priority to put plans in place preventing a repeat of this fiasco, it's a reminder to the rest of us to make sure we're more financially prepared too.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Pension mortgages: 'The advice I was given was wrong and now I face losing my home'
You'll need £220,000 for a minimum wage in your retirement
Questions of Cash: I checked in with Air France in time and still missed the plane
Money Insider: Supermarkets: the real challenger banks
Minister's pension promise to firefighters challenged
- 1 Planes go hybrid-electric in important step to greener flight
- 2 Antonio Martin shooting: Mayor says there should be 'no comparison' to Ferguson
- 3 Antonio Martin shooting: Police and protesters clash over teenager's death just five miles from Ferguson, Missouri
- 4 Northern Lights above Britain: Stunning Aurora Borealis illuminates Northumberland sky on Christmas Eve
- 5 British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens