Money Insider: Lessons for all of us to learn from RBS and NatWest debacle

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.

a.hagger@moneynet.co.uk

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