Lloyds, Royal Bank of Scotland (RBS), NatWest and Saffron Building Society are in line to receive the first “Fairbanking” marks for financial products, under a scheme similar to FairTrade labelling for food that aims to improve customer “well-being”.
In a report published on Friday, The Fairbanking Foundation – a not-for-profit, research-based charity – revealed its provisional “star ratings” for current accounts, savings accounts and credit cards offered by 27 banking groups in the UK. All the products have been measured against criteria for how well they help customers control their day-to-day finances, with the aim of awarding a Fairbanking mark to the best of them in June.
Lloyds’ current account has the potential for a three-star rating, for offering balance alerts and expenditure tracking to customers. RBS/NatWest may gain the same rating for its “goal-setting” regular savings account – while Saffron Building Society’s improved online savings tool gives it a possible four stars. Barclaycard’s text alerts and weekly spending tools earn a potential three-star rating.
According to the foundation, these ratings – which can be displayed alongside a Fairbanking mark on brochures and websites – have the potential to enhance product offerings on the high street and meet a key aim of the Independent Banking Commission (IBC) report published earlier this week.
Antony Elliott, director of the FairBanking Foundation, said: “The IBC interim report highlighted the need for significant improvement to the level of consumer-
focused competition in the banking sector, and that is exactly what Fairbanking’s rating and mark initiatives are intended to achieve. Growing consumer and industry awareness of them could transform non-price competition among banks.”
When compared with the first Fairbanking study in February 2010, the latest report shows an increase in the number of products meeting the customer well-being criteria, and in the ratings achieved. For example, Lloyds Bank now offers its “money manager” budgeting tool on current accounts and Saffron Building Society – whose “Goal Saver” account was one of few commended in the first report – now gives extra feedback to customers on reaching savings targets. Thinkbanking, a current account service run by RBS for the Think Money Group, has also earned a higher rating this time for adding a “sophisticated payment forecasting feature” to its non-debt current account.
Lloyds and RBS both welcomed the Fairbanking initiative as a way to help customers choose suitable products. “We know our customers want greater control of their money and we are investing in the tools to help them achieve this,” said a Lloyds spokeswoman.