Admittedly it wasn’t the bank’s ethical credentials that appealed to me, more the £200 they were paying to anyone who would switch, but then that in itself was something of a bold move at the time.
So undesirable a thought is it that, statistically, you’re more likely to get divorced than change who you bank with. The thought of the hassle and the fact that one bank seems pretty much like any other means that we’ve never had any reason to switch.
And that was me – until the £200 incentive got me moving. And just for the record, the whole switching process could not have been simpler.
Which is good news for the record numbers of dissatisfied customers.
According to Moneyfacts: “We have seen more interest in our current account best buy tables recently, out of all of our Moneyfacts.co.uk visitors approximately 7% are looking specifically at current account best buys alone, comparing to under 5% this time last year. Visitors to our current account best buy tables are at their highest since September 2010.”
So either that’s a lot of two-hundred-pound incentives that have been paid out, or there is a definite change in our perception of what makes a good bank.
A banking revolution?
Now with the Co-operative Bank set to takeover 632 Lloyds banking group branches, commentators say it could be the start of a banking revolution; as thousands shift to ethical banking.
But will that make any difference to them? What exactly is ethical banking and how does it differ from a non-ethical bank?
And is it a case of once a banker, always a banker, or can an ethical approach make a real difference?
Is ethical banking a contradiction in terms?
On the surface, ethical banking might sound like a contradiction in terms. After all, aren’t all banks money-grabbing, self-serving and morally-questionable?
While some might very easily give you that impression, ethical banks beg to differ. Traditional banks may not outwardly worry about ethics, morals or even environmental concerns but ethical banks do.
Why is that important? Well, some people (and what looks to be an increasing number) might be strongly against certain types of business or activity.
That could be on personal or religious grounds; the reason why is less important than the fact that they wouldn’t want anything to do with companies that carried out those businesses or activities.
Who you bank with is important
Because remember your money doesn’t sit quietly in the back of an ATM waiting for you to withdraw it; the bank uses it to make itself money.
Arms manufacturer BAE Systems banks with Barclays, while BP banks with NatWest and HSBC looks after mining company Rio Tinto’s money.
Now, if you don’t have any problem with that then all you should be interested in is how the bank looks after you as a customer. If, however, you’re strongly against arms companies, then you might not want to be indirectly funding them by banking with Barclays yourself.
In contrast, the Co-operative Bank says it has withheld more than £1 billion of funding from business activities that its customers say are unethical. These range from extremist organisations to arms manufacturers and companies that exploit child labour.
Ethical does not mean uncompetitive
But when it comes to being a customer, ethics alone are not enough I’m afraid. You still need to be shrewd with your hard-earned money.
Whoever you bank with, make sure the account meets your needs. You need to think about how you use it to ensure you get the best value from your new one.
If you’re always in credit it might be a smart move to grab cash incentives, whereas if you need to dip into your overdraft on a regular basis, then you would be better off keeping an eye on their interest rates instead.
Unfortunately, ethical banking is not the panacea to all banking ills. If only it were that simple. But it is another factor to throw into the mix when choosing where to keep your money.