Savers who don’t have internet access are getting a “raw deal” from banks, according to a report by Which? magazine.
The report found that online banking customers were being offered financial products that were “massively better deals” than people who bought in branch.
The research, in the October issue of Which?, revealed that a typical online saver could be £375 a year better off than a fellow customer using only branch-based products.
According to Which?, Government figures show that four million Brits are “digitally excluded”, either because they can’t afford to go online or don’t have access to the internet. And more than a third (39 percent) of those are over 65.
The report found that the average rate for an instant access savings account available in a bank or building society was just 0.56 percent – compared to 1.14 percent for online savers.
Meanwhile, online ISAs also paid more than branch ones, with interest rates on £10,000 averaging 1.84 percent compared with 1.53 percent for those in a branch.
Which? warned that the banking industry appeared to be treating its offline customers as “second-class citizens”. While it said it understood that online accounts had lower overheads, it urged banks to offer “competitive rates across the board”.
Which? researchers also said that people buying travel insurance were far better off doing it on the internet – with a 355 percent difference between the best deal online and in branch. This was based on a 65-year-old, who would end up paying £38 for an annual worldwide policy with Best Buy insurer Multitrip.com, but who would have to cough up a much steeper £173 for the Best Buy on the high street – Co-operative Insurance’s Home Options policy.
Which? chief executive Peter Vicary-Smith urged more banks to start providing online access inside branches. He said: “Not everyone is comfortable or able to manage their finances online and these people are missing out on the best deals as a result.
“Banks should be more inclusive by offering terminals in branches where customers could access online deals, with some help from staff.”
A spokesman for HSBC told TechEye that “a good proportion” of its branches already had terminals to allow customers to access HSBC online banking.
He said that certain transactions were cheaper online, but that this did not necessarily apply to all banking services. He added: “I don’t think you can say that online banking customers get better deals across the board. But online banking does reduce admin costs and we can pass these savings on to customers.
“But, for example, there is no price difference on our current accounts online or in branch.
“Certain transactions are cheaper. For example, if you wanted to send a CHAPS payment, or priority payment, you can do that cheaper online than in a branch.”
He added that it was unlikely we would ever become a nation of customers using 100 percent online banking because people still liked to use telephone banking for certain things, or even visit a branch once in a while.
However over the past few years branches, particularly localised, have been shutting up and down the country. Would it be unfair to suggest that those without internet access – for example, pensioners – having to travel further to get to a branch just so they can go online seems something of a catch 22? What of the access issues for older people who can’t get out as easily? It is all very well if you’re set up with online banking and technologically savvy. But not everyone is.