First Direct, and not judging a book by its cover

Sep 17, 2014   //   by Keith McDonald   //   Banking and Savings Accounts, Commentary / Editorial  //  1 Comment

Some well-known sayings are there for a reason. “Don’t judge a book by its cover” is among the best of them, and one of the traps we can easily fall into when it comes to judging our banks.

First Direct has just topped a customer service league compiled by Which?. It’s good news for the beleaguered banking industry, and it’s no fluke either. For some time now, the online bank has been lauded for its strong performance and excellent customer service.

But because it’s owned by HSBC, which has gone the other way in recent years, First Direct becomes too easily associated with all the misdemeanours of its parent bank.

Move Your Money, a campaign site that encourages people to switch banks, is one site that is particularly culpable of this blinkered way of thinking. Despite admitting that First Direct ‘has happy customers’, it overlooks this completely, preferring to bracket everything about the bank together with its owner.

Move Your Money HSBC Group

I took them to task on this a year ago, when First Direct was voted the UK’s third best company in the same annual Which? poll. “We hope to refine”, they said. A year on, and clearly that hasn’t happened. In fact, First Direct somehow ranks below Move Your Money’s detested HSBC, which makes an absolute mockery of its ascent to the top of the customer service league in 2014.

To my mind, there are two fundamental flaws with this rather convenient methodology.

Firstly, to say that ‘[in the] most part the performance of the whole group is the same’ is to grossly misjudge any exception to the rule. It’s one thing to lump together two banks like Yorkshire and Clydesdale, which are both Australian-owned and where one doesn’t cough without the other one following.

This is clearly different, however. The liquidity is HSBC’s, but the operations – quite clearly – are not. And it’s just too lazy to talk about a bank entirely in terms of its provider, as MYM does here.

First Direct - Move Your Money Crop

Ahem. What if I want to know about First Direct? This tells me bugger all about it! Instead, it’s pushing scandal down our throats like a tabloid. It doesn’t even try to see past HSBC – and therefore, unfortunately, it stinks of agenda.

Secondly, it’s a bit raw for the site to be making such weighted value judgements about what it expects customers want from their bank. The site’s scorecard is largely based on what is loosely termed ‘ethical’ value judgements. That’s fair enough, to a point. But it doesn’t reflect everyone’s prerogatives.

If everyone placed ethics first, Triodos Bank and the Charity Bank would be household names. Unfortunately, they aren’t. Moreover, trust in the ethical has understandably dipped, following the Co-operative Bank’s brush with disaster last year.

I’m willing to bet that if a bank is keeping its customers happy, that will be their first priority by some considerable distance. That’s why it’s poor form that a switching site is telling us that First Direct’s excellent customer service should count for nothing.

Don’t get me wrong – I like Move Your Money’s overarching objective. Two of the reasons why banks have misbehaved the way they have in recent years is because of sightless greed on their part and dogged resistance to change on our part. It’s right to remind people that there are alternatives beyond the high street giants and that not all banks are the same.

But the big banks are going to dominate the current account market for some time to come, and it’s sending completely the wrong message to say that a bank rated so highly for its customer service is entirely the wrong place to go.

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  • David

    Thank you. The argument here is, for me, lucid and convincing. Perhaps I am naive to know as little about parent and affiliate banks as I do (with most of my knowledge digested only recently from your video on How to Keep Your Savings Safe), but I don’t consider First Direct’s relationship to HSBC all that relevant to any decisions I might wish to make about who to bank with – and I certainly don’t consider it decisive in the way that Move Your Money suggests it is. An Honesty score of 0 needs strong, informative justification, but this seems to be absent. There is a world of difference between ‘reflecting affiliate banks’ and painting ‘IT’S AN AFFILIATE BANK, DAMN IT TO HADES’ in huge letters.

    With respect to Move Your Money, I need a lot of salt and a large pinch before I venture near their Switch Scores again. (I also need money to move, but one step at a time.)