Former chief of OFT slams banks for failing their customers

Former OFT chief John Fingleton stated that major banks are not taking the time to properly understand their customers. The former head of the Office of Fair Trading stated openly that big banks are failing SMEs.

Fingleton had his own experiences with the banking system when he attempted to set up a bank account that his own small business could use. He said that if the banks are going to help stimulate the economy instead of depressing it further they are going to need a shakeup.

He wrote in the Financial Times that you hear about banks that act as casinos that will not lend out money, but he believes the case is even worse. According to Fingleton the main problem with banks is that they are not being run like banks. He believes that central controls have replaced staff judgement and he found products still being pushed on him even after the interest rate swaps and payment protection insurance scandals.

Fingleton explained that he failed to open accounts at Santander, HSBC, and Barclays before he choose to try out some small banks that operate on the UK scene such as Handelsbanken the Swedish bank and US based Metro Group. While these banks are small, they are getting more and more of the banking business since they are ensnared in many of the scandals that the larger banks are being tainted by.

Fingleton continued to say that centralizing decision-making and standardizing bank practice in the long run has ironically turned out to be counterproductive for both the economy and the banks because they are no longer able to use common sense to determined if a business is a bad credit risk or a high growth business. He added based on his own experiences it is no wonder that the UK productivity figures are so low.