Santander has announced that it plans to scrap its packaged accounts later in the year as it concentrates on improving its customer service.
Around 20% of adults in the UK have paid-for accounts, which typically include additional perks such as travel or breakdown insurance for a monthly fee.
But these have come under increasing scrutiny in recent months following revelations that some of the policies included within these accounts are unsuitable for large groups of customers.
Last year, the bank stopped selling packaged accounts twinned with travel insurance after it was revealed that the add-on policies were far less comprehensive than the separate policies sold by the bank.
And a similarly nervous Lloyds announced in December that it would stop trading in packaged bank accounts ahead of an investigation into the sector (read more).
Santander will move customers on paid-for accounts to a free Everyday current account with the option remaining to switch to the 123 account, which remains one of the most creative and profitable accounts on the market for customers with in-credit balances, albeit for a smaller fee of £2 per month.
Santander is withdrawing its packaged account range from October.
Customer Service: Improving?
Santander says this streamlining of its current account range is designed to improve its customer service. This is something the bank is clearly working hard on.
In our March editorial, ‘banks needs to simplify for the sake of their own staff’, we argued that while choice is important, the sheer range of products has proven detrimental to customer service.
There’s simply far too much information for banks’ own customer representatives to absorb – to the extent that they’re losing sight of the basics.
But credit where it’s due: the oft-maligned Santander came second out of 15 banks when quizzed for accuracy of information. And it seems to have subscribed to the view that simplicity is all important, as it prepares to strike a dozen current accounts from its list.
"Our view is that customers want even better service and a range of products that is easy to understand," said Reza Attar-Zadeh, Santander’s director of retail banking.
"Simplifying our current account and savings product range is an important milestone in helping our service get even better."
Are you a Santander customer? Have you sensed an improvement in customer service in recent months, or is this just empty rhetoric? Let us know by leaving a comment below!
Keith McDonald
Which4U Editor
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