Conservative MP Mark Garnier has raised concerns that banks are unfairly using the data they hold about accountholders’ financial affairs to undermine IFAs.
Speaking at a Treasury select committee session last week, MP for Wyre Forest Garnier said banks are using information about clients’ current accounts to target product sales.
He said: “This data is not just about banking, it is about IFAs and insurance companies. It gives banks a monumental advantage. If you talk to the average IFA, they are pretty unhappy about banks undermining them because they know exactly what people’s habits are.
“They have access to this data that is not available to anyone else and they are using it, to my mind, unfairly.”
Garnier was responding to comments from Financial Services Consumer Panel chairman Adam Phillips who said that he was contacted by his bank as a result of data in his current account.
He said: “My bank manager, who I had not heard from in a decade, rang me and said ’I see you have a lot of money in your account, I wonder if we can help you’. Holding a database of how customers spend their money and how much free money they have, is a very useful asset.”
Which? chief executive Peter Vicary-Smith said banks should not complain about the cost of running current accounts because of the value gained from data they provide.
He said: “They get an enormous amount of data they can use. If I was looking at it as a businessman I would probably be quite happy to have current accounts as a loss-leader because of all the other things they enable me to do.”