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RBS says it uses data to help sales

Royal Bank of Scotland has defended using information from customers’ current accounts to increase sales of financial products.

Giving evidence on competition and choice in the banking sector this week to the Treasury select committee, RBS head of retail banking Brian Hartzer said: “The information we have been provided in the case of people leaving lazy balances, if you can call them that, in their current account is an obvious thing we can talk to customers about, including how we can help them with a better savings option.

“Our objective is to broaden the relationship with customers and part of that is being able to figure out how we can help them in other ways.”

Treasury select committee member Mark Garnier sugges-ted last month that banks were using the account information “unfairly” to undermine the role of IFAs.
Garnier questioned Hartzer about claims from Tesco Bank that big banks are sharing account information within a closed group. Garnier suggested that the big banks operate as a “cartel” to keep smaller operators from entering the market.

Summarising Tesco’s evidence, Garnier said: “The established banks routinely share account data on income and expenditure as well as wider product holdings through a closed user group, which only those members with a sufficiently large current account base as determined by the bank members themselves can access.

“That is the whole point of cartels, if you can do this among yourselves then you can exclude smaller players coming into the market.”

Hartzer said he is “unaware” of any such operation, adding he could not see why a bank would share that data with competitors.

He said: “The only sharing of individual customer data that I am aware of is through third-party credit bureaux which are available to credit providers who choose to pay for it.”

In his evidence to the committee, Tesco Bank chief executive Benny Higgins stood by the bank’s written evidence, saying there is “unequivocally a closed user group” with an eligibility condition of holding one million current accounts.

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