NatWest: what does 'Fairer Banking' really mean?

The bank is campaigning for 'Fairer Banking' to become the norm, but what does that mean in practice?

NatWest has spent the last 18 months talking about 'Fairer Banking' pledging to overhaul its products and go back to basics.

But what does that really mean?

What is Fairer Banking?

According to NatWest, in practice Fairer Banking means treating new and existing customers equally, no matter how they bank, and offering simple, transparent products that aren’t designed to catch people out.

This might sound like a no-brainer, but this sort of philosophy isn’t particularly widespread in banking.

Normally it’s new customers and those that bank online that are offered the best deals on things like credit cards and savings, rather than existing customers or those who prefer to bank in a branch.

There’s also a prevalence of ‘teaser rates’ in the industry, which always carry a sting in their tail.

On savings accounts this will take the form of a temporary introductory bonus which artificially boosts a return for a short period, before falling away. While on 0% balance transfer or purchase credit cards, this means interest-free deals lasting between a few months and a few years before interest kicks in.

The case for change

When it comes to savings accounts some argue that introductory teaser rates lull savers into believing they are earning a great return, when in reality it’s short-lived.

Typically an introductory teaser rate will drop after 12 months leaving savings earning much less. The problem is banks aren’t very good at reminding customers when their teaser rate is coming to an end. So savers that don’t cotton on and switch are leaving their savings languishing in what become ‘zombie accounts’.

Likewise with credit cards, 0% introductory offers can give borrowers a false sense of security that they are safe from interest on their spending or balance transfers, when in reality the cards are potentially a ticking timebomb.

Again providers tend not to provide much warning when deals are about to end and offers can get cut short if you miss a payment or accidentally exceed your balance.

What do fairer products look like?

NatWest departed from this way of doing things last year and pledged to make banking ‘simpler, smaller and smarter’.

Existing customers now get the same or better deals as newcomers no matter how they bank and significantly the bank has banned introductory teaser rates on savings accounts and credit cards.

NatWest has four simple credit cards in its range. You can choose from two cashback credit cards or a low-rate credit card, all with an annual fee, or a fee-free student card. 

The bank has also streamlined its range of savings accounts and now offers just seven products without an introductory bonus rate in sight. These include an instant access account, two fixed rate savings accounts, three Cash ISAs and a children’s savings account.

The benefits of fairer banking

NatWest’s commitment to Fairer Banking means you can ensure that staying loyal means you get treated just as well as new customers and you won’t have to worry that using a branch means you lose out.

Fairer Banking won’t be for everybody, though. If you’re a rate chaser or watch your credit card offers like a hawk you probably don’t need the sort simple and transparent option NatWest has created.

But if you’ve ever been caught out by an introductory teaser rate on a savings account or credit card when you weren’t looking, you might enjoy the peace of mind you can get with NatWest.

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