A government-backed comparison service for bank accounts went live this week – but are you brave enough to use it? The Midata scheme aims to give a huge push to current account switching by providing people with instant, personalised information on exactly how much money they could save – or earn – by moving to another bank or building society.
It means that, for the first time, bank customers can, with little more than a few mouse clicks, feed their details into a comparison website and view a table of all the options available, tailored to how they manage their finances.
But for the calculations to be done, you have to hand over your last 12 months’ bank statements to Gocompare.com, the comparison site probably best known for its TV adverts featuring fictional opera singer Gio Compario.
The personalised table shows you, in pounds and pence, the costs and benefits of each account – ie, any fees and charges you would be likely to incur if you switch, based on how you have used your existing current account over the past 12 months, plus any benefits such as in-credit interest, free cash to tempt switchers, and cashback.
In theory, the results could not be more accurate, because they are based entirely on your own personal data. However, Gocompare is the only website so far signed up to offer the facility.
To access your Midata file, you need to log into your online banking and click on the Midata button to get 12 months of your statements downloaded to a CSV file (similar to an Excel spreadsheet). You then need to open the Gocompare Midata comparison page and click the green button to select your file, or drag and drop the CSV file into the upload box so the site can do the number-crunching.
Bank statements obviously contain reams of highly sensitive personal information, and it would be a disaster if they fell into the wrong hands, so various safeguards have been put in place, says Gocompare. The files have no identifying information about account holders – names, addresses etc – as this will all have been “redacted” (though the names of retailers etc are not removed). Furthermore, the data used in a Midata comparison search is encrypted then “purged” at the end of the process. Gocompare says it won’t be able to read the data, adding that it will not be kept or used for any other reason than to carry out the necessary calculations.
Nevertheless, some people will inevitably be nervous about handing over their personal data, even in an anonymised form, to a comparison website because they will worry about what might happen if the information was lost, stolen or misused.
To begin with, only customers of the “big five” banks – Barclays, HSBC (including First Direct and M&S Bank), Lloyds (including Halifax and Bank of Scotland), Royal Bank of Scotland/NatWest (including Ulster Bank) and Santander – plus Nationwide building society will be able to access their Midata files.
Once the customer has uploaded the data, the comparison tool looks at all the accounts on the market (standard, basic and packaged) and presents the individual with a personalised table showing how much money they could save – or earn – by moving to another bank or building society account. It will do this by making around 1,500 calculations and examining more than 30 types of transactions, including overdraft fees, in-credit interest and overseas charges.
You won’t be able to access the service via an iPad and some other mobiles/tablets, because it will only work on devices that support CSV files. However, some tablets do support these, so it’s not a “no” across the board.
Martin Lewis, founder of MoneySavingExpert.com (now part of MoneySupermarket Group, a rival of Gocompare), has given a commitment that he will look at signing up to Midata, but believes the government has launched the service “before it’s truly ready”. He says he wishes Gocompare well, but adds that the service will offer a better user experience once people are freed from having to download, and then upload, their bank data.
Does it work?
Money asked a Guardian staff member to test the service. The process was a little clunky, and you need to be fairly competent at moving files around on your computer.
When he logged in to his bank the Midata link was barely visible in the bottom right-hand corner of the page, but once he found it the download was very quick. He then had to log in to Gocompare, which didn’t make it ultra-obvious where to begin the process.
Once he clicked on the Midata part of the site, and uploaded his file, the table came up almost immediately. So what did it tell him? Apparently, Coventry building society’s Coventry First account offered the best deal for him, largely because it pays 1.09% gross interest on balances up to £250,000 for the first year, then 0.25% or 0.85% after that. It also recommended Yorkshire bank and Clydesdale bank accounts because of a £150 switching incentive, while Halifax came fourth with its £125 switching incentive and the cashback it offers.
Intriguingly, his Lloyds account managed a respectable fifth place (out of 70 accounts). His snap reaction was that it wasn’t worth moving to another account simply for a one-off switching incentive or a bit more interest.
