New current account comparison tool launched

Posted by Michael Bolt in Banking on 1 April 2015 - Michael worked as a Credit Analyst at checkmyfile until 2015

A new government-backed comparison tool that allows customers to use their own personal data to find the best current account for them was launched on Thursday.

The ‘Midata’ online tool allows customers of the big five banks: Barclays, HSBC (including First Direct), Lloyds (including Halifax and Bank of Scotland), Royal Bank of Scotland/NatWest and Santander, as well as Nationwide, to use the information contained on their bank statements to compare a range of current accounts currently available on the market and to highlight the best one for them.

The free service analyses data contained on an individual’s last 12 months bank statements and offers a uniquely definitive and scientific analysis of which current account would be best suited for them.

The government has linked up with the comparison website, GoCompare, to offer the current account comparison tool, with GoCompare the only comparison site currently offering the service.

‘Midata’ is a government initiative first announced in 2011 to give consumers greater access to electronic records of their past buying and spending habits - with the overall aim of helping consumers to make better financial decisions. It is expected that ‘Midata’ will available for others products/services in the future: including energy suppliers, credit cards and mobile phones.

To use the comparison service, an individual that holds their current account with one of the eligible banks simply has to login to their online banking. They can then download a file from their bank, (a CSV file - similar to a spreadsheet) which contains their last 12 months bank statements. This file can then be uploaded onto the GoCompare website to be analysed, to identify the best current account for them.

Once the data is analysed an individual will be presented with a table, displaying how much money they could potentially save by switching to another bank. The tool uses an algorithm that exams a range of different transaction types including overdraft fees, average in-credit interest among others and then presents customers with the most suitable account in terms of cost.

There has been some signs of controversy over the handing over of bank statement data to the comparison website, however GoCompare has sought to ease these concerns. It said that the file containing the bank statement date will not contain identifying information such as names or addresses, as this will be redacted by the bank.

The City Minister, Andrea Leadsom, has also sought to assuage concerns, stating that, “The banking industry has worked closely with the government and the Information Commissioner’s Office to make sure safeguards are in place”.

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