UK banks should be ‘more transparent’ about their exchange rates says international money transfer company Wise UK as it reveals a ‘widespread use of hidden fees’.
According to research commissioned by Wise and independently conducted by Edgar, Dunn and Company, consumers lost £180billion globally in a single year to hidden fees, as banks profit from consumer confusion and industry opacity.
Wise says it is therefore ‘renewing its longstanding call for banks to be transparent about their FX fees’.
“For thirteen years, we’ve challenged banks to come clean about their fees,” says Kristo Käärmann, CEO and co-founder, Wise. “Not much has changed voluntarily. Banks still hide their markups and refuse to be transparent, because they believe hiding fees gets customers to overpay. They may be right. Not all people and business owners have the time and desire to calculate the hidden margins they are charged.”
HSBC charges the highest, with a 3.7 per cent ‘hidden markup’, says Wise. It suggests that although the bank recently launched Zing, a new product that is transparent about its fees, it does not offer this transparency to its existing customers.
“The rise of new companies that are open about fees, including Wise, shows the value of transparency. HSBC’s launch of Zing suggests they understand this too – making their refusal to come clean to their existing customers is quite cynical. It’s time banks were transparent about exchange rates, and for hidden fees to finally become a thing of the past.”
Only a fifth of Brits trust their bank to give them a fair deal. Independent research by Censuswide, which surveyed 1,000 Brits nationwide, finds that only 22 per cent of Brits think their bank gives them a fair deal across products and services.
According to Wise’s study, Barclays and Lloyds Bank ‘play-act at being transparent’ by offering a ‘hard-to-find disclaimer’ that details the hidden fee as a markup. It notes that Starling and Monzo are ‘completely transparent about their fees’, as well as Zing.
Research shows that 42 per cent of Brits send or receive cross-border remittances. Of these respondents, 52 per cent say the remittances they send are vital to their overseas family and community’s well being – while 15 per cent rely on receiving remittances to support their day-to-day life in the UK.
While 88 per cent of Brits holiday overseas, only 14 per cent check whether their bank is giving them a fair exchange rate when they spend overseas – meaning millions is being lost by British holidaymakers each year.