- Widespread FX markups contribute to low trust in banks – with just 22% believing their bank gives a ‘fair deal’
- HSBCcharges highest hidden markup, despite recent launch of Zing
19/01/24, London Barely a fifth of Brits trust their bank to give them a fair deal, a situation exacerbated by hidden FX fee markups, according to new research by Wise, the international money account.
New research shows that major UK high street banks charge a hidden fee in its exchange rate*. HSBC charges the highest, with a 3.7% hidden markup. The bank recently launched Zing, a new product that is transparent about its fees – but HSBC does not offer this transparency to its existing customers.
The widespread use of hidden fees is contributing to a breakdown in trust between Brits and their bank. Independent research by Censuswide**, which surveyed 1,000 Brits nationwide, finds that only 22% of Brits think their bank gives them a fair deal across products and services – this isn’t helped by nine-in-ten (90%) stating that banks tend to mark up exchange rates.
Wise is therefore renewing its longstanding call for banks to be transparent about their FX fees.
As of December to January 2024, each of the following banks charges a hidden fee :
- HSBC charging 3.7%
- Lloyds Bank 3.6%
- Barclays 2.75%
- NatWest, TSB, Santander all 2.5%
Barclays and Lloyds Bank play-act at being transparent by offering a hard-to-find disclaimer that details the hidden fee as a markup, something the other banks avoid. Newer banks and providers do, however, offer transparency. Starling and Monzo are completely transparent about their fees, so too Zing.
While the problem may seem niche, its impact is huge. Research projects that consumers lost £180bn globally in a single year to hidden fees, as banks profit from consumer confusion and industry opacity***.
Research shows that 42% of Brits send or receive cross-border remittances. Of these respondents, 52% say the remittances they send are vital to their overseas family and community’s well being – while 15% rely on receiving remittances to support their day-to-day life in the UK.
Furthermore, while 88% of Brits holiday overseas, only 14% 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.
Kristo Käärmann, CEO and Co-founder, Wise, said:
“For thirteen years, we’ve challenged banks to come clean about their fees. 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.
“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 quite cynical. It’s time banks were transparent about exchange rates, and for hidden fees to finally become a thing of the past.”
*Research undertaken between December 2023 and January 2024, based on sending £1,000 (GBP) to EUR
**All polling in release undertaken by Censuswide – 1,000 adults from across UK polled, January 2024
***Research commissioned by Wise and independently conducted by Edgar, Dunn and Company
About Wise
Wise is a global technology company, building the best way to move money around the world. With the Wise Account, people and businesses can hold 40 currencies, move money between countries and spend money abroad. Large companies and banks use Wise technology too; an entirely new cross-border payments network that will one day power money without borders for everyone, everywhere. However you use the platform, Wise is on a mission to make your life easier and save you money. Co-founded by Kristo Käärmann and Taavet Hinrikus, Wise launched in 2011 under its original name TransferWise. It is one of the world’s fastest growing, profitable technology companies and is listed on the London Stock Exchange under the ticker, WISE.
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