One Million Customers see Account Details Change

Approximately one million HSBC customers have had their banking details altered. These changes are as a result of new ring-fencing rules which have been brought in to strengthen the security of Britain’s banking system.

HSBC is the first of the banks to change account numbers and sort code for 170,000 customers. The result has been significant disruption as many payments have been redirected and cards have had to be replaced.

There are concerns that this process will expose customers to the risk of fraud, as customers will have to re-enter stored payment details into online services, such as Amazon.

The new ring-fencing rules require banks to hive off consumer banking divisions from the rest of the firm’s operations. It is where customers’ sort codes link to accounts in the ‘wrong division’ that account details must be updated.

Customers will be required to update their details for online retailers and services. However, HSBC has stated that it will ensure the transfer of all direct debits and standing order. This is the standard protocol for all customers when using the banking industry’s switching service or if a customer moved to a new provider. With this volume of transactions involved, some disruptions can be expected.

It is anticipated that one million people in the UK will be affected by the preparation for the new rules coming into force.

What is a ring-fenced bank?

Ring-fencing refers to when a bank separates their high-street banking businesses from the riskier investment arms. The idea being small businesses and consumers are insulated from wholesale and trading operations. High street banking must be kept as a separate legal subsidiary.

What does this mean for me?

Sort codes assigned to the ring-fenced bank or non-ring-fenced bank might need to be changed to correct the alignment. Therefore, some customer might find their current, savings, or loan account details are amended. The affected accounts’ debit cards, cheque books or paying-in books will also be updated. HSBC has send that it will send these automatically.

What do I need to do?

  • Individuals and businesses need to be aware of the increased fraud risk and take precautions.
  • Check requests to update details verbally with suppliers
  • Small businesses need to update their payment details on invoices
  • Ensure that payments are made to the correct supplier accounts
  • Check payroll accounts have the correct and up-to-date employee details