Service sees rise in current account switches

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Some 1.1 million current account customers have switched provider – using a service aimed at taking the fear factor out of moving to a new bank – in the first 11 months since the initiative was launched.

The number of switches which took place between October 1 2013 and August 31 this year represents a 19 per cent increase on the number of current account switches recorded during the same period a year earlier, the Payments Council said.

The figures were contained in a progress report into the current account switch service, which launched on September 16 last year.

The service allows people to ditch their old bank and move to a new one in seven working days, instead of up to 30 working days previously.

Outgoing and incoming payments are also automatically moved over to the new account.

The Payments Council, which commissions monthly surveys of more than 2,000 consumers to check awareness and satisfaction levels around the switching service, said 70 per cent of people had heard of the service and 61 per cent were confident about what it was and how it worked.

Some 88 per cent of consumers who had switched accounts felt it took very little effort on their part.

The Payments Council is measuring the success of the scheme on awareness and confidence rather than the number of switches, as some people may be happy with their existing bank and may not want to switch.

A target that 75 per cent of people should be aware of and confident in the service has been set for the end of June next year.

The service, which covers almost all of the UK’s current account market, can be used by small businesses and charities as well as consumers.

Banks often use their relationship with current account customers as a basis to sell them other products. There have been signs of competition ramping up.