Switching accounts should be as easy as downloading an app says YBS chief

Chief executive Chris Pilling called on City regulators to tackle the “vested interests” of the big banks and speed up the switching service to encourage more competition in the financial services sector.

He made the comments as Britain’s second biggest building society reported annual results showing record net mortgage lending in 2014, its 150th anniversary year.

Mr Pilling said: “We are frustrated that despite broad consensus in on encouraging challenger institutions, there is little evidence of meaningful progress.”

He claimed that just 3 per cent of accounts have been switched since the introduction of the seven-day switching service in September 2013.

Mr Pilling said the service has failed to tackle the dominance of the big banks and raise the quality of the current account market.

He believes that switching accounts should be as simple as buying a holiday online and said there would be “a national outrage” if supermarket customers were unable to switch between the main grocers.

Mr Pilling added that the group enjoys strong customer feedback but is “looking for stronger signals” before expanding its current account offer.

A spokeswoman for the Financial Conduct Authority told The Yorkshire Post: “We are currently reviewing the effectiveness of the Current Account Switch Service and looking into other options to make switching easier for current account customers, such as account number portability.

“We expect to report back shortly with our findings.”

A spokesman for the Payments Council said 1.5 million people have moving from one provider to another since the service was launched.

He added: “Research shows that 88 per cent of people who have switched found it was quick and involved very little effort on their part, which suggests that the switch process itself is no longer what’s stopping people shopping around.”

Yorkshire Building Society acquired a current account service through its merger with Norwich and Peterborough in 2011.

Annual results for 2014 show a 32 per cent rise in net lending to £2.6bn and an 18 per cent rise in core operating profits to £178.8m.

Pre-tax profits fell 5.5 per cent to £188.2m, which Mr Pilling attributed to an accounting technicality. The first half of the year was stronger than the second for the group, as regulatory changes and economic uncertainty dampend demand for mortgages.

The mutual was hit by two fines last year from City watchdogs, including a £4.135m penalty for for failings when dealing with mortgage customers experiencing payment difficulties; the largest to date to be levied on a building society.

It was also fined for misleading inexperienced customers over investments that had almost zero chance of achieving maximum returns.

Mr Pilling said the experiences served as a reminder to stay “focused on putting the customer at the heart of the business”.