THE Chancellor of the Exchequer, no less, has been singing the praises of what’s being called a new era of competition and choice for Britain’s 49 million current account holders, who can now ditch their old bank and switch to another one in seven days flat.
The new system takes the pain out of transferring payments, and puts the onus on the incoming bank to tell all the payees what’s going on.
Given that it used to take a month to change banks, and involved a process so complex that few bothered to try, this is a step forward, and certainly helps to explain the sudden rash of account-switching incentives (up to £125) being advertised by the likes of First Direct, the Halifax and M&S Bank.
But in an age of instant, online transactions, many will wonder why it should still take a week to switch. The fact is that most of our banks are years behind their American counterparts when it comes to online service. That’s why a number of third-party services have stepped in.
The latest of these is OnTrees (www.ontrees.com), which joins the ranks of so-called bank account aggregators that also include moneydashboard.com and lovemoney.com. All these are modelled on the successful US service Mint.com, which loads data from all your accounts, and displays them on your PC or phone in a single chart or graph.
Your transactions are pulled in automatically, so you no longer need log into your banks’ sites individually. In America, the financial world has embraced the convenience of this facility but in Britain official reaction has been muted. The big banks don’t like you passing your details to these aggregators and could, in theory, hold you in breach of their terms and conditions. Opposition is fading, though.
None of the aggregators let you actually transfer money; this limits their functionality but increases their security.
Meanwhile, if you’re unhappy enough with your bank to consider moving away, don’t do it solely on the basis of the current incentive offers; consider the longer-term rates. For customers who tend to stay in credit, the MoneySupermarket website puts Lloyds’ Vantage and Santander’s 123 accounts at the top of the list, with interest currently up to three per cent.
And here’s the good news: if they change their minds, so can you.