Seven-day switching could be "damp squib"
New rules mean that from today switching your current account should be quicker and easier.
Led by the Payments Council, the Current Account Switch Service launches today; it guarantees any switch will take no longer than seven working days. Thirty-three banks and building societies will initially be involved in the scheme, and it will roll out to smaller banks and building societies in 2014.
The service will now be standardised in order to reduce the time it takes to switch, but there is mixed opinion as to how much take-up there will be by consumers.
As Money Observer recently reported, Metro Bank has estimated that the volume of switches could increase by 90% in the coming years. It has even doubled the size of its switching team in anticipation of the expected rise in demand.
However, research from online experience expert Foolproof suggests the new rules will have little effect. Peter Ballard, managing partner of Foolproof, says: "British banks are kidding themselves if they think the new current account switching rules will herald some sort of new business bonanza."
Foolproof's research found that 46% of current account customers believe switching is not worth it because "all banks are the same". Almost half (48%) say customer service is the biggest factor in determining whether they switch, and 36% believe an easy to use online banking service is the most important consideration.
Ballard says banks need to focus on customer experience to ensure the launch of the new rules is not a "damp squib". He explains: "A high proportion of customers says they find it impossible to differentiate between difference banks' current account offerings. There's also a clear mismatch between the high priority customers place on service, and the inability of banks to deliver, or even articulate, this effectively."
This article was written for our sister website Money Observer
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.