Current account switching isn't going to plan
Not enough people are aware of a new service that makes it easier to switch current accounts, despite more than 1.1 million customers ditching their old bank and moving to a new one in the last year, figures show.
Figures released by Bacs show that between July last year and June this year, 1,109,381 current account switches took place - a 4% increase on the previous 12 months.
Despite the upswing, consumer research across the UK found that 69% of people had heard of the current account switch service, while consumer confidence in the service was at 64%. These figures are below a 75% target for customer awareness and consumer confidence, set for the middle of this year.
The current account switching service was launched in autumn 2013. It was previously overseen by the now-defunct Payments Council and Bacs took over the service earlier this year.
The launch of the service has cut the length of time it takes to switch a current account from up to 30 working days to just seven. All outgoing and incoming payments are automatically moved to the new account. Payments accidentally made to or requested from the old account are automatically redirected to the new account for 36 months after an account is switched.
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Customers using the service are guaranteed not to be left out of pocket if anything goes wrong with the service, which is managed and owned by Bacs, the company responsible for direct debit and Bacs direct credit in the UK.
A statement from Bacs said: "While we only took over responsibility for delivering against these targets in March of this year, we are a little disappointed with the latest figures and we are working with our participating banks and building societies to ensure that the current account switch service and its guarantee are highly visible within the high-profile press and TV advertising campaigns they use to promote their current account offerings."
Despite awareness being below target, it is still up on the 58% of people who knew about the scheme when it was launched.
The figures also show that more than two million current account switches have taken place since the service was launched in 2013.
Figures released voluntarily by current account providers show that in the fourth quarter of last year, Barclays made a net loss of 28,000 customers using the switching scheme, while NatWest lost 16,000.
Santander, which offers an innovative 123 current account offering cash back as well as in-credit interest, made a net gain of more than 45,000 customers between October and December, and Halifax, which offers customers £100 to switch, gained more than 40,000 customers.
Nationwide Building Society, which has a current account paying 5% interest, and newer player Tesco also made net gains.
The figures provided by current account providers only include personal customers, small businesses and small charities which have switched using the guarantee under the seven-day switching service. Customers who chose not to use this service were not included in the data.
A statement from Barclays said: "The switching service works well for customers, however there is still considerable account opening and closing outside of the service. In fact, we continue to open more current accounts each month than we close.
"Today's figures illustrate how important it is to continue to evolve our products and services for our customers. We have recently launched Barclays Blue Rewards to give new customers a great reason to switch to us and existing customers a great reason to stay and we are delighted with the level of interest to date."
Here are the net gains made by current account providers in customers completing the current account switching service between October 1 and December 31. Customers who did not use the service were not included in the figures:
:: AIB Group (UK), minus 1,002
:: Bank of Ireland (UK), minus 529
:: Bank of Scotland, minus 797
:: Barclays, minus 28,483
:: Clydesdale Bank, minus 4,829
:: Co-operative, minus 6,233
:: Danske, minus 440
:: Halifax, 40,094
:: HSBC, minus 7,744
:: Lloyds Bank, minus 13,199
:: Nationwide, 4,157
:: NatWest, minus 16,171
:: RBS, minus 11,293
:: Santander, 45,633
:: Tesco, 2,017
:: TSB, minus 2,697
:: Ulster Bank, minus 1,362
