Consumers likely to give thumbs down to UK government's bank switch scheme: Report
16 September 2013
The UK government is backing an initiative to enable customers transfer their existing current accounts from one bank to another within seven working days.
However, according to a Sky News report, citing exclusive research commissioned by it, the public is largely not aware of the plan and among those who are aware, the government's initiative seems unwanted.
From 16 September the so-called 7-Day-Switch scheme would come into effect, customers wanting to swap banks can provide their preferred lender with personal details.
The bank would then make all the arrangements to bring across salary deposits and bill payments with a hassle-free guarantee.
In a move to revitalise competition in high-street banking, chancellor George Osborne confirmed the plans back in February after the regulator showed the meagre choice existing in the current account market.
However, in a poll of over 2000 bank customers, 44 per cent of those surveyed said they had never heard of the service.
Of those who had, 53 per cent said they would not consider switching even with guarantee in place.
That was perhaps due to 82 per cent saying they were happy enough with their current account, another indication that the initiative was not needed by many.
Commentators say people's reluctance to change banks meant that many consumers still had the account they opened when they were students, or even children.
They says chances were that though it might have offered some benefits in the past, people were left with a bank account that did not match their current financial circumstances.
Having the wrong current account could lead to hundreds of pounds of bank charges a year and also frustration at poor customer service and an inability to bank in a way that they find convenient.
Conversely, having the right account could be financially rewarding – especially thanks to a range of fresh incentives launched by many banks to try win over rivals' customers.
Unlike household products such as car insurance and energy, where switching providers was already common, comparing current accounts was extremely difficult.
Every bank offered slightly different benefits and charged customers in a slightly different way and to make matters even more confusing, many offered accounts with an annual fee that included a suite of additional benefits, which were often known as "packaged accounts" because they bundled together travel insurance, breakdown cover and other items that one find attractive alongside a current account.