British Banks are making it easier for investors to change current account provider.
In 2007, only 6 per cent of bank customers changed their accounts, while 20 per cent of energy account customers switch every year. All this may soon change, however, thanks to a £2 billion undertaking; the new system will strike a balance between the present system and full account portability, which would allow investors to move their bank account to a different provider.
It will facilitate new entrants into the market, responding to the Independent Commission on Banking’s (ICB) concerns about the current lack of serious competition and “ring-fenced” - in George Osborne’s words - operations. The interim report criticised the lack of information available to UK investors and how overly-complicated and time-consuming it was to move banks, which naturally discourages consumers from making the effort to find a better deal.
Under the proposed system, the banks will form a joint database of account details, preventing any mishaps with utilities or bills and removing the biggest difficulty presented by changing current accounts - arranging all their new information for direct debit issuers.
These proposals still have to be put to the ICB, and will take roughly two years to set up according to Lloyd’s and Apacs.
