A new report issued by the Financial Conduct Authority (FCA), indicates that a large majority of bank customers do not know that there is a seven-day service available for switching bank accounts. The regulator also found that many of those people who had heard of the service were not confident in it.
The FCA have, therefore, concluded that unless more is done to publicise it, the service is likely to have a restricted impact. One suggestion in the report was that banks should be far more proactive in terms of marketing campaigns designed to raise consumer awareness of the scheme.
Since September 2013, a total of 1.64 million customers have opted to switch over their current accounts. However, this figure is well short of the peak of 105,803, reached in November 2013. This compares with just 19,625 people who switched in February this year.
The Director of Strategy and Competition at the FCA, Christopher Woolard, has stated that awareness surrounding account switching needs to be raised. The FCA also believe that the process would be made far simpler if customers were able to keep their existing account numbers.
The industry as a whole has been looking into the viability of ‘portable’ bank accounts for some time now. However, there is, as yet, no firm time frame within which this might happen.
The FCA did emphasise that the switching service was working smoothly for those customers who had decided to take advantage of it. Furthermore, the industry has committed to improving the service further, to make it a more attractive proposition for customers.
The service is run by The Payments Council, which has announced plans for new advertising campaigns designed to raise both confidence and awareness. Five of the main high street banks now offer a cash incentive of up to £150, designed to persuade customers to switch accounts.