New legislation, that makes it easier for people in the UK to switch to a different bank, has led to an increase of 4% in those switching over, according to new data released by Bacs.
The latest figures show that 1.1 million people opted to switch over in the year to June, compared with 1.06 million the previous year.
The new changes, which came into effect in October last year, guarantee that customers can switch their accounts over to a new bank in seven working days or less. During the period of transition, both incoming and outgoing transactions will be transferred automatically. According to research carried out by Bacs, 69% of people living in the UK now have an awareness of this service, up from 58% when it initially launched.
These new rules form part of a range of guidelines that have been implemented to try and reduce the dominance of the main banks in the UK – Santander UK, RBS, Lloyds, HSBC and Barclays – which, between them, currently hold over four fifths of personal accounts.
The competition watchdog is looking at issues of competition in the sector, and it is thought that it will publish the results of its investigations towards the end of September this year.
The Competition and Markets Authority (CMA) stated late last year that they believe that banks have not yet gone far enough in terms of meeting the requirements of their small business or retail customers. It may suggest that, to increase competition, the big five banks should be broken up.
Santander enticed more customers than any other bank to open a new account, and next in line was Halifax (which falls under the Lloyds umbrella). NatWest (RBS), Barclays and NatWest lost the greatest number of account holders.