15th October 2014
More than 1.2m people have switched their current account provider since the Payments Council run Switching Service launched 12 months ago.
The Current Account Switch Service initiative, which launched in October 2013, slashed the time it took to change bank which previously took anywhere between 18 to 30 days, to just seven.
In the 12-months to the end of September there were 1,203,334 switches according to the Payments Council, representing a 22% increase on 985,600 transfers made in the previous year.
Gerard Lemos, executive chairman of the Payments Council, said: “By making switching bank accounts easier for customers than ever before – with the added peace of mind delivered by the Current Account Switch Guarantee – we have created the perfect conditions for competition and choice to flourish amongst new and existing current account providers. These latest figures clearly suggest that the good news is getting through to all those customers who want to change provider – that there has never been a better time to do it.”
The Payments Council also said that more than two-thirds of people, at 69% are now aware of the service, up from 60% in October 2013 and that customer confidence in the service increased, albeit only slightly from 61% to 62%, over the same time period.
The data also revealed that Halifax, Santander and Nationwide are the clear winners over the past 12 months. Commenting on the numbers Kevin Mountford, head of banking at MoneySuperMarket said: “It’s great to see that a building society is able to compete with the big banks. In terms of losers, NatWest and Barclays are at the bottom of the pile, highlighting the fact that recent IT glitches and mis-selling scandals have caused customers to act and vote with their feet.”
Andrew Hagger of Moneycomms noted that both Halifax and Santander have advertised heavily on TV and offer attractive current account packages, particularly to those customers who always remain in the black he said, adding that the combination of a £100 golden hello and £5 monthly reward from Halifax looks as if it has struck a chord with customers looking to get something tangible in return for their custom.
He said: “Santander is pulling in big numbers too despite charging £2 per month for its 123 current account. The ability to earn cashback on direct debits will more than wipe out the account fee for many customers, whilst the 3% rate on balances from £3k up to £20,000 is no doubt a big plus point, particularly with savings rates in the doldrums. To get 3% on your savings at present means having to tie your cash up in a fixed rate bond for 5 years (Tesco Bank 3.10%) but with Santander you’re getting a double whammy of generous interest and instant access to your cash.
“The best instant access savings accounts are paying 1.60% and 1.50% and most include an introductory bonus too – it’s no wonder more people are using their bank account as a home for their everyday savings. It will be useful to see the switching stats from Tesco Bank and TSB in due course to see whether their enticing credit interest strategies are winning new business too.”