Economy
‘Payback time’ for big banks, as launch date for switching service announced
The official launch date for the new service that allows people to switch banks in seven working days has been announced as Monday September 16.
The Payments Council, the body that is organising the service, revealed that it will come into effect in just over four weeks’ time.
Chief executive Adrian Kamellard said, “After two years of work and commitment by the Payments Council and financial institutions to develop this new standardised switching service, today marks a significant day for all parties involved.
“There is now just one month to go until the launch of the current account switching service and as final preparations are made for launch we look forward to a new era of account switching which will lead to greater choice for customers and wider competition in the marketplace.”
Some 33 banks and building societies, making up most of the account marketplace, will offer the new switching service for consumers, small charities and small businesses. It is thought that the £750m government-backed service will increase competition in the market and loosen the grip of the big banks that dominate the market.
Campaign group Move Your Money revealed in June that in 2012, some 2.4 million people closed accounts with the big five – Barclays, HSBC, Lloyds TSB, NatWest and the Royal Bank of Scotland (both owned by the RBS Group) and Santander.
Move Your Money has led a long campaign calling for savers to “make a positive decision” about where to put their money when the switching service is launched. It says that the banks have failed consumers, and the only way to force change is for savers to leave the high street for more ethical and socially responsible alternatives. Now that the official launch date has been announced, Move Your Money says it is “payback time.”
“With seven-day switching becoming a reality, no longer do we need to put up with bad banks, outrageous bank charges, poor customer service and cash-points that crash when we try and access our own cash”, said chief executive Laura Willoughby.
“Neither should we remain with the banks we’ve had to bail out with our taxes for the crisis they created, or stick with those that rigged interest rates through Libor, or mis-sold us PPI. They do not deserve our loyalty, never mind their massive bonuses.”
According to statistics released in July by uSwitch.com, as many as 42% of current account holders are likely to change providers when the switch service is launched.
Similar research by YouGov from October 2012 found that 14.1 million high street banking customers might ditch their providers if they believed switching was easy.
Further reading:
Bank customers reveal switching fears – but 80% say process is easy
Government backs £750m IT system to make switching banks simpler
42% will switch banks in September, claims new survey
Big five’s banking monopoly at risk, with 2.4m closing accounts in 2012
The Guide to Sustainable Banking 2012