The Payments Council has revealed that 89,000 banking customers have switched their current accounts using the new switching scheme that was launched mid-September, but consumer groups have said that the service should provide a greater array of products.
The Current Account Switching Service was launched on September 16 and cost £750m to develop and implement. Described by chancellor George Osborne as a “powerful weapon for consumers”, it meant that, for the first time, consumers were able to switch their current account in just seven working days.
The Payments Council issued an announcement on Tuesday saying that 89,000 customers had used the service within its first month of operation – an 11% increase on the same period in 2012.
Adrian Kamellard, CEO of the Payments Council, said the figures represented an “encouraging start”, adding that banks should work together consistently to provide the best possible service to customers.
He said, “It is by getting this right that we can deliver on the objectives of increasing competition and providing greater choice for customers.”
A recent report by consumer group Mintel however, claimed that one in 13 consumers had switched account providers in the last year. In comparison, this amounts to 385,000 customers per month switching accounts by other methods in 2012.
Nevertheless, the figures from the Payments Council were welcomed by consumer groups, who also called for better alternatives to the high street banks.
Laura Willoughby, CEO of the Move Your Money campaign said, “It is great that people are switching but with just 33 providers people are telling us they want more choice. We hope the announcement that the government will do more and review the payment system will allow more providers to offer current accounts and give customers something worth switching to.”
Price comparison site MoneySupermarket.com also warned customers not to be reeled in by any offers, adding that they should ensure that each product is tailored to suit individual needs.