Consumers Are Unaware of Bank Account Switching Service
The Financial Conduct Authority have revealed that people are not fully utilizing the service which allows customers to switch their bank account due to the fact that they are unware of the seven-day facility and also lack the confidence to follow through with it.
Since September 2013 1.64 million consumers have switched their current account but the amount of people doing so, and taking advantage of better rates elsewhere, reached its zenith in November 2013 and has gone down since.
In that November a total of 105,802 moved to another current account which is significantly more than the 91,615 that did so in February 2015.
The Financial Conduct Authority went on to state that this trend will continue and the service, designed to benefit the customer, will have a relatively limited influence unless there was greater campaigning to increase awareness of it. They went on to implore banks to invest in marketing strategies to achieve more awareness.
The director in strategy and competition from the Financial Conduct Authority, Christopher Woolard, commented on the report: ìMore needs to be done to raise awareness of the tools which already exist to enable customers to move around.î
One of the recommendations that come out of this news is the notion of ìportableî current accounts. The Financial Conduct Authority put their weight behind this idea and argued that if consumers were allowed to hold on to their current account numbers it would ensure the switching process was much more expedient and attractive.
The concept of a bank account number that each customer could hold on to has been an idea in the banking industry for a number of years, yet there is no sign it will be introduced in the near future.
The Financial Conduct Authority went on to defend the facility which aids customers switching bank accounts, arguing that for those who did take advantage of it were benefitting a great deal.
The company which runs the facility, the Payments Council, have pledged investment to ensure an increase advertisements and marketing schemes in order to raise greater awareness and enhance consumer confidence in the product.
Whilst the banking industry has pledged resources in order to the facility more attractive, they refer to the fact that there are already five banks that provide cash incentive schemes, amounting to as much as £150, in order to persuade customers to switch from their current bank accounts.