The drive to encourage people with bank accounts to switch to better deals is working well, according to the regulator – but consumer confidence in the process remains low.
The current-account switching service is designed to complete all switches within a week, and the Financial Conduct Authority (FCA) said the vast majority of switches had taken place on time and without error.
It also found that most people who had used the service said they’d had a positive experience. But it added that a lack of awareness of the scheme and low confidence amongst those who haven’t used it needed to be tackled.
“If we want to encourage consumers to switch their bank accounts then it is important that the industry makes it as easy as possible for them to do so,” said the FCA’s Christopher Woolard.
“Making sure that the systems that already exist work well will help bring consumers’ confidence that switching can be simple and error-free.
“More needs to be done to raise awareness of the tools which already exist to enable customers to move around.”
Sylvia Waycot, of Moneyfacts, said: “The old joke of ‘I’ll move my overdraft elsewhere’ comes from the fact that many people actually move current accounts because they are unhappy with the service they receive.
“The FCA’s finding that those who have used the current-account switching service have been happy with the results is to be applauded, and increasing the awareness of the service will without doubt benefit consumers.
“However, current accounts are still complicated products that are hard to compare – and this must be addressed with equal zeal.
“Now that consumers can switch with the greatest of ease, it’s time for banks to focus on retaining their customer base with excellent service. If not, they can watch their customers head for the exit.”
Kevin Mountford, of Moneysupermarket, agreed.
He said: “The current-account switching service is working for those who have used it, and it is encouraging that no real detriment to consumers has been found.
“However, there is clearly more work to be done to encourage more people to switch their bank accounts, starting with the products on offer.
“Apart from a small number of providers, there has been very little innovation in the market, so there isn’t much for consumers to look for when trying to differentiate between the products on offer.”