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What would it take to make you switch current accounts?

Two debit cards on top of each other

It’s an often quoted fact that you’re more likely to get divorced than switch your current account. But is the new seven working-day switching service going to change people’s minds?

Most people rarely switch their current accounts, if ever. In fact, our research found that 55% of people had never switched their main bank or building society account. And I admit, I count myself as one of the 55%.

There are a variety of reasons why people don’t switch current accounts. Personally, I just keep putting it off. But whatever the reason, the big banks have cottoned on to the fact that their customers aren’t likely to leave them. Safe in this knowledge, they’re often able to get away with providing bad customer service, offering poor interest rates and applying high charges.

The new seven day switching service

Under pressure from the government, the banking industry is introducing a new seven working-day switching service. From September, when customers switch to a new bank, that bank will arrange for all payments going in and out of the old account to be transferred automatically. Importantly – the bank will guarantee these payments, so any bank charges will be refunded if something goes wrong.

The current process of switching your current account can take up to 30 days, and payment transfers aren’t guaranteed. So this new, quick and easy switching service is a welcome step in the right direction.

But does it go far enough? A report from Consumer Intelligence found that only 11% of people who haven’t switched accounts before would be persuaded to switch as a result of the new service.

We want the government and the banking industry to be more ambitious. For a start, the government should commission an analysis into the feasibility of Portable Account Numbers – a system where you would always retain the same bank account number. This would make switching banks as easy as changing your mobile phone provider.

Bring something new to banking

But why is switching so important? Ultimately, simpler switching is a great way to generate more competition between the banks. But do people really want to switch to another big bank that just provides more of the same?

That’s why we think it’s important that the government makes it easier for new banks to come into the market – banks that can offer something different. It’s also why we’re campaigning for Better Banks – to make sure banks put customer service before sales.

In 2010, Metro Bank was the first new high street bank to open in the UK in over 100 years. It claims to give customers what they want through more convenient opening hours, allowing dogs in their ‘stores’ (its founder, Vernon Hill, said he doesn’t like the term ‘branch’), and it has even opened the UK’s first drive-thru bank in Slough.

I‘m glad that Metro Bank is taking a fresh approach to banking, and I hope that we start seeing more innovation from other banks. Personally, when I come to switch, I’m tempted to move to a banking provider that prides itself on its ethical values.

Have you ever switched current accounts, and if so, what tempted you to move? Would the new seven working-day switching service encourage you to switch?

Comments
Member

My first bank account was with Midland Bank and I stayed with them for about ten years and was very happy with the service. I moved to Barclays because I was promised a mortgate that I could not get elsewhere. I stayed with then for about ten years and only departed when they wanted me to make appointments to see the personal banker. Before I moved to First Direct, I tried Barclays Internet Banking but found it unwieldy when I was trying to pay off my credit cards. I have been with FD for nine years and have been really satisfied with their service. I use Telephone Banking and I get straight through to a person who then sorts my problem and sometimes chats on the topic of the day. I have recently reactivated their Internet Banking but It does not offer anything over and above Telephone Banking.

So, I do not plan on leaving my current bank but if the service deteriorates, I will walk.

Member

I started with Lloyds, went to Midland, then NatWest, now Halifax. I detest the Halifax because of their lousy support, joke interest rates, etc etc. I really would NOT want to move again.

Member

I started with Natwest, left them when they wound’d give me a loan to buy a car, moved to Abbey National, left then when they charged me for going overdrawn after one of their cash machines told me I funds which I withdrew only to find out that the cash machines weren’t on the same network and were they’ve almost a day late in their details, Been with First Direct for almost 20 years now, Only had 1 problem, which the paid to fix even though it was my mistake. Can’t fault them for service.

Having worked in the financial services industry you couldn’t pay me enough to switch to anything run by Santander which limits the choices greatly. So I’ll stick to FD thank you.

As to 7 days to switch that still seems a long time in this day and age, oh yeah thats right I worked in the financial services industry, no its isn’t, not with their archaic kit and software these clowns use.

Member
dadov2 says:
26 May 2013

I too tried several different banks until I found First Direct over 15 years ago – I’m still with them. Of course they are not perfect, but I think they are the closest I have found. My accounts are easy to run with free SMS text alerts and I have access to UK based human help/advice 24×7 365 days a year. I believe they win Which? awards too!. All in all not too shabby eh? All too often these days we read/hear too many horror stories re. other banks. Why would I want to move?!

Member
Sophie Gilbert says:
26 May 2013

Finding out through Amnesty International that the Royal Bank of Scotland was conducting financial deals with cluster-bomb manufacturers was the last, rather sizeable straw. That RBS later pulled out (under pressure!) of conducting such deals still left an extremely bad taste in the mouth. What other horrors was I potentially subsidising?

I now bank with Nationwide and haven’t looked back since… until Amnesty International, Friends of the Earth, Which? et al, advise me to do otherwise…

Member
Eileen says:
28 May 2013

Currently in the process of switching from RBS to Lloyds, however I was told wont be any problems, but I have been inundated with letters for this that and the other, the RBS wouldn’t close the account because they did not have a upto date signature and the letter came when I was on holidays so I had to rush to sort out as Lloyds had not advised this may be an issue, then I queried when one account closes an the other opens as I was worried about my debit card situation, Lloyds said we will keep an eye. I went shopping Friday (bank holiday) shopped at Tescos for an hour went to pay and account had been closed and not got my new pin set up have had to be without all weekend, never again…..

Member

I have been trying to switch bank accounts from Lloyds to HSBC, where my husband banks. I have been told that it would be straight forward but it hasn’t been and 2 months later I’m still trying to switch. I decided to switch after having problems with an insurance claim that was connected to my packaged bank account and having fought with Lloyds for a long time about the claim and their refusal to pay out the full amount to cover my loss I decided to switch to a different bank. Lloyds said that becuase of the issues I’d had with my insurance (you can read about the claim at http://insurancecompanyreview.co.uk/insurancereviews/lloyd ) they would try to help me move accounts quickly but this hasn’t happened as I have a legacy savings account connected to my current account but jointly in the name of me and a former partner, I can’t get the packaged bank account closed down. I’m now being told that even if I ‘switch’ accounts, that I need to keep the Lloyds current account open! This is on top of the usual delays with getting standing orders and direct debits switched over.

Member

When I switched bank account from Barclays to First Direct, I did not close my Barclays account in case there were problems with direct debits or standing orders. It all went really smoothly except for my Council Tax. That was because the Council needed me to confirm the change of bank unlike all the other institutions. I only planned to keep the Barclays account open until all payments and income transferred to my First Direct account, but nine years later I still use the account for all my online transactions.

Member

I’d need a bank better than First Direct and that bank doesn’t exist.

I’ve been with FD since 1990 when it was just telephone banking. I helped beta test Internet banking and (Android) mobile app banking. I won’t be switching anytime soon.

Member

This 7-day time limit sounds like another promise the banks will break, and some comments above show how difficult switching can be anyway. I try to have accounts in good standing with two or three banks and building societies, so as to be able to use more than one even if there’s a problem or dispute with another. This has worked over the last 40 years or so though the declining number of banks makes it more difficult to keep up three good alternatives. For example, I’m still with bits of Lloyds/BOS/Halifax though I’m nervous about them, because there doesn’t seem to be another secure alternative apart from the other two I have already.

Member
Gerard Phelan says:
7 June 2013

For me the barrier to change is not the standing orders and direct debits, but the direct payments of share dividends to the current account and it being the “linked account” for a dozen or so savings accounts. Share dividend payments would be hard to change, especially because some share registrars are noted for their great incompetence at changing such data. Savings accounts would be hard to change because I almost never log onto them and would no doubt find each used a completely different system for changing the linked account that, understandably requires my remembering all the obscure security information I used to setup the account many years ago.

Member

I’ve just transferred a CASH ISA from one financial outfit to another, it took fair too long.

They wrote to me on 15th May saying they been contacted to do the transfer, on 21st May they closed the account, on the 3rd June the money appears in the new account.

That is just one account, I can’t imagine how long it will really take to transfer a bank account with all the attached DD/Standings Orders etc.