Switching Out

by | May 12, 2014

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Don’t hold your breath, but the European Union is galloping to the rescue of bank account holders who want to be able to switch their accounts to another bank. Only another five or six months to go, and the long-awaited Payment Accounts Directive might be ready for enactment – long after Britain’s own seven-day bank switching system came into force last September.

As you might have expected, there’s a catch. Firstly, it’s a much bigger bill than just this one issue would suggest. And secondly, The British Bankers’ Association (BBA) is objecting to the new proposals, on the grounds that the new bill allows for fully cross-border transfers at short notice. And that, as you can probably imagine, will involve an awful lot of translators sitting at an awful lot of desks with their Croatian dictionaries and their Slovakian law books at the ready. The BBA says this is ludicrously resource-intensive. You can see its point.

Meanwhile, the general take-up of bank switching here in Britain has been proceeding more slowly than expected. The latest TNS Current Account Switching Index, published on 17th March, shows that, although a 54% majority of the public are aware of the Switch guarantee, the rate of switching is not accelerating at all.

The overall level of switching is just 4%, it says, and if anything the numbers are declining. The largest proportion of switchers (58%) come from the ABC1 demographic, which also has the second highest awareness; but oddly, only 47% of switchers come from the over 45 age group, even though they have the highest awareness (63%).

Favoured banks include Santander (which has won 22% of the total migrating in, while losing 12% of the customers who moved out), Halifax (16% in and 9% out), Lloyds (14% in 20% out), Nationwide (11% in, 3% out), Barclays (8% in, 12% out), and Natwest (9% in, 15% out).  HSBC gained 5% of the migrants but lost 10% of those moving out.

You can read the report at http://tinyurl.com/ot54ot9 .

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