Written by Scott Thompson
The Current Account Switch Service is two years old today. Our Editor Scott Thompson, one of the two million current account customers to have moved banking providers under the initiative, gives his verdict
Two million accounts in two years...If I were a school teacher, I would give that a B, good but must do better. The initiative, which aims to have the switching process completed in seven working days, is now offered by 40 High Street banks and building societies - up from 33 at launch - giving almost total coverage of the current account market. Since January 2015, almost 700,000 successful switches have taken place, with the service recording more than half a million switches in the first two quarters of the year.
Nicolas Frankcom, money expert at uSwitch.com, comments: “Getting two million people to switch is a great start. But less than five per cent of current accounts were switched in the last two years and more has to be done to convince consumers that, when it comes to banking, loyalty simply doesn't pay. The good news is that it's never been a better time to switch. Increased competition between providers means consumers can really benefit from moving their current account. Besides switching incentives, like the £150 offered to new customers by Clydesdale Bank, some current accounts now pay more interest than savings accounts. There are also plenty of products offering fee-free overdrafts, rewards, and fee-free cash withdrawals overseas. What's more, Santander's recent decision to nearly triple its account fees shows how important it is for people to switch regularly to avoid being stung."
It will be hoped that a multi-million campaign, kicking off on 18 September and including TV advertising, print and online media together with PR and social media campaigns, will raise awareness. Whilst Economic Secretary to the Treasury, Harriett Baldwin, will meet today with satisfied customers. Alas, I wasn't invited. But I will nonetheless offer the following feedback: it was a fairly smooth transition from NatWest to Nationwide. It did indeed take seven days, a huge improvement on what went before, but I wouldn't call it stress-free as there was a delay on setting up a couple of direct debits and the process of receiving forms in the post, signing and returning them and then waiting for the next step needs to be looked at. But overall, the service encouraged me to leave NatWest (a relationship stretching back to my teens), something I had been mulling over for a couple of years, unhappy with NatWest's tarnished reputation, rubbish customer service, IT glitches and drab branches. But I stayed put, simply because it felt at the time like the best of a bad set of options.
Overall, I'm a fan of the Current Account Switch Service. Two million accounts is a decent start, but it doesn't represent a banking revolution and more needs to be done to persuade people that they don't have to put up with the established group of British High Street banks. We're seeing increased competition between providers and a wave of challenger banks looking to usher in a new digital era in financial services. So, whilst the first two years can be deemed a partial success, in many ways the hard work starts now.