21st January 2016
The amount of people switching current account plummeted by 10% over the past year according to new research.
Data from the Current Account Switching Service (CASS) showed that in 2015 some 1.03m bank customers changed provider, a fall from 1.15m during the previous 12 months.
The CASS asserted however that more people switched in the last three months of 2015.
Jody Baker, head of money at Comparethemarket.com believes that not nearly enough people are making use of the seven-day current account switching service.
A survey by the comparison site showed that more than a third of people said the complexities in the switching process and fear that direct debits may not be successfully transferred discourages them from moving bank.
“This remains the greatest barrier to switching,” added Baker. She said: “There is clearly a need for banks to instil confidence in consumers and allay fears that direct debits will be successfully transferred.
“The data, showing 11m payments have been successfully redirected, should go some way to reassuring those considering moving banks.”
Baker noted however that competition amongst the largest banks is limited as they have little incentive to compete given switching rates are still comparatively low.
She added: “Everyone should review their current position and look to switch their provider, as there are plenty of smaller players offering attractive products, such as Clydesdale Bank and Yorkshire Bank both offering £150 to switch and TSB offering 5% interest on balances up to £2,000, but there isn’t yet anything like the traction that products like these would receive in a properly functioning market.”