Consumers can help drive competition by shopping around. This pushes firms to up their game and provide better products and services to retain and win customers. It also allows new firms to enter the market and provide new products and services and gain customers. The ability for customers to switch between providers with confidence is therefore an essential element of a competitive current account market.
The purpose of CASS is to simplify the process of switching current account providers. It is available to all individuals, as well as some small businesses and charities.
In our review of the effectiveness of CASS, we considered:
As part of our review we collected information from firms and other interested parties, as well as undertaking consumer research. The review is not a full market study and its purpose was not to assess the degree of competition in the market; rather, we wanted to assess the effectiveness of CASS by looking at a range of indicators.
We found that CASS addresses the main concerns expressed by consumers about switching, such as having to transfer salary payments and utility bills. The vast majority of switches are completed within 7-days and without error and most consumers who have used the service rated it positively. However we found consumers lack awareness and confidence in CASS. We also uncovered a small number of operational issues associated with CASS and the switching process more broadly. We have recommended measures to address these points.
In considering its effect more broadly, we found that there has been a small increase in switching volumes since CASS was launched, although this needs to be seen in the context of the other significant barriers to switching which still exist, such as consumer inertia. There have been some limited changes in provider behaviour, particularly in relation to the development of current account products. As yet we have found no changes in levels of consumer satisfaction with current accounts.
Alongside our review of CASS we also gathered evidence on other measures that may help make switching simpler and easier for consumers, including account number portability (ANP).
ANP could potentially make switching simpler and easier for customers by allowing them to change banking service providers without changing their bank account number. It could also remove the need to amend certain outgoing payments such as direct debits, which is a key area where perceived or actual problems with switching, such as missed mortgage payments, can arise.
We found that being able to keep bank account details increases consumer confidence in the bank account switching process and that a significant number of individual and small business customers would be more likely to switch if they could retain their account details. There are various technical solutions to delivering account number portability which involve different levels of cost and complexity.
In April 2015, the new Payment Systems Regulator (PSR) will become fully operational. The PSR has the objectives of encouraging innovation and competition in payment systems in the interests of end-users. We have recommended that the PSR use the findings we have gathered in relation to ANP, alongside other possible innovations in payment systems, as part of their work going forward.
Read the full report of our findings on CASS and ANP:
Our findings were informed by two pieces of consumer research. We also commissioned a report into account number portability.
Read the commissioned reports:
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