The Financial Conduct Authority (FCA) has found that the current account switch service (CASS) is working well for consumers who have chosen to use the service.
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 the FCA review found a lack of consumer awareness and confidence in CASS. If consumers are unaware or not confident using the service then it is likely to have a more limited impact. In addition a small number of operational issues associated with CASS and the switching process more broadly need to be tackled.
Christopher Woolard, Director of Strategy and Competition at the FCA, said:
“If we want to encourage consumers to switch their bank accounts then it is important that the industry makes it as easy as possible for them to do so.
“Making sure that the systems that already exist work well will help bring consumers’ confidence that switching can be simple and error-free. More needs to be done to raise awareness of the tools which already exist to enable customers to move around.”
The FCA has recommended measures be taken to raise awareness of the service, such as more targeted marketing campaigns, and to raise confidence in the service, such as publicising customers’ positive experiences. It also recommended industry considers solutions to address the operational issues which exist.
The FCA report also found that current account number portability could make it even more convenient to switch bank accounts.
Account number portability would allow consumers to change banks without changing their bank account details. The FCA 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.
The newly formed Payment Systems Regulator (PSR) will consider the FCA’s evidence in relation to account number portability, alongside other possible innovations in payment systems as part of their work going forward.
The FCA also found that a reduction in the time taken to switch bank accounts from seven to five days was unlikely to deliver significant benefits to consumers. Consumers were more concerned that a switch was done on a particular date and without problems than the speed at which the switch was undertaken.
The full report: Making current account switching easier.
Copyright © 2016 FCA. All Rights Reserved.