Consumers more likely to switch bank if they could keep their account number

Six in ten people (59%) say they would be more likely to change bank if they could keep their bank account number.

A new Which? survey finds six out of ten people (63%) support the introduction of portable account numbers in the UK and three-quarters (76%) believe that this would make switching accounts easier. More than half of people (55%) surveyed have never switched their current account.

The findings come as Which? and Andrea Leadsom MP today host a joint event at the House of Commons to encourage banks to introduce portable account numbers. Representatives from Lloyds, RBS, Barclays, HSBC, Metro Bank and Virgin Money are attending along with members of the Treasury Select Committee, and the British Bankers Association.

The introduction of portable account numbers means consumers could move their current account to another bank more easily – simply taking their account number with them, removing the need to change existing direct debits and standing orders.  This would make switching banks as easy as changing mobile phone providers and would increase competition on the high street, forcing the banks to genuinely compete for customers and therefore incentivising better products and customer service.

Which? executive director Richard Lloyd said:

“One of the most important ways that consumers can influence the broken banking culture in this country is by voting with their feet and switching to another bank. Yet half of consumers have never changed current accounts.

“With consumer trust in banking at an all time low, we want to see big change in banking with banks for customers, not bankers. We urge the Government to seriously look at introducing portable account numbers to make switching easier for consumers.”

Andrea Leadsom MP and member of the Treasury Select Committee said:

“Customers are fed up of excuses from their banks. What they want is a massive shake-up of how banks work. Full bank account portability fits the bill perfectly. And it wouldn’t just be customers who’d be better off.

“At one stroke, huge barriers to entry for new banks would be torn down. Regulators would instantaneously be able to move deposits out of a failing bank, to prevent a run like we saw with Northern Rock. And the current high levels of bank losses due to fraud would be significantly reduced.

“The sooner bank customers can switch accounts like they change mobile phone providers, the better it will be for everyone.”

Portable account numbers could produce many other benefits, creating changes to the agency clearing service that would make it easier for smaller banks to start-up, therefore increasing competition on the high street.  It may also reduce the chances of taxpayers having to bail out the banks again, because the regulator could shut down a failing bank and transfer personal and business accounts to another existing bank.

Which? and Andrea Leadsom MP are calling on the Government or the regulator to conduct a full, independent assessment into the costs and benefits of introducing portable account numbers, with a view to introducing portable account numbers as the best way to increase switching.

The Government should also consider the significant administrative savings for companies, local authorities and government departments from introducing portable account numbers. Whenever a consumer switches their bank account, every single company that interacts with that account needs to change the details on their own systems.

Notes to editors:

1 Populus, on behalf of Which?, interviewed 2057 GB adults online between 31st August and 2nd September 2012. Data were weighted to be demographically representative of all GB adults. Populus is a member of the British polling council and abides by its rules. Other findings in the survey include:

  • Of those who have never switched current accounts 19% thought changing accounts seemed too complicated.
  • Six in ten (62%) people think that the introduction of portable account numbers would have a positive impact on competition between banks.
  • A third (33%) think the introduction of portable account numbers would not be too expensive for the banks to afford, compared to 27% who think it would.
  • 73% of people agree that if portable account numbers were introduced people could switch bank accounts as easily as moving to a new mobile phone provider.
  • 70% agree that a lifetime portable account number would give people greater control and ownership of their bank accounts.
  • 76% of people believe that portable account numbers would have a positive impact on the ease of switching bank accounts.

2  The Independent Commission on Banking said that portable account numbers should be re-examined should switching not improve in the near future but they did not carry out a full cost-benefit analysis into account portability.

3  In June 2012 the Government decided that it would wait and see whether the introduction of the Payments Council switching service in September 2013 will make it easier for people to switch banks. However, the hassle of switching remains with the consumer, especially if things go wrong with the switching service.

 

 

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