UK: the 7 Day Bank Account Switch

UK seven day bank switchThe big four banks in the United Kingdom (Lloyds Banking Group, Barclays, Royal Bank of Scotland and HSBC) should be bracing themselves for what may be a mass exodus in the coming weeks. A new system – the Current Account Switch Service – is being introduced to make switching a Current Account quicker and easier.

At the moment the big four UK banks have approximately 75% of all 80 million current accounts, and up until now many customers have been reluctant to switch to a new bank because the process has been over-complicated, slow and drawn out. Fear of fees and complications due to transfer errors and/or delays has also been a factor.

But with the introduction of the Current Account Switch Service this week, it suddenly became much simpler to let the big banks know that you no longer require their services.

  • To begin with, there will be more than 30 banks and building societies taking part in the program – all competing for your business.
  • You will no longer have to arrange the transfer through your current bank: you can approach the one you wish to use and they will arrange it for you. You may in some cases be able to arrange it all online, too
  • If any payments are missed as a result of the transfer, the bank will pay any applicable fees and ensure there is no effect on your credit rating.
  • Once agreed upon, the account transfer should be completed within seven working days.

This is great news for customers of course, and it will be interesting to see some of the deals being offered and how many people take advantage of the new system. While many may wait a few weeks – or months – to see how well it all works and what the best deals are, we expect a large amount of people to make the switch.

You can find out more about the seven day bank switch here. And let us know your experience if you have done it!

Philip

4 Comments

  1. I switched to another bank last year (not one of these top 4). My new bank offered me £100 to switch and it was pretty straightforward! Plus I get paid interest on balances over £1000 in my account. Why thank you very much!

    • Great stuff! I saw that First Direct are currently offering £125 as an incentive: I think that competition is really going to heat up, which is fantastic for customers.

  2. I think this is great news. Although, come on, it’s 2014, life should be a lot less complicated… we should be able to switch banks fast if we want to.
    I was talking to my friend in Europe, just the other day. She’s 27, so she heard about this new offer a bank has, if you’re under 30, you can open an a bank account with zero fees. So, she took advantage to close her old account and open up a new one. It only took a few minutes. This should be the norm everywhere, for all clients. You find a better offer, you should be able to switch immediately.

    • I agree, Andy. The easier and quicker it is to switch, the harder the banks will have to work to keep their customers from changing. It’s a very good thing, I think some of the big banks have gotten away with providing an inferior service for too long.

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