There has been an increase in the number of people switching providers for their personal and small business current accounts. In the year since the government launched its imaginatively-named Current Account Switching Service, 1.1m accounts have been transferred, compared to a measly 926,000 over the same period last year.
The scheme was designed to stimulate competition in banking by making it easier to move accounts. It allows accounts to be switched within a week, when they used to take up to a month, and aims to take the hassle out of the transition.
Gerard Lemos, the executive chairman of the Payments Council, which administers the scheme, unsurprisingly said 'huge progress' had been made, but not everyone agrees. The head of the Financial Conduct Authority (FCA), Martin Wheatley, told MPs on the Treasury Select Committee on Tuesday that the overall level of current account switching 'remains relatively subdued'.
Wheatley is onto something there. Only 2.2% of current account holders actually switched over the last year. But is that really the point? 'It is the awareness and confidence figures,' Lemos pointed out, 'that are the best measure of success and not necessarily the number of switches'.
That may sound like a cop out, but 70% of the public are aware of the scheme, and 87% of small businesses believe it’s easy to change accounts, according to Payments Council results. Unsurprisingly, the biggest reason (at 76%) given by businesses for not switching was that they were happy with their current provider. Making banking more competitive surely has to involve more than hassle-free account switching.