Payments Council to deliver easy account switching

The Payments Council is committing to make bank account switching easier for consumers and small businesses.

Whilst the UK's current account switching arrangements are considered one of the best in Europe, the Payments Council is starting a project that will deliver real customer benefits by the end of 2013. It will encourage competition within the UK's banking sector and improve transparency for customers.

Only 8% of customers switched or attempted to switch their personal accounts over the five years to 2010, and more than eight out of ten of those were satisfied with the switching experience*.  However, at present only outgoing payments such as Direct Debits and standing orders are moved automatically, it is still the customer's responsibility to notify anyone paying money into their account - such as their employer - of their new account details. The Payments Council wants to make account switching trouble-free for customers by also ensuring any incoming payments are automatically switched to a customer's new account.

The Payments Council will also reduce how long it takes to switch an account from around eighteen to a guaranteed maximum of seven working days. It will clarify timescales and ensure consistency of experience across the industry. Also, to further minimise the risk of any customer inconvenience, the Payments Council will ensure that organisations who collect Direct Debits, or make payments directly into an account, update their own records promptly if their customer changes their account details.

Underpinning all these important changes, the Payments Council will develop a guarantee that customers can rely on, ensuring customers get the service they should expect.

All customers will benefit from these changes by September 2013 but they will start to see improvements earlier as changes are phased in over the next two years. The first stage of the work will be to fully review the current system, recommend changes and assess the costs.  Further updates about what the Payments Council is doing, and how these changes will improve customers' experience of switching accounts, will be made in due course. Improving automation and introducing a hard and fast customer guarantee will require massive systems changes for all banks.

Gary Hocking, Acting Chief Executive, Payments Council says: "We are looking to give customers total peace of mind that they can switch their bank account with ease. A generation ago most people would only have had a handful of regular payments set up on their account but nowadays most of us would struggle to remember all the payments we've signed up to - from regular savings to mobile phone payments. This makes it ever more important that the process to switch bank accounts is trouble-free.

"We want a comprehensive switching system that makes life easy for the customer - so that all outgoing and incoming payments are automatically switched too."

This work will address issues highlighted by both the Independent Commission on Banking and the Treasury Select Committee in their recent reports.

* 1,730 adults holding personal current accounts within GB were surveyed in June 2010 through face-to-face interviews.  This survey was conducted by ACCORD research consultancy on behalf of Bacs Payment Schemes Ltd.