UK Payments Council to abolish account switching hassle

The UK Payments Council has called for
“massive system changes for all banks” to ease the account
switching process.

The proposals come as a fresh blow for an
already struggling banking sector as unsatisfied customers could be
incited to switch banks because they will face less hassle in the
process.

The proposals by the Payments Council, to be
imposed by September 2013, include:

• automatic switching of incoming payments: To
  date, only outgoing payments such as direct debits are moved to
  another bank account directly – and the consumer carries the
  responsibility to notify anybody who pays funds into their
  account;
• that direct debit collectors update their own
  records if customers change account details, and
• cutting the time it takes to switch accounts
  from 18 to a maximum of seven days.

“It will encourage competition within the UK’s
banking sector and improve transparency for customer,” the Payments
Council said in a statement.

According to
research by Accenture, 16% of customers switched banks in 2010,
compared with 14% in 2007; and 14% said that they were planning to
switch in the next 12 months.

Younger customers are 30% less likely to
complain, the management consulting found, which means that
they are less likely to hesitate to switch banks. In fact,
customers aged between 18 to 24 years were 50% more likely to
switch banks.

Related articles:

E&Y hails new era in customer
expectation

UK lobby group CBI opposes ring-fencing
proposals

Banks still not get it right: customer dissatisfaction
rises

PPI: Court blow for UK banks

Lloyds attracts almost 2,000 complaints a
day

Consumers turn to Google instead of financial
advisors

UK Independent Commission on Banking: proposals in
September

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