The amount of consumers switching current accounts fell by 80,000 or 6.7% between 2012 and 2013, in spite of the UK’s simplified switching service.
Annual results from the UK Payments Council revealed that in 2012 there were 1.2m switches overall and in 2013 there were just 1.02m switches.
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A spokesman for the Payments Council explained the lower than expected figures for 2013, saying: "Switches in 2013 include a mix of switches made before the new service came into being, i.e. those up to 16 September and then Current Account Switch Service switches after that date."
The UK’s Current Account Switch Service, launched in September 2013, is a free service designed to ensure that consumers can switch their current account in seven working days with the minimum of hassle.
Figures released by the UK Payments Council 11 April said that 609,300 consumers switched their current accounts in the six months from October 2013 to 31 March 2014.
According to the Payments Council, this represents an increase of 14% from the same period the year before, when there were 532,500 switches.
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By GlobalDataGary Hocking, managing director of the Payments Council, said: "By making the Current Account Switch Service quick, hassle-free and removing the fear factor we’ve taken away the barriers customers told us they had when it came to switching.
"Six months in and the latest figures suggest people clearly seem to be getting the message that things have changed for the better."
The Payments Council said awareness of the service has also risen noticeably, with 67% of the public aware of the new service (up from 59% in Dec 2013) and 65% confident in how the new service works (up from 58% in Dec 2013).
However this awareness does not seem to be translating into switches, with the TNS Account Switching Index stating in its most recent monthly report that account switching is not accelerating.
Maureen Duffy, CEO of TNS UK said, "The research suggests that the Switch Guarantee alone is not enough to encourage customers to shop around."
In terms of winners and losers in the TNS Account Switching Index, the biggest net gainers since the launch of the switching service are Santander, Nationwide and Halifax gaining 10%, 8% and 7% of switchers respectively.
Santander is the biggest gainer in gross terms, but has also lost 12% of switchers, whereas only 3% have left Nationwide.
The biggest net losers are Lloyds and TSB (still grouped together by TNS for reporting purposes), Natwest and HSBC, losing 6%, 6% and 5% respectively.
The hope is that with the entrance of challenger banks Tesco and Virgin Money, switching rates will pick up.
Duffy said: "In other markets we have seen new entrants or re-invigorated players taking a more segmented approach and this is something we have not yet seen in Current Account banking."
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