UK customers will be able to receive suggestions on which current account is best for them by the end of 2014.
Using information collected on their current account usage over a year, online tools with suggest more suitable accounts and compare best value.
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The suggestion system is dependent on an agreement reached by the UK’s big six retail banks, Barclays, HSBC, Lloyds Banking Group, the Royal Bank of Scotland, Santander and Nationwide to allow customers to compare the value of their current accounts online.
The deal has been announced by the UK’s Economic Secretary to the Treasury, at the British Bankers’ Association (BBA) annual conference, which is focusing on competition in the industry.
Competition within the retail banking industry has struggled to pick up despite the introduction of a seven day switching guarantee in September 2013 in an attempt to speed up the process.
The suggestion system looks set to refocus the importance of competitive pricing and rewards for using a current account, bucking the trend of banks trying to compete on customer service.
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By GlobalDataThe latest figures from TNS suggest that account switching in the UK has had little more than natural growth despite the multi-million pound scheme from the Payments Council to encourage switching.
While poor customer service is often cited as a reason for a customer leaving a bank, customer choose convenience and price over customer service when choosing their new bank.
According to TNS Nationwide, Santander and Halifax have been the main gainers in the nine months since the Switch initiative was launched to help customers move their accounts.
Nationwide has recorded net gains of between 3% and 8% of switchers in every month of the Switch regime.
In May poor customer service was cited by 22% of switchers as their reason for leaving their banks, while convenience (branch availability/opening hours/online offering) was cited by 22% as the reason for choosing their new bank.
There was a strong rise from 12% to 19% in those saying that interest rates on credit balances was their main reason for choosing their new bank.
Santander was again the big winner in May 2014, chosen by 24% of switchers, while losing 11%. The bank has recorded double-figure net gains for seven consecutive months.
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