Switching Bank Accounts

Posted on: 11/12/2012

Apparently on average the British Public - that's you and me - change banks every 26 years.

The average life expectancy of a UK resident is currently 80 years. Since normally one doesn't have a bank account until reaching the age of 16, on average we Brits use only three banks during our lives i.e. not many.

Of course, part of the problem is lack of choice. In the UK we have half a dozen big banks, the same number of small ones. We also have only one big Building Society and 40 or so much smaller ones.

So less than 60 banks and similar to chose from.
In the US there are over 12000 banks.

Successive UK Governments have indicated they would like more choice for consumers in the banking sector. The advent of Metro and Virgin give some hope in this respect but it is fair to say we are a long way from having a wide enough choice .

The other problem is lack of portability of bank accounts. It seems the Government may be going to ask the banking industry to look again at this.

The ideal situation would be for a bank account number to be transferable to any bank, in the same way that mobile phone numbers are transferable between network operators .
The main objection to this proposal from banks has been cost. However, the same banks seem able to cough up £15 Billion to cover the PPI compensation bill. So why not pay up to give customers fully portable bank account numbers?

As a Director of the UK Payments Council, I am fully supportive of this project being fully costed. We need to know the facts, not just the usual bleats that it is "too expensive to even contemplate" or "it will provide a bean feast for IT consultants".

The banking sector is too fond of referring to "IT issues". This has become a catch-all excuse for inaction. That is simply not good enough.


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