Bank switching to be overhauled
Bacs Payment Schemes has announced its commitment to deliver the recommendations made in the Competition and Markets Authority’s (CMA) investigation to make bank switching easier.
Bacs, the organisation which owns and operates the UK’s Current Account Switch Service (CASS), has this month said it will implement the recommendations within a year.
The CMA investigation, published in August 2016, included measures such as implementing an increased redirection period for payments made to an old account.
It also included reforms to make improvements to governance and reporting and increasing levels of awareness and confidence in the service.
The CMA said an important change from the investigation will be the extension of the redirection service operated by CASS.
It described how this is designed to give further assurance to customers that all their payments will be switched from their old account to their new one, seeking to overcome a key concern about moving banks.
According to the CMA, only three percent of personal and four percent of business customers switch to a different bank in any year.
Alasdair Smith, chair of the CMA retail banking market investigation, said: “Our banking investigation demanded that banks work harder for their customers.
“Taken together, its 17 recommendations will save customers between £700 million and £1 billion over five years.”
Bacs has also been tasked by the CMA to work with banks to increase both awareness of and confidence in CASS.
The CMA said Bacs and the banks will now work together to target those likely to benefit from switching the most, such as overdraft users and customers with high credit balances.