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The number of people switching bank accounts using the Current Account Switching Service (Cass), which was designed to make it easier to change bank, fell again in 2015.
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Cass enables a seven-day switch, rather than the 30 days it used to take. The UK government was eager to stimulate competition in the retail banking sector after the financial crisis that began in 2008.
A total of 1.03 million current account switches were made in 2015, down from 1.15 million in 2014. The number of switches in both years was lower than the 1.2 million current account switches made in 2012 – before Cass was launched.
According to Bacs, formerly the Bankers’ Automated Clearing Services, which runs the service, even fewer switches would have been made if it hadn’t been for a media campaign at the end of last year.
It said the campaign in September 2015 was followed by 257,638 switches in the three months from October to December – 11% more than in the final quarter of the previous year.
Cass was introduced by the Banking Commission in 2013. It is designed to simplify and speed up the process of changing bank account providers for consumers, small businesses and charities.
Vocalink built the service’s IT platform, with CGI overseeing the overall project. The two-year project cost £750m, including central IT changes and those of participants as well as marketing, despite a Bacs system already being in place. One source said the system was there – it was the banks that used to hold things up.
Read more about seven-day switching service
- Payment Council figures on the number of consumers who switched accounts could indicate the beginning of a new era in UK retail banking.
- The IT system that underpins government’s regulation of seven-day bank account switching is underused.
- Current account holders in the UK can now switch banks within seven days following the launch of Cass.
Despite the drop in switching, there is evidence that people are using new suppliers for financial services.
A global study of 10,000 digitally connected individuals found that 14.3% in the UK are using financial technology (fintech) services. This suggests consumers are using a number of financial services firms at the same time for different services.
Money payments and transfers are the most common use of fintech globally, accessed by 17.6% of respondents who used at least one fintech service. Savings and investments were used almost as much, with 16.7% using this type of service, followed by insurance (7.2%) and borrowing (5.6%).