Fair play guys: account switching seems to have worked
Let's not get too comfortable though, writes Douglas Blakey.
After all the hype and the ads and the PR activity relating to account switching, fairs fair: the banks have got off to a decent start. The system works. Complaints about the seven day deadline not being met are few and far between.
More than 35,000 UK customers have started to switch their bank account in the past three weeks. Add to the mix positive stats from the comparison website Moneysupermarket.com – it has reported a 45 percent increase in the number of visitors to its site looking to switch their current account.
Among the winners: Nationwide reports a near 80 percent rise this month in new customers switching to the UK’s largest mutual. HSBC subsidiary First Direct says calls from potential switchers have doubled.
Metro Bank has also issued upbeat news about having to double the number of staff handling account switchers. Let us not however get carried away. Last year, 1.2 million current account customers or around 2.6 percent of the total 46 million accounts were switched.
So call it about 23,000 customers per week. For the full month since seven day account switching went live, it might be fair to estimate that account switchers have doubled year-on-year.
If sustained over the longer term that would mean that around 5 or 6 percent of current account customers will switch. A significant increase and one that makes the exercise worthwhile, albeit at a total industry wide cost of £750 million in IT expenses.
But way off some of the wilder and unrealistic predictions from the more excitable commentators that up to a quarter of us might switch our main bank account. Such guestimates were never realistic and are unlikely to come close to being realised.
Meantime, spare a thought for the beleagured souls at the UK arm of National Australia Bank: that is Clydesdale Bank and Yorkshire Bank to you and me. Clydesdale Bank somehow contrived to mess up mortgage calculations for 42,500 customers.
It was bad enough that it got its sums wrong a first time and copped a £9 million fine from the regulator for a blatant failure to treat its customers fairly. It has now somehow achieved a double whammy of appalling PR by paying out compensation twice to some of its customers. Not perhaps the best week to be a member of the account switching team at Clydesdale.