23 September 2014

UK banks float £2 billion account switching plan

22 June 2011  |  7590 views  |  1 London -- Routemaster red double decker bus

Britain's banks are on the verge of agreeing a £2 billion plan to make it easier for customers to switch current accounts between providers, according to the Sunday Telegraph.

The Independent Commission on Banking (ICB) has set its sights on the often difficult process of account switching as part of its push for increased competition in the sector.

In an interim report earlier this year, the ICB raised the prospect of introducing full account portability - letting customers change bank without a new number - which would remove the need to transfer direct debits and standing orders, a major grumble for switchers.

"In the past, portability has been rejected as overly costly, but if no other solutions appear effective and practicable, it should be reconsidered to see if this remains the case given improvements in IT and the payments system infrastructure," said the report.

Lloyds Banking Group responded to the ICB by commissioning a report into switching which has proposed a compromise offering that would see a database built to store account numbers that can be shared between banks to check as and when payments such as direct debits are due.

According to the Telegraph, the database plan would cost between £1.5 billion and £2 billion and take around two years to build, while a full account portability scheme would be £5 billion and take up to 10 years to roll out.

Lloyds presented its proposal to fellow banks at a Payments Council meeting last week to general approval, says the paper. The plan will now be refined and put to the ICB ahead of the publication of its final report in September.

Bank to make switching current accounts easier - Sunday Telegraph

Comments: (1)

David Birch - Digital Money Forum - London | 23 June, 2011, 19:00

The FT points at a cheaper and better plan.

http://www.ft.com/cms/s/0/2195845e-98dc-11e0-bd66-00144feab49a.html#a

Modesty forbids me from mentioning the source of the target, so to speak.

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