Bank Account Number Portability
The leading cause of this attrition is poor service. The same survey also says that nearly 60% of customers hold multiple banking relationships.
Clearly, total loyalty is a rare commodity today. With the market being flooded with similar products, the choice of whom to bank with boils down to service, quality of experience, and to some extent, personal circumstances (such as geographic location or a
company mandated salary account). Also, when customers shop around to find the best deal each time, they could end up holding different products with different banks. Another reason why customers have more than one account is that often, it is both cumbersome
and expensive to close the old one, especially if it involves terminating a mortgage or bundled product.
But that could change quickly if Bank Account Number Portability (BANP) were to become reality. The goal of BANP is to enable customers move their bank accounts seamlessly from one bank to another, and thereby save them the hassle of closing and opening accounts,
reissuing standing instructions, and so on. However, for it to work, BANP requires all banks to adopt a standardized practice of account numbering, indicating the bank and code number of the branch owning the account. This is already the case in some countries
of Europe and North America. But other countries, which follow a different system of account numbering, will need to spend massive effort and resources to change. It is doubtful if they will be willing to do so.
The other major challenge that BANP faces is ensuring the security of a centralized database containing the details of all bank accounts of the member banks, which serves as the repository of all porting information.
But if implemented successfully, bank account number portability could well be the next game changer.
By Manish Jain