18 December 2017
visit www.avoka.com

Banks under pressure on account switching

01 December 2006  |  13071 views  |  0 Sepa

Customers will not gain the full benefits of competition in a Single Euro Payments Area (Sepa) unless banks make it easier to switch accounts between institutions, says a group of European regulators which are pushing for a greater say in the preparations for the new payments framework.

According to a Financial Times report, a group of European competition regulators is calling for "account number portability" following the introduction of Sepa in 2008. This would require banks to allow customers to change banks but keep their account number so it is easier to transfer services tied to accounts such as direct debits and card payments.

Italian competition regulator Alberto Heimler, who also heads competition bodies at the European Commission and the Organisation for Economic Co-operation and Development, told the FT that regulators were concerned by how infrequently customers switched accounts.

Heimler claims that costs of switching accounts allow banks to "maintain high rates of customer retention and high market power", adding that customers currently have a higher probability of getting divorce than changing bank accounts.

Although it is not one of the measures to be introduced in the Sepa framework, Heimler says competition regulators from countries including the UK, the Netherlands, Sweden and Ireland wanted to start a debate on account number portability, as well as switching costs, and that a common position could be agreed by the end of Q1 2007.

But he warns that additions to the Sepa framework at a later stage would be expensive and so banks "should be forced to develop now an account code system that would minimise the investment needed at a later stage".

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Euro Central Bank calls for more clarity on Sepa for cards framework

Euro Central Bank calls for more clarity on Sepa for cards framework

20 November 2006  |  9948 views  |  0 comments
Major euro banks to work with Swift for Sepa compliance testing

Major euro banks to work with Swift for Sepa compliance testing

11 October 2006  |  7137 views  |  0 comments
Survey highlights lack of planning beyond first Sepa deadline

Survey highlights lack of planning beyond first Sepa deadline

09 October 2006  |  8166 views  |  0 comments
Pre-paid card use to soar in Europe, boosted by Sepa

Pre-paid card use to soar in Europe, boosted by Sepa

27 September 2006  |  11083 views  |  0 comments
Euro banks to lose EUR29bn payment revenues after Sepa

Euro banks to lose EUR29bn payment revenues after Sepa

15 September 2006  |  13118 views  |  0 comments
Sepa spend by Europe's banks to top EUR8 billion

Sepa spend by Europe's banks to top EUR8 billion

13 September 2006  |  10523 views  |  0 comments
IT vendors push for more Sepa consultation

IT vendors push for more Sepa consultation

06 June 2006  |  10336 views  |  0 comments
European Central Bank warns on Sepa timetable

European Central Bank warns on Sepa timetable

03 May 2006  |  12070 views  |  0 comments
Eufiserv restructures for Sepa

Eufiserv restructures for Sepa

24 March 2006  |  9816 views  |  0 comments
Euro central banks firm up Sepa objectives

Euro central banks firm up Sepa objectives

17 February 2006  |  13079 views  |  0 comments
Sepa paper draws furious response from banking lobby group

Sepa paper draws furious response from banking lobby group

15 February 2006  |  10489 views  |  0 comments
European Commission slams banks on slow pace of Sepa reforms

European Commission slams banks on slow pace of Sepa reforms

10 February 2006  |  9239 views  |  0 comments
Banks braced for Sepa challenge

Banks braced for Sepa challenge

07 October 2005  |  11338 views  |  0 comments
EBA details Sepa vision

EBA details Sepa vision

08 September 2005  |  14381 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.thomsonreuters.infovisit www.niceactimize.comvisit www.atos.net

Top topics

Most viewed Most shared
satelliteRipple completes XRP Lockup
11307 views comments | 3 tweets | 4 linkedin
Banks tap Ethereum smart contracts for MiFID II complianceBanks tap Ethereum smart contracts for MiF...
10368 views comments | 21 tweets | 26 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
7817 views comments | 19 tweets | 22 linkedin
Digital banking startup Loot secures £2.2 million seed roundDigital banking startup Loot secures £...
7559 views comments | 5 tweets | 11 linkedin
Nordea takes Open APIs into live productionNordea takes Open APIs into live productio...
7457 views comments | 6 tweets | 26 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job