21 January 2017
visit http://www.wolterskluwerfs.com

Banks under pressure on account switching

01 December 2006  |  12842 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  |  9709 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  |  6927 views  |  0 comments
Survey highlights lack of planning beyond first Sepa deadline

Survey highlights lack of planning beyond first Sepa deadline

09 October 2006  |  7797 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  |  9048 views  |  0 comments
Euro banks to lose EUR29bn payment revenues after Sepa

Euro banks to lose EUR29bn payment revenues after Sepa

15 September 2006  |  12549 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  |  9488 views  |  0 comments
IT vendors push for more Sepa consultation

IT vendors push for more Sepa consultation

06 June 2006  |  10068 views  |  0 comments
European Central Bank warns on Sepa timetable

European Central Bank warns on Sepa timetable

03 May 2006  |  11821 views  |  0 comments
Eufiserv restructures for Sepa

Eufiserv restructures for Sepa

24 March 2006  |  9571 views  |  0 comments
Euro central banks firm up Sepa objectives

Euro central banks firm up Sepa objectives

17 February 2006  |  12795 views  |  0 comments
Sepa paper draws furious response from banking lobby group

Sepa paper draws furious response from banking lobby group

15 February 2006  |  9647 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  |  9021 views  |  0 comments
Banks braced for Sepa challenge

Banks braced for Sepa challenge

07 October 2005  |  11130 views  |  0 comments
EBA details Sepa vision

EBA details Sepa vision

08 September 2005  |  14151 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit capgemini.comvisit wavestone.co.uk

Who is commenting?

Top topics

Most viewed Most shared
Banks face big profit loss to digitisation - McKinseyBanks face big profit loss to digitisation...
16135 views comments | 92 tweets | 111 linkedin
Seven banks plan blockchain platform for SMEsSeven banks plan blockchain platform for S...
12780 views comments | 48 tweets | 44 linkedin
Accenture beats Brexit blues with largest-ever London startup programmeAccenture beats Brexit blues with largest-...
11024 views comments | 31 tweets | 20 linkedin
US fintech firms join forces to push data sharing via APIsUS fintech firms join forces to push data...
6791 views comments | 39 tweets | 40 linkedin
HSBC forms tech advisory boardHSBC forms tech advisory board
6478 views comments | 21 tweets | 23 linkedin

Featured job

to Six-Figure Base, Bonus, Benefits
London, UK

Find your next job