Business banking news review: week ending 26 Feb 2015
Yorkshire Building Society complained this week that the new rules put into place to make it easier for customers to switch bank accounts aren’t doing enough.
In fact, the second largest building society in the UK conducted research on the issue, proclaiming that High Street personal and business bank account providers have such a stranglehold on the industry that only 3 per cent of accounts have been transferred since the inception of the so-called ‘seven day switching’ rule a year and a half ago.
Yorkshire BS took figures from the Payments Council in order to substantiate its claims, as the latter showcased that around 1.6 million accounts have been switched since the September 2013 launch of the service. Meanwhile there’s still 62.6 million bank accounts held by Brits in total – and that indicates that Yorkshire’s figures are more or less right.
Chris Pilling, Yorkshire’s chief executive, derided the seven-day switching rule as a concession to High Street and likely was only agreed to because more progressive changes like introducing an account number that could be transferred between banks was unacceptable to institutions like Barclays and HSBC. Pilling said it should be about as hard as downloading an app to your mobile phone as it should be to switch bank accounts, but with High Street being so recalcitrant to play along this is what we get instead.
For what it’s worth I can understand Pilling’s frustration, as his building society has been waiting in the wings for some legitimate growth for some time when compared to the big bad banks in the country that have the majority of consumer deposits on lockdown. On the other hand, it’s not as if consumers in the UK have a massive selection of good deals to choose from when it comes to savings accounts or even current accounts; interest rates are positively in the toilet and have been so for much too long, and it’s incredibly hard to fight against customer apathy when there truly is nothing to offer these people by switching besides just another account that’s sub-par in an entirely different way. If High Street rivals would offer genuinely good deals, I’ll wager that people would come out of the woodwork to switch!