Consumers overcome current account inertia

Automated processes for switching standing orders and direct debits are making it easier for people to switch current accounts, says Intelligent Finance.

Consumers are now more likely to switch accounts between banks, making the option of an offset or current account mortgage more accessible.

Research conducted by ICM for Intelligent Finance shows that one and a half million people have moved their current accounts in the last year, as more competitive deals on offer are making their impact felt.

It also revealed that account switching is set to rise in the year ahead, with some three million more people saying they were considering making the move in the year ahead.

Jim Spowart, chief executive of Intelligent Finance, says: “We championed the cause of current account customers from day one, offering competitive rates and attacking banks for dragging their heels when dissatisfied customers wanted to leave.

“We are delighted to see that account switching is becoming a much simpler and quicker process and millions of consumers are beginning to enjoy the switching dividend.”

Intelligent Finance&#39s analysis of its own account moving found that the average time taken to complete the process of moving customers&#39 accounts has been slashed by a third over the last year, largely due to automation.

The increasing ease of account switching is borne out by wider customer experience. Eight out of 10 customers who moved their current accounts over the last year reported that the process was much easier or easier than they had expected.

Banks are now meeting the majority of requests for customers&#39 standing orders and direct debits within the agreed five working days deadline. The make-up of customers who have or are considering changing banks will also be of particular concern for high street banks.

Younger and more affluent customers are showing the highest propensity to move to take advantage of better deals.

Customers could save over £1bn a year by moving to a more competitive provider. Intelligent Finance includes itself among this number, with a 3.2% AER/Gross on balances from £1.